|
1. Establish
partners/shareholders and their respective percentage shareholdings in the
proposed company.
2. Establish name, initial
authorised share capital and main objects of the proposed company.
3. EXCEPT in instances
where the proposed company will be 100% owned by non-resident shareholders -
Prepare Joint-Venture Agreement between prospective shareholders. The
Joint-Venture may specify; inter-alia, mode of subscription by parties,
manner of Board Composition, mutually protective quorum for meetings,
specific actions which would necessitate share-holders approval by special
or other resolutions.
4. Prepare Memorandum and
Articles of Association, incorporating the spirit and intents of the
Joint-Venture Agreement.
5. Foreign Shareholder may
grant a power of attorney to its Solicitors in Nigeria , enabling them to
act as its Agents in executing incorporation and other statutory documents
pending the registration with NIPC (i.e. formal legal status for foreign
branch/subsidiary operations).
6. Conduct a search as to
the availability of the proposed company name and, if available, reserve the
name with the CAC.
7. Effect payment of stamp
duties, CAC filing fees and process and conclude registration of the company
as a legal entity.
Stage B
Prepare Deeds of
Sub-Lease/Assignment, as may be appropriate, to reflect firm commitment on
the part of the newly registered company, to acquire business premises for
its proposed operations.
Back To Top
Stage C
1. Prepare and submit
simultaneous applications to the NIPC (on the prescribed NIPC Application
Form) for the following: -
- Registration and Expatriate Quota;
- Pioneer Status and other
incentives (where applicable)
2. The application to the
NIPC should be accompanied with the following documents: -
-
Original and duplicate
Copy of the duly completed NIPC Form;
-
Original Copy of the
treasury receipt for the purchase of NIPC Form;
-
A Copy of the
Certificate of Incorporation of the applicant company;
-
A Copy of the Tax
Clearance Certificate of the applicant company;
-
A 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 as at date of application;
-
A Copy of the
Joint-Venture Agreement -UNLESS 100% foreign ownership is envisaged;
-
A Copy of Feasibility
Report and Project Implementation Programme of a company for its
proposed business. It is advisable that quotations, letters of intent
and other such documentation relating to industrial plant and machinery
to be acquired by the company, be forwarded either as annexes or
separately. In order to discourage the dissipation of administrative
energy on speculative applications, the NIPC favours the applicant who
has demonstrated positive intention to commence business as and when
approvals are granted. Hence, the requests for evidence of acquisition
of business premises and evidence of acquisition of the plant and
machinery to be utilised in the company's business;
-
A Copy of Deed(s) of
Sub-Lease/Agreement evidencing firm commitment to acquire requisite
business premises for the company's operation. By implication, the
ultimate NIPC approvals do incorporate approvals of the industrial site
locations indicated in the application;
-
A Copy of training
programme or personnel policy of the company, incorporating management
succession schedule for qualified Nigerians;
-
Particulars of names,
addresses, nationalities and occupations of the proposed directors of
the company;
-
Job title designations
of expatriate quota positions required, and the academic and working
experience required for the occupants of such positions. It is pertinent
to note that expatriate quota on a “Permanent Until Reviewed” (PUR)
status is only accorded to a Managing Director, where the non-resident
shareholders own a majority of the company's shares, and the authorised
capital of the company is N5 million and above;
-
Copies of information
brochure on foreign shareholder (if available) as testimony of
international expertise and credibility of the foreign partner in the
proposed line of business.
Back to Top
Stage D
1.Having obtained the
requisite NIPC approvals, the non-resident shareholder must act with
despatch to import its foreign equity holding in the company. To ensure
prompt importation of the foreign equity components, the NIPC may register
company but defer approvals for Expatriate Quota and Pioneer Status and
other applicable investment incentives, until evidence of capital
importation is produced.
2. After obtaining
Certificate of Capital Importation from the bank, the NIPC is to be
notified of this fact with the supporting documentation, in order for it
to resume processing of pending approvals that might have been deferred on
such ground.
3. As soon as expatriate
quota position are granted and the respective individuals to fill the
quota positions are recruited, the company must embark on steps to obtain
work permit and residency status for the expatriate employees and their
accompanying spouses and children (if any).
BACK to Top
Meaning of ‘NIPC Registration' and ‘EXPATRIATE QUOTA'
NIPC Registration confers
permanent authorisation for the local operation of businesses with foreign
investments either as branch/subsidiary of a foreign company or otherwise.
Expatriate quota is the
official permit to a company; conveying permission for the 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 employed (whose
qualifications must fulfil the criteria established for the particular quota
position). Expatriate quota positions are usually granted for 2-3 years
subject to renewal, EXCEPT in cases where companies qualify for and are
granted “PUR” Quota (i.e. Permanent Until Reviewed) position.
The
Current Regulation on the Appointment of Foreign Directors
The promoters of business
ventures in Nigeria are free to appoint directors of their choice, either
foreign or Nigerian, and the directors may be resident or non-resident. The
application to the NIPC must reflect the names of the proposed Nigerian and
foreign directors (with an indication of resident and non-resident
directors). The Registration Certificate consequently issued following such
application usually reflects the respective names of the proprietors of the
company, as well as the directors representing each proprietor or
co-proprietor.
Payments of foreign
directors' fees are remittable in the same manner as dividends accruing to
the foreign company. However, since such fees are taxed at source (5% as
withholding tax), each foreign director's fees are remittable subject to
satisfactory evidence that the taxable amounts on such fees have been paid.
Pioneer
Status (Tax Holiday ) Advantages to a Company
The Industrial Development
(Income Tax Relief) Act, Cap. 179 Laws of Nigeria, 1990, declares a number
of industries as pioneer industries. Thus, any company whose products fall
within the categorised industries could be conferred with Pioneer Status.
This designation is not
necessarily a reflection that a company was pioneer per se in the industry,
as several companies within the same pioneer industry classification could
qualify for Pioneer Status. Where the activities of a company include the
production of pioneer and non-pioneer products, the tax relief available on
conferment of Pioneer Status would be restricted to income derived from
pioneer products only. Under the current industrial policy, conferment of
Pioneer Status accords a company relief from income tax liability for a
period of up to 5 years (tax-holiday status).
The criteria for
granting Pioneer Status are related and/or based on the following
considerations: -
(i) the amount of
qualifying capital investment in a company (N5 million and above) must be
verifiable by physical inspection and supported by a report of the
Industrial Inspectorate Division of the Federal Ministry of Industry before
a Pioneer Certificate is granted.
(ii) the socio-economic
advantages of a company's activities to the Nigerian economy as set out in
its Feasibility Study is also an important consideration.
Without prejudice to these
conditions, NIPC is empowered to confer Pioneer Status and other investment
incentives, in any other deserving circumstance as the Council of NIPC may
approve in accordance with the provision of the Nigerian Investment
Promotion Commission Act and the Foreign Exchange (Monitoring and
Miscellaneous Provisions) Act in 1995.
However in the case of
portfolio investment in the capital market, the Securities and Exchange
Commission (SEC) regulates the market. |
