Registration of a Branch or Subsidiary of a foreign Company in Nigeria

Registration of a Branch or Subsidiary of a foreign Company in Nigeria

Non-Nigerians and Foreign
Companies are at liberty, and indeed encouraged to invest and participate in
the operation of any enterprise or company in Nigeria. To invest in Nigeria,
the promoters or investors must register a company in Nigeria. 

A foreign company may
apply in accordance with Section 56 of the Companies and Allied Matters Act
(CAMA) for exemption from incorporating a local subsidiary if such a
foreign company belongs to one of the following categories:-

Foreign companies invited to Nigeria by or
with the approval of the Federal Government of Nigeria to execute any specified
individual project;
Foreign companies which are in Nigeria for
the execution of a specific individual loan project on behalf of a donor country
or international organization;
Foreign government-owned companies engaged
solely in export promotion activities, and;
Engineering consultants and technical
experts engaged on any individual specialist project under contract with any of
the Governments in the Federation or any of their agencies or with any other
body or person, where such contract has been approved by the Federal

A foreign company or
investor may incorporate a Nigerian branch or subsidiary of the parent company
by giving a Power of Attorney to a qualified solicitor in Nigeria for this
purpose. The incorporation documents in this instance would, disclose that the
Solicitor is merely acting as an “agent” of a “principal”
whose name(s) should also appear in the document. The Power of Attorney shall
indicate that the appointed Solicitor shall cease to function upon the
conclusion of all registration formalities. 

The minimum share capital
of a company with foreign investment is N 10 million and where the
foreigner is resident in Nigeria, he shall submit/file a copy of his residence
permit along with other documents required for incorporation of a company.

Sequel to registration of
the Company at the CAC, all companies with foreign investors must register with
Nigerian Investment Promotion Commission (NIPC) and obtain a Business Permit
from the Ministry of Internal Affairs through the NIPC before commencing formal

Section 8(1) (b) of the
Immigration Act provides that no person other than a Nigerian citizen shall on
his own account or in partnership with any other person practice a profession
or establish or take over any trade or business whatsoever or register or take
over any company with limited liability for any such purpose without the
written consent of the Minister of Internal Affairs. A Business Permit is the
operational licence granted to an expatriate or foreign company to enable him
carry on business activities in Nigeria.

Registration with the NIPC
and application for Business Permit is processed by completing the NIPC
application form accompanied with the following documents: –

Original copy of the treasury receipt for
the purchase of NIPC Form.

A copy of the Certificate of Incorporation.

A copy of the Tax Clearance Certificate of
the applicant company.

A copy of Certificate of Capital

Certified True Copies of CAC Form 02 &
07 i.e. Particulars of Shareholders and Directors.

Certified True Copy of the Memorandum and
Articles of Association;

A copy of treasury receipt as evidence of
payment of stamp duties on the authorised share capital of the company

A copy of the Joint-Venture Agreement
between the Nigerian Partners and Foreigners

A Copy of Feasibility Report and Project
Implementation Programme. (Business Plan)

10.A copy of Deed of Sub-Lease/Agreement
evidencing firm commitment to acquire requisite business premises for the
company’s operation;

11.  Profile of Foreign Investor as testimony of
international expertise and credibility of the foreign partner in the proposed line
of business.

If the foreign company
intends to employ expatriates, an application shall be made to the Ministry of
Internal Affairs to obtain Expatriate Quota. The Expatriate Quota is the
official approval granted to a company to enable it employ individual
expatriates to specifically designated jobs and the quota must state its
duration. Section 8(1) (a) of the Immigration Act provides that “no person
other than a citizen of Nigeria shall accept employment, not being employment
with the Federal or a State Government, without the approval of the Chief
Federal Immigration Officer.  

There are two types of
expatriate quotas which are:

  • Permanent until Reviewed (PUR) – This
    is meant for positions that would be occupied on a permanent basis and is
    usually granted to the Chairman of the Board of a company or the Managing
    Director. As the name implies, it is permanent until there is a
    supervening circumstance, which will necessitate its review. The essence
    of granting the PUR is to ensure that the foreign company is able to
    protect its investment. Once a PUR is granted, a certificate is issued
    stating the position that the PUR covers.

