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28

Jul 2014

Guide to Doing Business in Nigeria

Posted by / in Business, Legal, Nigeria / No comments yet

Setting up a company in Nigeria

Any foreigner will do well (and it is advisable) to engage the services of a law firm in Nigeria in order to properly do business in Nigeria. Our firm provides such services to foreigners wishing to do business in Nigeria through our in-house law firm,
or any International Centre for Nigerian Law Legal Practitioners. To request the services of the in-house law firm, please send an email to info@pukkalogistics.com.ng

1.         Incorporate company

1.1       Firstly,  decide on the name of the new company. For a foreign company setting up in Nigeria, it is advisable to chose a name that is the same as the name of the parent company and ending with Nigeria Limited. It is advisable to make an application to CAC for Availability and Reservation of Name.

1.2       Draft Memorandum and Articles of Association. (MeMat)  It is advisable that the objects in the MeMat be as close to that of the parent company as Nigerian law will allow.

1.3       Agree upon a share capital structure for the new company. Non-Nigerians may own 100% (One hundred percent) of a company but it is politically advisable to have some Nigerian participation.

Stamp duty is payable in respect of the share capital and also, the amount paid as filling fees depends on the share capital. It may cost more money but it is advisable to have a respectable share capital.

1.4       Nigerian law provides that at least two persons must sign a MeMat as subscribers. The law also provides that at least twenty five percent (25%) of the share be allotted on incorporation.

2.         The costs

The Fees to be paid to and at CAC for matters under the Act are as specified in Companies and Allied Matters (Fees) Regulations 2003 The Minister of Commerce makes the regulations in exercise of the powers conferred upon the Minister by sections 16, 632, 668, and 692 of the Companies and Allied Matters Act and all other powers enabling the Minister in that behalf. The Minister may change the Regulations as and when he deems fit and the changes will be published in the official gazette

Stamp Duty is payable in respect of the MeMat and the MeMat must be stamped before it is presented to CAC for filling. Stamp Duty is Chargeable by the Federal Inland Revenue Service (FIRS) and is assessed on behalf of the  FIRS by the Federal Commissioner of Stamp Duties according to a scale fixed by the Joint Tax Board.

All the payments are made in the national currency of Nigeria which is the Naira and the symbol is N  (the capital letter N double struck through) It is also denoted in international notation as NGN

3.         The fees paid to Lawyer.

It is normal to formally instruct lawyers to incorporate a company and this is best done in writing. Payments made to Lawyers are made up of Fees and Costs incurred.

3.1       The costs are sums of money  paid to Government or in any other way spend in the course of incorporating the company and includes Filling fees, Fess for Availability and Reservation of Name, procurement of Incorporation Forms,  and costs of engrossment (printing) of the MemMat.

3.2       Fess are paid to Lawyers for their professional services.

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28

Jul 2014

Implications of the UK Bribery Act on Doing Business in Nigeria.

Posted by / in Blog, Business, Legal, Nigeria / No comments yet

The U.K. Bribery Act which came

into force on July 1, 2011 is perhaps the most far-reaching anti-

bribery law in the world with provisions that could redefine global

business practice within a short time. With its near universal juris-

diction, the Act is a significant piece of criminal legislation that

affects all corporate entities that carry on business, however limited,

in the U.K regardless of where they are incorporated and will no

doubt force a re-evaluation of how companies conduct their businesses and partnerships in order to avoid the risk of enforcement action.

The Act is especially noted for its tough provisions, unlimited juris-

diction and has already been described as the toughest anti corrup-

tion legislation in the world. The following features of the Act show

why it is imperative that it forms part of the agenda in boardrooms

across the world.

Agents or “associated per-sons” in this respect, then such a

company will not be liable for the bribe paid or received on its

behalf by its employees, agents or “associated per-sons” even if

it had no prior knowledge. What counts as adequate will depend

on the bribery risks and the na- ture, size and complexity of the

Company.

The Act defines an associated person as one “who performs

services on behalf of a Commercial Organisation”. It thus be-

comes imperative for companies that carry on a business or part

of it in the U.K. to formulate clear anti bribery policies as part

of its internal regulations to be clearly communicated to its

staff.

Corporate Hospitality

Corporate events hosted by companies for their clients or

stakeholders, although widely accepted as a normal component

of business culture may be inter-preted as a bribe and a company

may be liable under the Act where it offers hospitality, gifts

or some financial or other advantage to a foreign public offi-

cial with the intention of influ-encing the official and obtaining

or retaining businesses.

