If you are wondering whether a foreigner can register a company in Nigeria, the answer is yes. In accordance with the provision of section 18(1) of the Companies and Allied Matters Act, 2020 (“CAMA”), any two or more persons may form and incorporate a company in Nigeria.
Also, Section 20(4) of CAMA provides that a foreigner or aliens (including a foreign company) may join in the formation of a company in Nigeria.
The foregoing sections imply that both Nigerians and foreigners are allowed to register a company in Nigeria provided that he or she meets the following conditions:
- He is not less than 18 years of age;
- He is not of unsound mind;
- He is not an undischarged bankrupt; or
- He is not disqualified under Nigerian law from being a director of a company.
Please note that there are certain businesses that are restricted and which foreigners may not be allowed to operate. These are referred to Negative List businesses which are stipulated under section 31 of the Nigerian Investment Promotion Commission (“NIPC”) Act, and they include:
(a) production of arms, ammunition, etc.;
(b) production of and dealing in narcotic drugs and psychotropic substances;
(c) production of military and para-military wears and accoutrement, including those of the Police and the Customs, Immigration and Prison Services; and
(d) such other items as the Federal Executive Council (“FEC”) may from time to time determine.
It is instructive to note that a company involving a foreigner is deemed to be a large company which means such company must have a Nigerian director and or company secretary. Section 395 (4) of the CAMA provides that the parameters for determining a small Company are as follows:
In the case of a company having share capital, the directors between themselves hold at least 51% of its equity share capital.
It is a private company;
Its turnover is not more than N120,000,000 or such amount as may be fixed by the Corporate Affairs Commission (“Commission”) from time to time;
Its net assets value is not more than N60,000,000 or such amount as may be fixed by the Commission;
None of its members is an alien (foreigner);
None of its members is a government, government corporation or agency or its nominee;
Section 271(1) of CAMA provides that any company not being a small company shall have, at least, two (2) directors. Also, Section 330 (1) of CAMA provides that “Except in the case of a small company, every company shall have a secretary.”
The foregoing sections make it a mandatory requirement for companies other than a small company to appoint a minimum of two directors.
A combined reading of sections 395(4) and 271(1) of CAMA 2020 implies that companies with foreign membership must be incorporated with a minimum number of two directors with at least a Nigerian director.
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KORIAT & CO. is a commercial law firm in Lagos Nigeria with versed experience in business establishment, regulatory compliance and dispute resolution.
Please contact us via admin@koriatlaw.com or +2349067842241 if you have any question or require any assistance on any aspects of the above article.
The above article is for information only and not to serve as legal advice to readers.