  • Temporary Quota – This is usually
    granted to the directors or other employees of the company. These
    positions are specifically stated on the permit and the expatriate
    employee’s qualification must be in par with the designation.
Please note that the quota
is issued to the company and not the expatriate, as such when the expatriate
leaves the company, the position reverts to the company and the company may
place another expatriate on the same position for as long as the quota position
remains valid.

To apply for Expatriate
Quota Position, in addition to the documents submitted for the application for
Business Permit, the following additional documents and information are needed:

Evidence of non-availability of expertise
in the country;

2.  A copy of training programme or personnel
policy of the company, incorporating management succession schedule for
qualified Nigerians;

3.  Particulars of names, addresses,
nationalities and occupations of the proposed directors of the company;

4.  Job title designations of expatriate quota
positions required, and the academic and working experience required for the
occupants of such positions.

Once the expatriate quota
is obtained, the Company shall apply to the Nigerian embassy or consular office
for a subject to regularisation for residence work permit (STR) Visa in
writing, confirming that there is a vacancy on the expatriate quota and stating
the position in which prospective employee is to be employed and confirming
acceptance of immigration responsibility.   

STR visa is normally given
for 90 days without reference, during which an application must be made to the
Comptroller-General of Immigration, to regularise the stay of the prospective
employee, and the person may assume his employment only when such application
is approved and a RESIDENCE WORK PERMIT granted.  
Shares: What does it mean in a Company? By Teingo Inko-Tariah

Shares: What does it mean in a Company? By Teingo Inko-Tariah

Profit making ventures are usually registered as
companies limited by shares or unlimited companies. A company is limited by
shares when the liability of shareholders of the company is limited to the
amount, if any, unpaid on the shares held by them. In the case of unlimited
companies, the liability of the shareholders is not limited to any unpaid
amount for shares held by them. Thus
the shareholders of an unlimited company are fully liable for the debts of the
company no matter the amount involved. There are various ways a company can
raise capital for its operations. Issuing shares is one of the ways capital can
be raised.
is a share?

A share is a unit of a company
that defines the interest of a shareholder in the company measured by a sum of
money. It represents a portion of a company’s share capital and confers certain
rights and liabilities on the shareholder. The Nigerian Companies and Allied
Matters Act defines shares as’ interests in a company’s share capital of a
member who is entitled to a share in the capital or income of the company’.
Thus a share represents a unit of a bundle of rights and liabilities which a
member or shareholder has in a company as provided in the term of issue i.e.
the articles of association of the company. A share is a chose in action
(intangible property which gives the owner a right of action for possession)
and it is a transferable property subject to any restrictions that may be
provided in the articles of association or under the law.
and liabilities attached to shares
A shareholder is entitled to vote
in the proceedings of company meetings, receive dividend whenever dividend is
declared, attend meetings and contribute to the affairs of the company, inspect
company’s statutory books, protect proprietary interest in the management of
the company. The Nigerian Companies and Allied Matters Act, 2004 prohibits
issuance of shares with no right to vote or a right to more than one vote
except in the case of preference shares. It is an offence under the law to
issue a share with no vote or more than one vote. On the other hand, a
shareholder is liable to pay for shares held and unpaid for upon winding up of
the company where the company is limited by shares. In the case of unlimited
company, the shareholder is liable for the full debt of the company. A
shareholder is also liable to forfeit shares upon failure to honour a call to
pay up in respect of any unpaid shares and suffer any penalties stipulated in
the articles of association or term of issue.
to acquire shares in a company
Shares in a company can be
acquired by any of the following ways: subscription, allotment, transfer or
transmission. Subscription refers to the signing of the memorandum and articles
of association during the incorporation of the company whereby at least one
share is taken up by each member or shareholder signing for a company to be
formed. Upon registration of the company, the subscribers are deemed to have
agreed to become members of the company and their names must be in the register
of members.

Allotment is the allocation of a
specific number of shares in a company to an applicant or prospective
shareholder upon an application for such shares. The company may allot all or
part of the shares applied for by a prospective shareholder. A prospective
shareholder can also withdraw his application by written notice to the company
any time before allotment is done. Upon application, the company shall, where
it wholly or partly accepts the application, allot shares to the applicant and
notify the applicant of the allotment and the number of shares allotted within
forty-two days. The company is not bound to allot the full amount of shares
applied for but it is bound to write a letter of regret enclosing the balance of
money paid for shares not allotted. Where shares have been allotted, the
company is required to file a return on allotment of shares with the Corporate
Affairs Commission within one month of allotment in the prescribed form and
with the necessary supporting documents. If you have ever applied to buy shares
of a public companies through public offer, this is what happens at the close
of the public offer.