This offence relates only to the person who offers the bribe and

not the foreign public official who may be prosecuted under

Section 2 of the Act.

While the Act does not expressly forbid corporate hospitality, it

also does not draw the definitive line to show when it becomes a

bribe. Promotional expenditure aimed at marketing a corporate

organization, its products and services or to create advantageous relationships is not neces-

The Act is especially noted for its tough provisions, unlimited jurisdiction and has already been described as the toughest anti corrup-

tion legislation in the world. The following features of the Act show

why it is imperative that it forms part of the agenda in boardrooms

across the world:

Extra Territorial

Jurisdiction

The provisions of the Act are extensive, criminalizing not just brib-

ery offences occurring in the U.K or involving U.K companies, its

nationals or public officials but all forms of corporate bribery regard-

less of where the company is incorporated as long as it carries on a

business or part of a business in the U.K.

Under the Act, it is immaterial that the offence of bribery occurred

outside the U.K. or that the subject matter of the bribe had no

connection whatsoever with any U.K operation or activity. It is also

irrelevant that the bribe was not paid to a public official as the Act,

unlike the United States Foreign Corrupt Practices Act (FCPA) and

other anti corruption laws, extends the offence of bribery beyond the

scope of public officials to include bribes paid between private com-

mercial entities. A Nigerian company may therefore be prosecuted

in the U.K for violating the provisions of the Act once it carries on

a business or part of a business in the U.K.

Strict and Vicarious

Liability

What this means is that a company and its Directors will be liable for

bribes paid or received on its behalf by its agents or subsidiaries

whether or not it authorized the payment or had prior knowledge

of it. This is the corporate offence of failing to prevent bribery. The

mitigant here however is if a company can show that it had put in

place “adequate procedures” or internal anti-bribery regulations to

guide the activities of its employees.

 

IMPLICATIONS OF THE U.K. BRIBERY ACT ON DOING BUSINESS IN NIGERIA

Such intention may be determined by examining the nature of the

advantage offered, the manner and form in which the advan-

tage is provided and the level of influence the particular foreign

public official has over awarding business.

Bona fide hospitality and promotional or other business ex-

penditure which seeks to improve the image of a commer-

cial organisation, better to present products and services or

establish cordial relations, is recognised as an integral and

important part of doing busi ness and it does not appear to

be the intention of the Act to criminalise such behaviour. The

UK Government does not intend to use the Act to prohibit

reasonable and proportionate hospitality and promotional or

other similar business expenditure intended for these purposes.

It is, however, clear that hospitality and promotional or other similar business expenditure can and have been employed as bribes.

In order to amount to a bribe under section 6, there must be an intention for a financial or other advantage to influence the

official in his or her official role and thereby secure business or a business advantage. The standards or norms applying in a

particular sector may also be relevant in considering whether the acts carried out by the Company constitutes a bribe.

Facilitation Payments

A facilitation payment is a payment

Identify and appoint a compliance officer. This may be a law firm or a firm of auditors.

Develop an accounting system that can identifies possible infringements and informs employees of what to
do about suspicious transactions.

Introduce standard wording in contracts to confirm third
party compliance.
Ensure that employees are aware of their reporting obligations to the firm and
what actions to take if approached to make or accept a bribe.
Consider systems for due diligence on appointment of
agents/joint venture partners/intermediaries, including relevant termination
clauses.
Ensure continuous anticorruption training for those
who are in a position to make or receive a bribe on
behalf of the company.
Payment made to a public official as an inducement to perform a function which they would or should
normally carry out as part of their job. Regrettably, this has come to
be regarded as an essential part of doing business in Nigeria.
Although facilitation payments have already been abolished in the
U.K, what the Bribery Act does is to extend this abolition to companies outside the U.K who carry on some part of their businesses
within its borders. The guidance to the Act indicates that where company managers make payments to „speed up‟ the perform-
ance of a function or activity to which they are already legally entitled, they and their companies could face prosecution.

Impact on Business

The U.K. Bribery Act will have a significant impact on the activities
of local companies as well as U.K based or U.K connected companies doing business in Nigeria.
Many of the payments abolished under the Act are considered to be a part of regular business practice in Nigeria and companies will
soon face the significant problem of choosing between promoting their businesses and being prosecuted for violating the provisions
of the Act.
A potential consequence of this provisions is that given the worldwide use of facilitation payments, businesses not connected to the
U.K may enjoy a competitive advantage going forward than their U.K. connected counterparts.

