On the 6th of April 2014, Nigeria was announced as the largest economy in the African Continent after rebasing the Gross Domestic Product of the Country which was last carried out in the 1990s.The new estimate of Nigeria’s GDP adds previously uncounted industries like telecommunications, information technology, music, airlines, burgeoning online retail outlets and Nollywood film production that didn’t exist when the last GDP count was made in 1990.Nigeria has 100 million cell phone users. According to the Finance Minister; Ngozi Ikonjo-Iweala during a news conference the recalculation makes Nigeria the 26th largest economy in the world and raises its per capita income to $2,688, making it No. 121 in the world, up from No. 135.
Nigeria is Africa’s most populous country with 170 million people. It has been growing as an investment destination owing to the size of its consumer market and growing capital markets.Finance Minister Ngozi Okonjo-Iweala told Reuters last week that billions of dollars of foreign and domestic investment were envisaged for this year, including $1.5 billion in agriculture. It wont be out of place to say that Nigeria is a strategic market for all manner of Foreign Investments.
It is important to state at this juncture that Nigeria is a free enterprise and anyone can do business in Nigeria as long as its not an illegal business contained in the Negative list of the Nigerian Investment Promotion Commission(“NIPC”). A foreigner is free to do business alone or in partnership with another person however he/she must comply with the provisions of Section 54 of the Companies and Allied Matters Act(“CAMA”)
Essentially, Section 54 CAMA provides to the effect that every Foreign Company that wants to carry out business in Nigeria should take all necessary steps to obtain incorporation as a separate entity in Nigeria for that purpose. The law stipulates that until incorporation the foreign company should not carry out business in Nigeria or excersise any of the powers of a registered Company. Where a Foreign Company fails to Comply with the provisions of the Act, any transaction it enters into would be null and void. Thus the law Courts will not enforce the Contract at the instance of any party to the transaction.There are however exceptions to this general rule they include:
1. Foreign Companies invited to Nigeria by or with the approval of the Federal Government to execute only
specified individual projects
2. Foreign companies which are in Nigeria to execute special loan projects on behalf of donor countries
3. Foreign companies which are in Nigeria to execute special loan projects on behalf of donor countries
4. Engineering consultants and technicians engaged on any individual specialist project under contract with any
governments in the Federation or Government Agencies where the contract has been approved by the Federal
Before commencing business, a Nigerian entity with Foreign participation would need to register NIPC.The Commission is esthablished to encourage,promote, co-ordinate,and monitor investments in Nigeria.The entity can then proceed to obtain operational licenses from the relevant regulatory bodies e.g To carry out business in telecommunication,operational license would be gotten from the Nigerian Communication Commission. Business permits, work permits and expartraite quote for foreign employees would also be obtained from relevant agencies.
Foreigners are free to bring in any recognised foreign currency into Nigeria this is however subject to money laundering restrictions.Such funds will have to be brought in through an authorised dealer (usually a bank authorised by the Central Bank of Nigeria(“CBN”). The bank then to issue a certificate of capital importation (“CCI”) to the investor to evidence the inflow of such funds into Nigeria. Where capital is not imported in form of funds but is imported in form of equipment, machinery or raw materials, it will be appropriate to get a CCI.
Thers are different types of business organization that a foreigner can participate in as provided in “CAMA”
a. Limited Liability Company
b. Unlimited Liability Company
c. Company Limited by Guarantee
e. Sole proprietorship
f. Incorporated Trustees
ARTICLE DISCLAIMER: The contents of this Article are intended for general informational purposes only and are not intended for specific application to any particular set of facts and circumstances. This Article is not a substitute for legal counsel on any particular matter