The manufacturing industry in Nigeria is moderately regulated compared to western nations. There is no gainsaying, however, that some sectors are more regulated that the others. At the centre of the industry are the Manufacturers Association of Nigeria (“MAN”), the Consumer Protection Council (“CPC”) and the Standard Organisation of Nigeria (“SON”) as industry-wide regulators, in addition to other regulatory agencies whose scope of oversight functions depend on the specific nature of products.
We have reviewed the regulatory frameworks and highlighted below some of the requirements, costs and timelines for incorporation and other post-incorporation registrations and approvals.
1. What are the requirements for incorporating a manufacturing company in Nigeria?
The incorporation of a manufacturing company in Nigeria is done by the Corporate Affairs Commission (“CAC”).
In order to register a manufacturing company with the CAC, the promoters must present the following requirements:
- Two proposed names for the company: these names will be submitted to the CACS for name search, screening and approval. Upon approval, the promoters may thereafter proceed to register the manufacturing company with 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 Addresses, Email address, Phone number, Date of birth, Occupation, a copy of Government-issued means of identification (e.g. Data page of International Passport), and Electronic signatures respectively.
- Objects of the Company: Please confirm that the proposed company is being registered for the sole purpose of engaging in manufacturing and exports business in Nigeria.
2. What are the applicable costs of registering a manufacturing company in Nigeria?
The cost of registration of a company in Nigeria is dependent on the amount of share capital of the proposed company. There is no specified share capital for manufacturing companies under the extant Companies and Allied Matters Act, 2020 (“2020 CAMA”).
However, the minimum share capital for registering a private limited liability company in Nigeria is N100,000 (One Hundred Thousand Naira Only, while the minimum share capital for a public company is N2,000,000 (Two Million Naira Only).
Please note that where a company is proposed to be registered with a foreign shareholder, the minimum share capital required by the 2020 CAMA is N10,000,000 (Ten Million Naira).
For instance, in order to incorporate a manufacturing company with share capital of N10,000,000 (Ten Million Naira), the total payable costs will be about N150,000 (One Hundred and Fifty Thousand Naira). The breakdown of the foregoing sum is as follows:
- N55,000 (Fifty-Five Thousand Naira) is chargeable by the CAC as Incorporation Fee; and
- N75, 000 (Seventy-Five Thousand Naira) is chargeable by the Federal Inland Revenue Service (“FIRS”) as stamp duty on the N10 Million share capital (the formula for calculating this is: 0.75% of 10,000,000);
- N20,000 (Twenty Thousand Naira) is estimated for miscellaneous expenses.
3. What are post-incorporation registrations and approvals does a manufacturing company require to operate in Nigeria?
A manufacturing company in Nigeria will be required to undertake some post-incorporation registrations and approvals with the following regulatory bodies:
Registration with Standard Organisation of Nigeria (“SON”)
A manufacturing company is required to obtain registration approval of the SON before releasing its products, commodities, processes and services to the public.
The mandate of the SON includes designation, establishment, preparation, approval and declaration of Standards relating products, measurements, materials, processes, commodities, structures, processes and services amongst others and their promotion at National, Regional and International levels; certification of products, assistance in the production of quality goods and services; improvement of measurement accuracies and circulation of information relating to standards in commerce and industry in Nigeria.
The procedure for product certification by SON commences with submission of Application Letter which may be approved by the Director General of SON after which there will be official inspection of the product and processes. Thereafter, SON will process the inspection result and then, if application succeeds, SON issues a Certificate of Conformity.
The applicable costs vary in accordance with the class of products in respect of which SON’s certification is required. For more information of the applicable charges of SON, please see SON Charges.
Tax registration with the Federal Inland Revenue Service (“FIRS”)
Registration with the FIRS is mandatory for all registered companies in Nigeria. As a matter of fact, the CAC and the FIRS have synchronized their systems for automatic assignment of Tax Identification Number (“TIN”) to every company at the incorporation stage.
We mentioned above that in order to register a new company, an amount is payable to FIRS as stamp duty using the Remita payment platform and it is at this stage that the necessary information about every company and the promoters is extracted by the FIRS for future use. Hence, the TIN is automatically assigned to the company for easy reference.
Please note that tax registration is free.
The requirements for tax registration with FIRS are as follows:
i. Application Letter on the company’s letterhead paper which contain a valid email, phone number and address of business;
ii. The Certificate and other incorporation documents of the company;
iii. Proof of a current bank account and address of bankers;
iv. Company seal;
v. Date of commencement of business; and
vi. Bank Verification Number of the director or authorized signatory.
Registration with Manufacturers Association of Nigeria (“MAN”)
Every manufacturing company in Nigeria is required to complete a membership registration with MAN, the umbrella body of all manufacturers in Nigeria.
In order to be eligible for registration with MAN, a prospective member of MAN is expected to have a functional or operational manufacturing plant in Nigeria, producing at least one product duly registered with appropriate regulatory body (SON, NAFDAC, etc.) and having a minimum sales turnover of N100 Million.
Also, the following requirements must be provided:
i. Certificate of incorporation and other incorporation documents of the Company;
ii. Copies of duly certified Audited Financial Statements of the Company for the Preceding two (2) years (for old company) or Business Plan (for new companies);
iii. A Cover Letter on the letter head of the applicant company applying to be registered as a member of MAN
iv. Proof of payments of Application Form Fee (N5,000), Registration Fee (N10,000), Annual Subscription, Special Development Levy, Land Use Charge Levy for Members in Lagos only (N20,000), Buy Made-in-Nigeria Products Advert Levy (N10,000), Legal Levy (N10,000) and AGM Levy (N10,000).
After confirmation of the above payments, an inspection visit will be scheduled by MAN delegates. Thereafter, membership of MAN will be confirmed.
4. Can the foreigners repatriate their investment funds and profits out of Nigeria?
There is no restriction policy on the movement of foreign funds out of Nigeria. Foreign investors are guaranteed unconditional and unrestricted repatriation of their capital, investments, and profits in any convertible currency out of Nigeria through any authorized dealer.
However, it is advisable that a Certificate of Capital Importation (“CCI”) can be obtained upon incorporation of the company to enable seamless repatriation of funds, when necessary. The CCI validates the inflow of foreign capital into Nigeria.
A CCI is free of charge (except out-of-pocket expenses, which should not exceed N25,000 (Twenty-Five Thousand Naira) Only.
5. What is the timeline for processing the post-incorporation registrations and licenses for a manufacturing company in Nigeria?
Obtaining licenses for a manufacturing company on an average takes about 4 weeks.
