This brief write-up is on incorporation of a Limited Liability Company as the Investment vehicle into the Nigerian Economy and compliance with other Regulatory Laws and processing and obtaining Statutory approvals necessary for the conduct of the new Company’s propose business activities.


GENERAL COMMENT: – The Nigerian Investment Law recognizes a Nigerian Incorporated Company as the main vehicle for private foreign investment and enterprise activities. There are basically two types of Companies in this category, Private Limited Liability and Public Limited Liability Company.


An Investor’s investment and liability in these Companies are mainly denoted in and limited by Shares and to a lesser extent; Loan Equity.  A 100% foreign ownership of such Company is permissible under the current dispensation.


In the above regard the Companies and Allied Matter Act CAP C20, Laws of the Federation of Nigeria, 2004 is the main legislation regulating the formation, management and operation of Companies in Nigeria.


The other most relevant legislations for the purpose of commencing business activities after incorporation for a Nigerian Company with foreign Shareholding includes: –


(a)      The Immigration Act, CAP 11, Laws of the Federation of                  Nigeria, 2004.


(b)      Nigerian Investment Promotion Commission Act, CAP N117, Laws of  the Federation of Nigeria, 2004.


(c)      Foreign Exchange (monitoring & miscellaneous provisions) Act, CAP F.34, Laws of the Federation of Nigeria, 2004.


These legislations regulate the procedure for application and the grant of Business Permit to Foreign Investors, the grant of Expatriate quota and work permits for its foreign employees and the procedure for importation of

capital and repatriation of dividends. All these legislations especially the last two has now liberalized the hitherto rigid and unfriendly investment regime existing before now.



In addition to the establishment of a Limited Liability Company in Nigeria the following steps must be put in place before commencement of operation of the Company:


(1)      Application for a Business Permit and Expatriate Quota positions.


(2)       Pre-operational Tax Clearance and VAT Registration.


(3)      Importation of capital and the obtaining of a Certificate of Capital          Importation from an authorized bank.


(4)       Immigration formalities for expatriate employees.


The following describes in brief the above tasks.




For compliance purpose, Nigerian Company Law requires that a private limited liability Company must have a minimum authorized share of =N=10,000 (=N=500,000 for a Public Limited liability Company) of which 25% must be allotted to the subscribers.

In practice however, for a Company that intends to have foreign shareholders, the minimum authorized share capital for the grant of a Business Permit is  =N=10 million while paid up share capital is expected at the minimum to be =N=5 Million.


The Private Limited Liability Company must have at least two Directors and two Shareholders who may be individuals or corporate entities. Ordinarily it is not necessary for the Directors to be Nigerian citizens, but special regime is in place in respect of certain Companies which activities are regulated by other Legislation, one of them is the sale and manufacturing of Pharmaceutical products.



Where a Company is incorporated with foreign shareholders, it will need to complete registration with the Nigerian Investment Promotion Commission (NIPC) before it commences business.


The company’s Memorandum and Articles of Association must contain the key objects or purpose for which the company is being established.





After incorporation, a pre-operational tax clearance certificate will be obtained for the company. The company will be registered with the Federal Inland Revenue Service for corporate tax and VAT purposes after which the pre-operational tax clearance certificate is obtained and a VAT certificate of registration is issued. The pre-operational tax clearance certificate and VAT certificate of registration will be used to process the Company’s Business Permit.




A Nigerian company with foreign ownership must apply for and obtain a Business Permit before its shares can be validly allotted to and held by non-Nigerian shareholders. The Business Permit normally reflects the names of the non-Nigerian shareholders and Directors.


The Company must also obtain expatriate quota before it can employ non-Nigerians.


The Nigerian investment Promotion Commission [NIPC] and the Federal Ministry of Internal Affairs presently process applications and issue Business Permits and Expatriate Quota positions to new companies.


Usual information required for the processing of Business Permit / Expatriate Quota positions include;


i         Feasibility report and project implementation programme.


ii        Training programme and personal policy of the company incorporating management succession for qualified Nigerians.

iii       Job title designations of expatriate quota positions required and academic and working experience required for occupants of such positions.


iv       Three copies of an information brochure on the main foreign parent company.


For the purposes of processing and obtaining a Business Permit and expatriate quota position, the following information are needed :


#        The exact number and particular designations/titles [e.g. Managing Director etc.] of the expatriate quota positions required.


#        A copy of a profile or brochure on the parent company.


#        Feasibility report, if any.




The paid up share capital of the non-Nigerian shareholder is expected to be funded by way of foreign capital. The capital must be brought into the country through an Authorized Bank. For this purpose an account needs to be opened by the Promoters for the company with a Nigerian bank. It is advisable that both a domiciliary account and a Local currency account be opened, as the Authorized Bank usually requires this.


At the time of the remittance of the funds to the account, the company is expected to officially notify the Bank in question that the funds are to be used as capital contribution to the Nigerian company and will request that the Bank issue a certificate of Capital Importation in respect of the funds. A mandate letter from the foreign shareholder is also sent to the Bank authorizing Company’s agent to follow up and obtain the certificate on the company’s behalf.


The Certificate of Capital Importation allows the Nigerian entity to remit dividends and the capital investment upon divestment by the foreign shareholders. It is the evidence of the capital invested by the foreign shareholder. The Naira value of the foreign capital imported is reflected on the Certificate of Capital Importation.


There is no time limit imposed by law for the remittance of the capital into the country but until this is done the foreign shareholder will not be regarded as having invested funds in the company and a Business Permit may not be issues by the NIPC/Ministry of Internal Affairs.



In respect of Expatriates who are new to the country, after the Expatriate quota position has been obtained and the respective Expatriate individuals to fill the vacant positions have been identified, the Company must regularize their immigration status.


ACME Law Partners are available to provide Clients and interested prospective Investors with comprehensive, prompt and tailored to fit legal services in all the above regard. For more information, please contact;



Gbenga Odusola Esq.


ACME Law Partners.












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