Foreign investors or offshore companies can hold 100% equity stake in a Nigerian company. However, a foreign company wishing to set up business operations in Nigeria should take all steps necessary to obtain incorporation of the Nigerian subsidiary as a separate entity in Nigeria for that purpose. Until so incorporated, the foreign company may not carry on business in Nigeria or exercise any of the powers of a registered company. Through a Power of Attorney, our Law Office (Lex Artifex, LLP.) can assist a foreign company in the formation and incorporation of a Nigerian affiliate or subsidiary.
OBTAIN A BUSINESS PERMIT AND EXPATRIATE QUOTA
Lex Artifex, LLP. can assist overseas investors and foreign companies to obtain Business Permit and Expatriate Quota from the Nigerian Investment Promotion Commission (NIPC) and the Nigerian Immigration Service, respectively. Expatriate personnel do not require work permits, but they remain subject to needs quota of their employer company requiring them to obtain residence permits that would allow income remittances abroad.
Business permit is the authorization for the operation of a business with foreign capital either as a parent company or a subsidiary of a foreign company. Expatriate quota is the authorization to a company to employ individual expatriates to specifically approved job designations, and also specifying the permissible duration of such employment. The expatriate quota forms the basis of work permits for expatriate individuals (those qualifications must fulfill the criteria established for the particular quota position).
ACQUIRING A NIGERIAN COMPANY
An alternative to establishing a new or subsidiary company may be to acquire an existing Nigerian company. Merger and Acquisition processes in Nigeria are regulated by the Securities and Exchange Commission (SEC). Investors interested in acquiring a Nigerian company may have to make a formal bid. A bid to acquire a Nigerian Company is subject to approval by SEC and sanctioning by the Federal High Court.
LISTING ON THE NIGERIAN STOCK EXCHANGE (NSE)
Nigeria has a stock market, allowing access to long-term capital. To obtain and maintain an NSE listing, your company will need to meet the prescribed requirements set out in the stock exchange listing rules. This includes company disclosure and reporting requirements.
DOING BUSINESS IN NIGERIA
The Nigerian government welcomes local and foreign direct investment or foreign portfolio investment. Foreign investors are treated the same as local investors under Nigeria's laws.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.