The Nigerian import and export market is one of the most attractive business section of the country’s trade industry. According to the National Bureau of Statistics, the Nigeria’s total trade stood at N11,722.44 billion of which total exports stood at N6,359.61 billion and total imports amounted to N5,362.83 billion.
Nigeria has a massive potential for export of both raw materials and finished products, given the nation’s richness in mineral resources and agricultural goods, thereby creating a huge opportunity for intending investors to consider this sector as a possible area of investment. On the other hand, a vast majority of the Nigerian population is still import dependent for both commercial and consumable goods and products.
The Federal Government of Nigeria has continued to introduce innovative policies to encourage foreigners to do business in Nigeria, such as allowing full ownership of their business in Nigeria, introducing a seamless company registration process that can be completed remotely by foreigners without leaving their home country, massive tax incentives for startups and much more.
This article will considers the registrations and licences for a company seeking to set up an import or export business in Nigeria.
Is there any mandatory share capital for incorporating an import/export company in Nigeria?
No. There is no specific share capital for an import or export business in Nigeria. So, a company seeking to do an import or export business may be incorporated with the general minimum share capital of N100,000 (One Hundred Thousand Naira). However, where there is a foreigner amongst either the shareholders or directors, it is mandatory that such a business should be incorporated with a N10,000,000 (Ten Million Million) share capital. Please note that there is no cash deposit requirement for setting up an import/export company. The foregoing amount is the required nominal value of the shares of the company.
What are the requirements for incorporating an import and export company in Nigeria?
Below are the requirements for incorporation of an import/export company in Nigeria:
- Two proposed names for the company: these names will be submitted to the Corporate Affair Commission (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 Company: Details of the Shareholders, Director(s) and Company Secretary to include their names, Contact/Home address, Phone Number, Date of birth, Occupation, National Identification Number (NIN) for Nigerians only, and electronic signatures respectively. Please note that for foreigners, an international passport will be sufficient for means of identification.
- Object of Company: The proposed company must be registered as an import or export company.
- Persons of Significant Control (PSC): Every company is required to disclose any person who holds 5% or more shares in the company or who, though not a shareholder or director, but has control over the company.
You can learn more about HOW TO REGISTER COMPANY IN NIGERIA.
Is an import/export company expected to open a corporate bank account before commencement of operation?
Yes. A company seeking to go into import/export business in Nigeria is expected to open a corporate bank account with a reputable bank in Nigeria to act as the Authorized Dealer Bank (ADB), which will be responsible for processing the Form M (a mandatory statutory document that must be completed with the Authorized Dealer at the time of placing orders whether the transaction is valid for foreign exchange or not) and the PAAR (Pre-Arrival Assessment Report) or Clean Report of Inspection (i.e. a document which confirms conformity of the imported goods to the destination country’s set criteria and import guidelines), as well as act as the mediator among the Nigeria Custom Service (NCS), the importer and other bodies where necessary.
A company’s bank account can be opened and activated within 24 to 48 hours if all the requirements are duly submitted. All directors (including foreign directors resident overseas) must obtain and present a bank verification number (BVN) to the bank as part of the requirements for opening a bank account in Nigeria. Please note that foreign directors can register for BVN at the nearest overseas location shown HERE (Overseas Locations for BVN Registration).
Please read more on the link below:
What are the regulatory Frameworks for import/export businesses in Nigeria?
The primary laws for import/export business in Nigeria are contained in the following legislation:
i. Companies and Allied Matters Act (CAMA) 2020
ii. National Agency for Foods and Drugs Administration and Control Act, 2004.
iii. Standard Organization of Nigeria Act, 2015.
iv. Custom and Excise Management Act (CEMA), 2004.
v. Nigeria Export Promotion Council Act, 1987.
vii. Petroleum Industry Act 2021.
There may be some other sector-specific regulations applicable to the import/export business in Nigeria which a company must observe depending on their products and services.
