Various business regulatory agencies regulate the activities of companies in Nigeria. While some of the agencies apply to all businesses regardless of the sector, the nature of the business, others are specific to a particular sector. This write-up will give a brief overview of the regulatory agencies and identify whether such agency applies to all business or a particular sector.
The agencies and their functions concerning businesses in Nigeria will be briefly discussed below.
- The Corporate Affairs Commission (CAC)
This is usually the first and foremost agency every proposed business must interact with before engaging in business in Nigeria. It is established by the Companies and Allied Matters Act (CAMA) charged with the responsibility of incorporation of companies in Nigeria. Thus, before an individual or an entity can operate in Nigeria, it must be duly registered with the CAC where it discloses the details of its owners, nature of the business, address of the said business, details of directors and secretaries, share capital, details of persons with significant interest etc. depending on the form of business being registered. In light of CAMA 2020, the forms of business entities in Nigeria include Company (private & public), Limited Liability Partnership, Limited Partnership and Business Name.
In ensuring that businesses are operative, the agency requires the filing of annual returns to monitoring the affairs of the company as well as notifications of board resolutions that may lead to a change of management of the entity. This is all in a bid to determine the affairs of the company as it is.
CAMA 2020 has given concessions to enable ease of doing business and these include single membership, the optional appointment of company secretaries and auditors for small companies, virtual general meetings among others.
- The National Investment Promotion Commission (NIPC)
Interaction with this agency is only required where the business has foreign participation in its ownership. It is established by the National Investment Promotion Commission (NIPC) Act charged with the responsibility of regulating foreign investments in Nigeria. Registration with the NIPC is paramount for companies having foreign participation before commencing business. The documents majorly required for this are documents obtained upon incorporation with the CAC. Registration with the NIPC also entitles such foreign investor to several incentives such as being able to remit all proceeds in the event of a sale or liquidation, prevention from being nationalized by the government, alternative means of dispute resolution etc.
- Federal Inland Revenue Service (FIRS)
Every business except those who are exempt from taxation such as incorporated trustees must remit the tax to the above agency. It is established by the Federal Inland Revenue Service (Establishment) Act, 2007 and is charged with the responsibility of assessing persons and entities chargeable with tax and the ensuring the remittance of such to a designated account. It is pertinent and has been made mandatory to acquire a Tax Identification Number (TIN) by the Finance Act, 2020. In carrying out certain activities or seeking to obtain licenses, a Tax Clearance Certificate (TCC) which bears the TIN is required. Such activities include obtaining a Money Lenders License, Department of Petroleum Resources Permit, Certificate of Residence to enforce a double taxation Tax Treaty, Opening a bank account etc.
Although the activities of this agency apply to all businesses subject to taxation, not all the taxes are required to be paid by every entity, some are sector-specific.
National Office of Technology Acquisition and Promotion (NOTAP)
This agency regulates the transfer of certain foreign technology into Nigeria and the proceeds obtained from the use of such within Nigeria. It is established by the National Office of Technology Acquisition and Promotion Act (NOTAPA) which requires every contract involving the transfer of technology with Nigerian Partners to be registered with NOTAP within 60 days of its execution. Thus, where the transfer of technology involves the use of trademarks, the right to use patented inventions among others, it must be registered with NOTAP.
Nigeria Social Insurance Trust Fund Management Board
This board is charged by the Employee Compensation Act 2010 with the responsibility to oversee the payment of compensation to employees to have suffered a workplace injury. The employer is required to make certain contributions to the Compensation Fund which are borne only by him and not the employee.
Nigerian Immigration Service (NIS) & Federal Ministry of Interiors
This agency is responsible for regulating the entry and exit of persons from Nigeria. In carrying this out, it issues travel documents, residence permits to foreigners, carries out border surveillance and patrol, issues passports to locals and visas to foreigners. Concerning businesses, certain permits such as a Visa, and the Combined Expatriate Residence and Aliens Card (CERPAC) are required to be obtained from the Nigerian Immigration Service to gain entry into Nigeria and stay for a certain period.
Other documents required and obtained from the Minister of Interiors are the Business Permit which is required to commence and register a business by foreigners as well as an Expatriate Quota where the business intends to appoint foreigners into its ranks.
- The National Agency for Food and Drug Administration and Control (NAFDAC)
It is established by The National Agency for Food and Drug Administration and Control Act. This agency regulates production, distribution, importation and exportation of food, drugs, water, detergents etc all referred to as regulated products. The failure to obtain a NAFDAC approval or registration before distributing any drugs or processed food or food materials may lead to a complete seizure of such products by the government. Thus, any person intending to participate in the any of the above must seek and obtain approval from NAFDAC which permits an individual or entity to manufacture certain foods or drugs for sale otherwise they will be deemed illegal.
- Department of Petroleum Resource Permit
It is a department under the Ministry of Petroleum Resources that regulates the dealings of companies in petroleum. There are various classes or types of DPR licenses. Under the Oil and Gas Industry Service Permit (OGISP) class, there are three categories of licenses, which include the general, major and specialized license depending on the activity of that business. For instance, if it involves consultation services, then the major license is issued upon submitting incorporation documents, details of equipment, tax clearance certificate, registration with the Nigeria Social Insurance Trust Fund, details of subscribers and expertise of those involved etc.
Central Bank of Nigeria (CBN)
This is established by the Central Bank of Nigeria Act 2007 and it serves as the primary body responsible for regulating financial services and financial institutions in Nigeria. It makes regulations from time to time regulating the activities of financial institutions such as minimum share capital, the requirements for obtaining licenses, issuing legal tender etc. It also requires a foreign business intending to import capital to obtain a Certificate of Capital Importation from an authorized dealer i.e. a bank. The CBN reserves the right to withdraw licenses already granted where the entity does not comply with its Regulations or lacks sufficient assets to meet its liabilities etc.
Federal Competition and Consumer Protection Commission (FCCPC)
This is established by the Federal Competition and Consumer Protection Act (FCCPA) 2019 with the mandate to regulate competition in Nigerian Markets, combat adverse market practices and protect and promote the interests and welfare of consumers by providing access to a wider variety of quality products at competitive prices. It can seal up premises suspected to harbour fake or substandard products and publish a list of goods banned or restricted.
Securities and Exchange Commission (SEC)
This is established by the Investment and Securities Act with the primary responsibility of regulating the capital market. It carries out registration of market operators such as issuing houses, brokers, debt instruments, debentures, brokers. It conducts inquires and audits of any participant in the capital market and enforces sanctions for any violation of its rules.
- Standard Organization of Nigeria (SON)
Established by the Standard Organization of Nigeria Act, this agency determines the standard and quality of every product must attain. It can therefore certify a product having attained such standard for production and importation. The agency may seize, confiscate, and prohibit the sale of any products for failing to meet the required standard. Essentially, it ensures the standardization and quality of products in Nigeria to protect the consumer of such products.
In conclusion, the above list of regulatory agencies is not exhaustive, however, they are the main agencies regulating business operations in Nigeria.
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.