What companies may wish to

consider

The following are some of the
internal procedural adjustments
which companies might want to
consider undertaking to avoid
violating the provisions of the Act:
Carry out a risk assessment to identify areas where the com-
pany is vulnerable to bribes.
Develop and codify an extensive internal anti-corruption policy.
Write/review all hospitality and promotional expenses. This
includes charitable donations, political contributions, facilita-
tion payments etc. While the reality of Climate
Change is hardly new in Lagos, as a subject of policy and potential
legislative intervention it represents an entirely novel develop-
ment. Nevertheless, given its likelihood to dominate headlines
into the foreseeable future, shape business activities and rewrite the
terms of environmental sustainability, a widening arc of stake-
holders are compelled to tak note.

Environmental Saturdays

Happily enough, there is still a chance to press the reset button
and ride on the tails of the growing, albeit slowly, Climate Change
awareness. Now in its third edition, Lagos State government has
convened an annual Climate Change summit to drive the train
of the needed intervention required to generate capacity to
reduce the State‟s vulnerability to Climate Change. With trees being
planted rapidly and long forgot ten parks being refurbished; La-
gos is trying to grow a green sheen. To the credit of the State
Government, as at press time, it has a draft policy on Climate
Change Adaptation and Mitigation strategies. Drawing inspira-
tion from both the United Nations Framework Convention on
Climate Change and the Kyoto Protocol, the draft policy docu-
ment is an ambitious wish-list of how the Lagos State government
intends to migrate beyond the monthly state-wide last Saturday
sanitation exercises and radically reorder the face of social infra-
structure and public health In broad terms, it seeks to cut
Greenhouse gas emissions in favour of cleaner alternative
sources of energy and promote sustainability.None of these
would ever be easy in an oil producing country like Nigeria.
Yet some of the challenges being
faced with mainstreaming Climate Change into concrete policy
therefore, the resort to (petrol or diesel powered) generators and
private water supply is indispensable. The resulting conse-
quence of both the topography and demographic situation of
Lagos State means that it is increasingly vulnerable to dis-
ruptions in economic activities and in particular to food sup-
ply, disease, unrelenting pressure on public infrastructure
and services, lapses in social cohesion and order among
many other signs of urban distress. The jaded Lagosian is
grudgingly reconciled to this all too familiar landscape which is
silently conflating into potentially dangerous problems for
the future.

Of the many things which Lagos, Nigeria‟s commercial capital, is
known for, being a green city is sadly not one of them. Lagos is
below sea level and prone to periodic flooding and coastal erosion.
It retains the highest population density in Nigeria and suffers from
years of bizarrely lax urban planning, massive infrastructural defi-
cits, poor waste management, a chaotic transport system and unre-
liable power supply. Yet it remains a destination of choice for many
migrants within Nigeria. As a shoreline state, concerns remain
about the rate of land reclamations and whether their lasting impact
has been thoroughly considered.

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28

Jul 2014

Top 20 Lucrative Business in Nigeria

Posted by / in Blog, Business, Nigeria / No comments yet

Thinking of Investing in Nigeria but don’t know where to start from or which business to invest your money into?

Here are top 20 most lucrative businesses in Nigeria you can invest your money and be sure of making millions back in no time.


1. Poultry Farming - This business is making average Nigerians rich. It is so lucrative that even outsiders are coming in to invest in poultry farming the business in Nigeria. And why not, In a country of more than 150 million people, what would you expect? If you start with 1,000 birds and manage your poultry farm properly, when the turnover on investment begins to come, you will be making up to N30 million annually.

2. Cassava Production - People are beginning to turn their attention to this aspect of farming in Nigeria that have been neglected for years. Cassava derived foods are some of the most consumed in Nigeria. If you can invest in cultivating 50 – 100 Acre in a fertile area like Ondo State, your harvest will be great.

3. Import Used Cloth - Tokunbo market in Nigeria is very big and many people prefer to buy used items that are high quality than buy fakes.The cost of buying and importing used cloths is low compared to the prices in the market here in Nigeria, guarantying good turn over on investment.

4. Sale of Furniture - Buying and selling of Locally make furniture is a goldmine. You don’t need to be a carpenter to do this, just arrange for regular supply from reliable Carpenters while you display and sale in your showroom. It is a very big business in Nigeria as only few can afford the imported designers.

5. Snail Rearing - Snail farming is one of the choice Animal farming for many reasons. It is a low capital investment with high yield and the market is big. There are few people currently doing this – and most of them are doing it in a very low scale. If someone invest heavily in Snail farming, he is sure to make good money in Millions within a year.