What are the post incorporation requirements and approvals required for an import/export company in Nigeria?
Upon incorporation, the followings are the five (5) post-incorporation requirements and approvals for setting up an import/export business in Nigeria:
1. Registration with the Federal Inland Revenue Service (FIRS)
Every Nigerian company must undertake tax registration. Although a Tax Identification Number (TIN) is assigned to every company upon incorporation by the Corporate Affairs Commission. However, a company is nevertheless required to register with the nearest branch office of 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 National Agency for Food and Drugs Administration and Control (NAFDAC).
All companies engaged in importation of foods and beverages are required to obtain a licence for their operation from the National Agency for Food and Drugs Administration and Control (NAFDAC), which is the agency vested with the responsibility for the regulating foods and drugs related products in Nigeria.
The following are the document required to register an importation company with NAFDAC:
- A formal written application for product registration directed to the Director (Registration and Regulatory Affairs) stating the name of the manufacturer, brand name, and product.
- Fill the prescribed NAFDAC application Form D-REG001.
- Evidence of payment of prescribed fees.
- Certificate of incorporation of the company.
Note that the cost of NAFDAC registration is dependent on the type of product the company seeks to register.
3. Registration with the Standard Organization of Nigeria (SON)
All companies seeking to undertake importation of manufacturing goods are required to get the certificate of standardization from the Standard Organization of Nigeria (SON). Once approved, the import permit is useable to obtain Form M and PAAR (Pre-Arrival Assessment Report). The Form M/PAAR are for initiation of shipping and custom clearance in Nigeria for any given batch of import. Therefore, companies seeking to go into importation of goods/products must apply in the prescribed form accompanied with the necessary documents as provided by the SON Act.
The following are the document required to register an importation company with SON:
i. CAC certificate of incorporation;
ii. Manufacturing Association Certificate for manufacturing organization and related industries;
iii. MANCAP certificate: This stands for Mandatory Conformity Assessment Program Certificate issued by SON. The purpose of this certificate is to ensure that all goods produced in Nigeria meet all Nigeria Industrial Standard (NIS) before entry into the market;
iv. MAN (Manufacturers Association of Nigeria) current subscription;
v. An excel sheet of all items to be imported;
You can learn about the different applicable fees and registration with SON here.
4. Registration with the Department of Petroleum Resources (DPR)
The DPR has the responsibility to regulate the oil and gas industry in Nigeria. A company seeking to import petroleum products must get the operating licence from the DPR.
The following are the documents required to register for petroleum importation business in Nigeria:
- Completed application form
- Incorporation certificate
- Articles and Memorandum of Association
- Current Storage/Sales license from DPR copy
- Bank reference with committed and explicit statements
- Tax Identification Number
- Proof of Payment.
Upon the completion of the above conditions, the company is qualified to import goods and products from other countries to Nigeria.
5. Registration with Nigerian Export Promotion Council (NEPC)
Upon completion of incorporation, an import/export company is required to register with the Nigerian Export Protection Council (NEPC), and obtain the export certificate.
The following are the documents required to register with NEPC:
- Certificate of Incorporation
- Copy of Memorandum and Articles of Incorporation
- Copies of CAC Form 1.1 or status report
- Board resolution to register company with NEPC (Company seal affixed)
It is imperative to note that the import licence or pre-operation registrations must be completed with the various government agencies such as the National Agency for Food and Drugs Administration and Control, Standard Organization of Nigeria, and the Department of Petroleum Resources amongst others before a company seeking to engage in importation is permitted to operate in Nigeria.
On the other hand, a company seeking to undertake exportation business in Nigeria must first register and obtain operating licence from the NEPC.
What is the timeline for registration?
Export certificate may be obtained within 48 hours upon submitting a complete application. However, the timeline for import licence is largely dependent on the mode of operation of the issuing authority, but not exceeding the period of three (3) months.
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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 making the application for an import/export licence.