Shares of a company can also be
acquired by transfer. Transfer of shares is the process of passing ownership
from one person to another. It is executed by the delivery of a proper
instrument of transfer and the share certificate to the company and the
subsequent registration of the transferee in the company’s register of members.
A company is required to file a notice with the Corporate Affairs commission
indicating transfer of shares. Transfer of shares in a company are subject to
any restrictions by law or the articles of association. Every private company
is required by law to restrict the transferability of its shares in its
articles of association. This is done by including a ‘pre-emptive right’ clause
to the effect that any shareholder who wishes to transfer his shares should
first offer such shares to existing shareholders before any other person who is
not a shareholder.

Transmission of shares is the process
of acquisition whereby a person becomes entitled to the shares of another in
consequence of death or bankruptcy of that other person who was the original
shareholder. In the case of death, the shares could either be transmitted by a
will or where there is no will, letter of administration of estate of the
deceased original shareholder. A person who takes up shares of another by
transmission would be required to communicate same to the directors of the
company showing evidence of such transmission and could either choose to have
the transmitted shares registered in his own name or in the name of a nominated
person. Registration of the name of the person to whom shares have been
transmitted in the register of members after all requisite formalities, grants
such a person full rights as a member of the company.

Classes of shares
There are various classes of shares that could be issued by a
company. These are ordinary shares, preference shares, deferred shares and
founders’ shares. The nature of the shares would depend on the kind of rights
attached to them.Ordinary shares are the
basic shares of a company which have no special rights attached and which bear
the main risk. They are sometimes referred to as ‘equity shares’. Majority
of the shares in most companies are ordinary shares which have the basic rights
attached to a share.
Preference shares are those shares that have
additional rights attached to them and they could take various
forms.  Fixed preference shares entitle
the holder to a fixed amount of dividend every year. Fixed right to participate
in surplus profit entitles the holder of such shares to additional dividend
after the fixed amount of dividend. Thus where there is surplus, they benefit
further with the ordinary shareholders.
Cumulative preference shares entitle the
holder to dividend every year whether or not profits are declared by the
company. Where no profit is declared in a particular year, the dividend
accumulates and adds up to that of the following year such that whenever there
is profit and dividend is declared, this class of shareholders get their
dividend that has accumulated over time in addition to what is currently due
In the case of Non-cumulative preference
, where a dividend is not declared and paid in a
particular year, such dividend is lost. 
Deferred shares are shares on which no dividend
is payable until other classes of shares have received a minimum dividend.
Preference shares could be stated as non-voting (holders would not be entitled
to attend meetings or vote) and could also be expressed to be redeemable as a
term of issue. The right of redemption would usually be set out in the articles
of association of the company.
Redeemable share is
one issued on the terms that the company will or may buy them back at a future
date. Founders’ shares and Management shares are shares
with special rights attached for the benefit of the original subscribers and
management of the company respectively in order to retain some measure of
control over the company. They are not popular in Nigerian corporate practice.

Ed’s Note: Culled from 
Photo Credit – 



Credits –
people who have incorporated companies in Nigeria sometimes don’t know the
steps to take after incorporation. Many do not know if they are required to
file returns or even how to go about their tax registrations and payments. Via
this blog, I will be sharing post incorporation obligations for company owners
as it relates to the Corporate Affairs Commission (CAC) and on subsequent posts
share tax obligations for every new and existing company registered under the
Companies and Allied Matters Act.
note that these post incorporation obligations are in line with the provisions
of Companies and Allied Matters Act (CAMA).

Every company must keep a
register of its members as provided for under Section 83 (1) – (5) and Section
84 (1) – (4).
Every company having more
than 50 members must keep an index of its members except the register is in
such a form as to constitute an index. Section 85 CAMA.


