With the ever-increasing commercial activities between Nigeria and other nations, leading to the ingress and egress of persons, goods and services from the country, there is a need for more intentional investment in the maritime sector by the government and private sectors alike. Undoubtedly, an effective maritime transport system plays a vital role in the development of a country’s economy.
Nigeria’s total annual freight cost is estimated to be about $6 billions annually. Therefore, there is an opportunity for a massive return on investment currently in the Nigerian maritime sector as the volume of international trade over the years has tremendously increased.
The Nigerian maritime sector is regulated by the Nigerian Maritime Administration and Safety Agency (NIMASA). Any individual who seeks to set up a shipping company in Nigeria must first register the business with the Corporate Affairs Commission as provided by the Companies and Allied Matters Act (CAMA) 2020 as a company limited by shares.
This article highlights, in a question and answer format, the requirements, cost, and procedures that a potential investor in the maritime sector in Nigeria will undertake in order to incorporate a shipping company and the post-incorporations registrations and approvals the shipping must get before commencing operations in Nigeria.
Is there any mandatory share capital for a shipping company in Nigeria?
Yes. Generally, the minimum share capital for private limited liability companies in Nigeria is N100,000.00 (Hundred Thousand Naira), while that of public limited liability companies is N2,000,000.00 (Two Million Naira) share capital. However, the minimum share capital of a shipping company in Nigeria is N25,000,000.00 (Twenty-Five Million Naira).
Please note that for a shipping company to enjoy the national carrier status that its share capital must be N100,000,000.00 (Hundred Million) and above.
What are the requirements for incorporating a shipping company in Nigeria?
Below are the requirements for incorporation of a shipping company in Nigeria:
- Two proposed names for the company: these names will be submitted to the CAC for name search, screening and approval. Upon approval, the promoters may thereafter proceed to register the company with the approved name.
- Proposed registered address, email address and phone number of the company.
- Details of the Shareholders, Director(s) and Company Secretary to include their names, Contact/Home address, Email address, Phone number, Date of birth, Occupation, National Identification Number (NIN), and electronic signatures respectively. Please note that for foreigners, an international passport will be sufficient for means of identification.
- Object of the Company: The proposed company must be registered as a shipping company.
You can learn more about the requirements for registering a company in Nigeria here
What is the Regulatory Framework for a shipping company in Nigeria?
The principal body of substantive shipping laws is contained in the following legislations:
i. Merchant Shipping Act 2007 (The MSA);
ii. The Nigerian Maritime Administration and Safety Agency Act 2007 (The NIMASA Act);
iii. The Admiralty Jurisdiction Act 2004;
iv. The Nigerian Port Authority Act 2004;
v. The Coastal and Inland Shipping (Cabotage) Act No. 5, 2003 (The Cabotage Act);
vi. The Finance Act 2021.
There are other regulations applicable on the safety of ships, navigation, pollution and crew matters which a shipping company must observe.
What are the post-incorporation registrations and approvals required for a shipping business in Nigeria?
Upon incorporation, the followings are the four (4) post-incorporation registrations and approvals for setting up and operating a shipping company in Nigeria:
1. Registration with the Federal Inland Revenue Service (FIRS)
Although a Tax Identification Number (TIN) is assigned to a company upon incorporation by the Corporate Affairs Commission. Nevertheless, a company is required to register with the Federal Inland Revenue Service (FIRS) for tax purposes.
The following are the requirements for the registration with the FIRS:
- Application letter on the company’s letterhead paper;
- The company’s certificate of incorporation and other incorporation documents;
- Particulars of the company directors, and
- Utility bill of the registered address of the company.
2. Registration with the Nigerian Maritime Administration and Safety Agency (NIMASA)
All shipping companies are required to obtain a license for their operation from the Nigerian Maritime Administration and Safety Agency (NIMASA) which is responsible for regulation of the Nigerian shipping, maritime labour and coastal waters. The agency also undertakes inspections and provides search and rescue services around the Nigerian coastal waters. A company seeking to operate a shipping company in Nigeria must apply to NIMASA in the prescribed form accompanied with the necessary documents as provided by the NIMASA Act.
The following are the documents required to register a shipping company with NIMASA?
- Completed NIMASA form B1;
- Receipt of payment of registration fees;
- Memorandum and Article of Association showing that the company has been registered with N25,000,000 share capital (Note: the main object clause must be shipping related);
- Certificate of increase in share capital, this is relevant if your company had increased its share capital post-incorporation displaying allotment of shares;
- Documents displaying allotment of shares or post-incorporation changes in the records of the company;
- Documents displaying particulars of directors or any post-incorporation filings;
- Evidence that the company had filed for annual returns (this could be in form CAC 10 or a letter acknowledging filing of Annual Returns from Corporate Affairs Commission);
- Current tax clearance certificate;
- Original bank reference letter; and
- Audited account or financial statement of account (the applicant company will need a financial statement where it is less than 18 months old and audited account if your company is over 18 months old).
