Guide to Doing Business in Nigeria
Posted by Beulah Akingbelu / in Business, Legal, Nigeria /
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 firstname.lastname@example.org
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.