Section 97 states that all
public companies shall keep a register of interest in shares.
Every public company shall
within a period of 6 months from the date of its incorporation hold a general
meeting of the members of the company as stated in Section 211 CAMA.
Every company shall in
each year hold a general meeting as its annual general meeting in addition to
any other meetings held in that year and shall specify such in the notice
calling it as stated in Section 213 (1) CAMA. It should be noted that not more
than 15 months must elapse between one general meeting and the next.
Every company shall cause
minutes of all proceedings of meetings as provided for under Section 241(1) –
(4) to be entered in books for that purpose. 
Credit –
By virtue of the
provisions of Section 246(2) CAMA, any company whose number of directors falls
below two, shall within one month of its so falling appoint new directors and
it shall not carry on business after the expiration of one month, unless such
new directors are appointed.
The company directors must
have their first meeting not later than 6 months after incorporation as stated
in Section 263 CAMA. 
Every company shall keep
at its registered office, register of its directors and secretaries by virtue
of Section 292(1)CAMA. 
10. Every company must have a
company secretary as stated in Section 293(1). 
11. Every company shall, at least once in every
year make and deliver to the commission an annual return in the form containing
the matters specified in Sections 371, 372 or 373 of the Act as may be
applicable. Provided that accompany need not make a return under the Section
either in the year of its incorporation or if not required by Section 213 of
the Act or hold an annual general meeting during the following year, in that


12.  Any change in the
registered Head Office address of the company must be given to the commission
within fourteen days of such a change as provided for under Section 547(2)
13.   Every company after
incorporation shall paint or affix its name and registration number on the
outside of every office which it carries on business. Section 548(1) CAMA.
14. Every banking company or insurance company or
benefit society shall before it commences business and also in the first Monday
in February and first Tuesday in August in every year during which it carries
on business submit to the commission a statement in the form, in schedule 14 to
the Act. 
aforementioned obligations are however not exhaustive, as the CAC issues
various regulations from time to time. However, it is important that every
company appoints a company secretary whose duty will be to ensure compliance
with the CAC rules and regulations.
Onibokun Esq,




Every Company shall have a gateman
Secretary, so says the HR Manager law in Section 293 of The Companies and Allied Matters
Act, CAP. C20, Laws of the Federation of Nigeria. By secretary, I do not mean a
receptionist or a customer care practitioner; neither do I mean a person who
just assists with correspondences or making appointments nor that stern looking
woman who sits in front of the Executive- Director’s office and acts like she’s
the gate-keeper to the Promised Land. By Secretary, I mean a corporate officer
in charge of the official correspondences of the company, minutes of board
meetings, and records of stock ownership and transfer. 

 A company secretary is appointed
and can be removed by the Directors of a company, and like the Directors of a
company, the secretary plays a very important role in the company’s daily
administration. The part played by the Company Secretary is further strengthened
by the Corporate Affairs Commission (CAC) directive that all companies appoint a
Company Secretary and file evidence of same before the commission.

CAMA, in Section 298 provides that
the functions of a Company Secretary includes;
a. Attend
the meeting of the company, the board of directors and its committees,
rendering all necessary secretarial services in respect of the meeting and
advising on compliance by the meetings with the applicable rules and
b.  Maintaining
the registers and other records required to be maintained by the company under
this Act;
c.  Rendering
proper returns and giving notification to the commission required this Act; and
d. Carrying
out such administrative and other secretarial duties as directed by the
director, or the company.  
It is the duty of the Company
Secretary to maintain certain statutory registers on behalf of the company
  • Register of members and shareholders.

  • Index of members where they are more than 50.
  •  Register of Debenture Holders 
  • Register of Directors/ Secretaries.
  •  Accounting records
  • Register of charges, and  
  • Register of interest in shares.

Furthermore, a secretary shall
not owe fiduciary duties (duty to act with good faith) to the company except where
he is acting as its agent, then he shall owe fiduciary duties to it, and as
such shall be liable to the company where he makes secret profits or lets his
duties conflict with his personal interests, or uses confidential information
he obtained from the company for his own benefit (Section 297).  

To be a Company  Secretary, such person must have the requisite
knowledge and experience to discharge the functions of a secretary, and in the
case of a public company, he shall be either a member of the Institute of
Chartered Secretaries and Administrators; or a legal practitioner; or a member
of the Institute of Chartered Accountants; any person who has held the office
of company secretary for a period of 3 years; or a corporate body or firm
consisting of the above mentioned people (Section 295).
Adedunmade Onibokun Esq.