Please note that a physical inspection of your company will be carried out by NIMASA.
The procedure for filing application to NIMASA is as follows:
- The shipping company or its authorized agent will submit the application to the General Manager of the Port Authority;
- The Applicant will receive a debit note and make a payment of 300,000.00 (Three Hundred Thousand Naira)
- Upon the confirmation of the payment, the Nigerian Port Authority will issue a receipt to the applicant
- The Nigerian Port Authority issues the original copy of the certificate of registration to the applicant.
The license for registration will be issued within 2 to 4 weeks from the date of registration provided that all the required documents are submitted and found satisfactory.
Moreso, it is worthy of note that a shipping company must be registered under the national carrier status in order to enjoy preferential rights and privileges accorded by the Nigerian Government.
3. Registration with the Nigeria Port Authority (NPA)
The following are the documents required to register a shipping company with the port authority:
- Completed NIMASA form B1;
- Current tax clearance certificate of company;
- Certified true copy of certificate of Incorporation;
- Certified true copy of memorandum and article of association of which the share capital must not be less than N25,000,000.00 (twenty-five million naira), and the object of the company must be shipping;
- Latest audit report;
- Evidence that company has filed its annual returns;
- Evidence of registration as a licensed custom agent;
- Joint venture agreement where applicable;
- Charter party agreement where applicable;
- Copy of current list of each owned vessel;
- A reference from the bank;
4. Registration of Ship/Vessel
The following documents are required for the registration of ship with NIMASA:
- A completed NIMASA application form;
- A completed NIMASA approval of name of ship form;
- Copy of Certificate of Incorporation;
- Evidence of registration as a shipping company with NIMASA;
- CTC of Memorandum and Article of Association;
- Company’s current tax clearance certificate;
- Company’s bank statement or reference letter;
- A declaration of NIMASA ownership form to be issued by the Ship Registry; and
- The applicant is to make an application for survey and issuance of Certificate of Tonnage measurement to facilitate the flag survey of the ship.
The applicant is also expected to provide details of his particulars when registering a ship.
These details should include the following:
- Full names, address and occupational operation of the applicant
- Evidence of ability to operate and maintain a ship
- The logbook of the ship will also be provided for inspection by the Registrar of Ships
- Evidence of sufficient financial resources for the operation and maintenance of the ship.
Furthermore, the following particulars of the ship must be provided for registration:
- The name of ship, time, place of purchase and Master of the ship;
- Particulars in respect of tonnage, build and description of the ship;
- Bill of sale or Builders Certificate, that is the evidence of title;
- Certificate of the approval plan issued by NIMASA for a newly built vessel in Nigeria alone;
- Callsign certificate ;
- Load line certificate;
- Condition survey report and tonnage measurement certificate as approved by the Minister;
- Certificate of carving and marking note of the ship. The ship for registration must be marked permanently and conspicuously to the satisfaction of the minister. Inspections will be carried out on ship markings at the cost to the ship’s owner
- Payment of registration fee
- Evidence of insurance coverage of the ship
How can a shipping company enjoy national carrier status?
In order for a shipping company to enjoy the national carrier status, the company must meet the following requirements:
- The company must be registered in Nigeria;
- The managing director of the company must be a Nigerian;
- It must be a fully owned Nigerian company or with Nigerian equity ownership of at least 60% of the shares;
- The company’s vessel must be registered with Nigerian vessel of ships
- It must own at least one ocean-going vessel of not less than 5000 net registered tonnages
- The terms and conditions of the seafarers engaged in the company must be in tandem with Nigerian laws and accepted international standards.
What are the required documents to file in support of the application to register as a national carrier?
The following are the requisite documents to file in support of an application to register a shipping company as a national carrier:
- Completed NIMASA form B1;
- Current tax clearance certificate of company;
- Certified true copy of certificate of Incorporation;
- Certified true copy of memorandum and article of association of which the share capital must not be less than N100,000,000.00 (one hundred million naira), and the object of the company must be shipping;
- Latest audit report;
- Evidence that company has filed its annual returns;
- Evidence of registration as a licensed custom agent;
- Copy of current list of each owned vessel
- A reference from the bank
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About KORIAT & CO.
We are a commercial law firm in Nigeria with network of lawyers and consultants in Ghana, Kenya and Rwanda. The above article is not legal advice and does not automatically make our readers our clients unless they specifically instruct us to act or represent them in any way.
We assist local and foreign clients to process company registration and business licences in Nigeria, Ghana, Kenya and Rwanda.
Please contact Koriat & Co. through admin@koriatlaw.com or 09067842241 if you require additional information about or assistance in setting up a shipping company in Nigeria.