6. Rice Farming - Rice remains the most consumed food staple in Nigeria and Billions of dollars goes into importation of this product yearly from China and Thailand because the local farmer are unable to meet up the demand due to poor funding and limited knowledge. Anyone who have a million dollar to invest should get in touch and partner with me with 100% return. $1,000,000 = $2,000,000 guaranteed

7. Making of Fruit Juice - Nigerians drink fruit juice more than any other people. That’s why companies like La Carcella and Chivita who came into the country as nobody are today making billions of naira annually. This business in capital intensive but if you can afford it, it’s well worth it.

8. Pure Water Production - You know how popular this is in Nigeria and how many that are dispensed daily. Though this business is capital intensive but well worth investing into, especially if you can manage it properly with professionalism.

9. Oil and Gas Business - We are blessed and cursed with huge deposit of oil in our land which presents some of the finest business opportunity for Nigerians and Foreigners over the years. Owning a Petrol Filling Station, Supplying of Diesel, and Distribution of Kerosene are some the areas you can invest easily and make good money for yourself.

10. Haulage Services -  The cost of taking a truck from one place to the other in Nigeria is between N20,000 to N200,000 per trip. Due to poor rail transport system, most of the Nigerian goods are transported through the road, making haulage business in Nigeria a viable one.

11. Hotel Business -This is probably the coolest money making opportunity in Nigeria. Invest in small scale hotel of just 10 suites and watch as the money flows in. This has nothing to do with tourism boom of any kind; there is just something in Nigerians system that make this business very lucrative – Nigerians are jolly people!

12. Fast Food Eatery - Eatery business is another goldmine though poor management can kill it death! If you wish to go into this business, be sure to get everything right and don’t forget it’s a bit capital intensive and requires good management skills. But if you get everything right, free money is yours.

13. Importation of Tokunbo Spare Parts - If you are in USA, this business is good for you. Don’t just keep importing exotic cars, gather tokunbo spare parts in containers and ship down here. There is huge market for it in Nigeria.

14. Investing in Property - Property appreciate everyday in Nigeria. Right now, Nigeria is one the countries in the world where landed property is most expensive. If you buy land now anywhere in Lagos, you are sure to make 100% profit within two years. You can buy and quickly resell and make profit. Or you buy keep and sell later.

15. Dry Cleaning - Professional dry cleaners at affordable prices are scarce in Nigeria. What we have are professional Dry Cleaners whose service fees are extremely high or mediocre dry cleaners who can never keep with time. Give them cloths today and meet it unwashed after one week. This business is a money maker if you balance it up.

16. Professional Car Wash - This business is good if you can set it up in a strategic location in a place like Lagos where there are good number of cars. You.

17. Sales of Building Materials - The rate at which new houses are springing up in Nigeria, you get to wonder why many people still complain of housing problem. Investing in building material is a good business and I can count some guys who are making millions almost daily in this business.

18.Transport Business - What we have in this sector are transport companies that are badly managed by local chiefs and touts. Invest in this business with good management and you will be wondering what hits you with bags of money.

19. Nursery and Primary School - School business has no rival among it’s mate. My little kids school fees take away close to a million naira per term just to learn ABC!

20. Investing in Internet Companies - This is a new crop of powerful investment opportunity that is creating Billionaires around the world including Nigeria. It’s simple! You don’t have to be a Tech person, all you need is to look for a creative online startup with good ideas and invest into. Within 1 to 2 years you will be counting your profits in dollars.

*PALNESS is currently opening up investment opportunities to capable individuals who have minimum of N5million to invest with us. The payout is from N500,000 Monthly for 20-21 months. See the table below!

Investment Monthly Payout Duration Total Payout
N5,000,000 N500,000 Twenty Months (20) N10,000,000
N10,000,000 N1,000,000 Twenty Months (20) N20,000,000 
N15,000,000 N1,500,000 Twenty One Months (21) N31,500,000
N20,000,000 N2,000,000 Twenty One Months (21) N42,000,000
N30,000,000 N3,000,000 Twenty One Months (21) N63,000,000
N40,000,000 N4,000,000 Twenty One Months (21) N84,000,000
N50,000,000 N5,000,000 Twenty One Months (21) N105,000,000

Let the experts manage your money while you sleep, wake up, and take your profit. We take all the headache, all the risks, and all the sleepless nights. You take the profit and freedom from worries.

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