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CAN A FOREIGN COMPANY DO BUSINESS IN NIGERIA WITHOUT INCORPORATION?

Generally , for a foreign company to carry on business in Nigeria, such foreign company is required to incorporate a separate entity for that purpose in Nigeria, and except a foreign company incorporates a separate entity in that regard such foreign company shall not carry on business in Nigeria or exercise any of the powers of a registered company.

In fact foreign companies without a separate entity incorporated in Nigeria are prevented from having a place of business or an address for service of documents or processes in Nigeria for any purpose other than the receipt of notices and other documents preliminary to incorporation[1].  In EdicomaInt’ Inc v C.I.E Ltd[2] the Court held that a foreign company not registered in Nigeria cannot carry on business in Nigeria without incorporation.

However, despite the requirement of incorporation, it is pertinent to note that under certain circumstances a foreign company that falls within certain categories can be exempted from the requirement of being incorporated as condition to carry on business in Nigeria. Thus, by the combined provisions of Section 78(3) and Section 80 of the Companies and Allied Matters Act, 2019 the following foreign companies may be exempted from the requirement of incorporation having followed the laid down procedures to wit:

  1. Foreign company granted exemption under the previous Companies Act;
  2. Foreign company  exempted under any treaty to which Nigeria is a party;
  3. Foreign company exempted by the Minister in charge of Trade upon compliance with Section 80(1),(2) and (3) of CAMA, 2019.

Before the Minister can exempt a foreign company such foreign company must fall within the following categories to wit:

  1. Foreign companies invited to Nigeria by or with the approval of the Federal Government to execute any specified individual project;
  2. Foreign companies which are in Nigeria for the execution of specific individual loan projects on behalf of a donor country or international organization;
  3. Foreign government-owned companies engaged solely  in export promotion activities; and
  4. 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 Government.

Where a foreign company falls under any of the above stated categories, for such to carry on business in Nigeria without being incorporated in Nigeria, it must apply in writing to the Minister in charge of trade to be exempted setting out the following facts in the said application:

  1. The name and place of business of the foreign company outside Nigeria;
  2. The name and place of business or the proposed name and place of business of the foreign company in Nigeria;
  3. The name and address of each director, partner or other principal officer of the foreign company;
  4. A certified copy of the charter, statutes, or memorandum and articles of association of the company, or other instrument  constituting or defining the constitution of the company and if the instrument is not written in the English language, a certified translation thereof;
  5. The names  and addresses of one or more persons resident in Nigeria authorized to accept, on behalf of the foreign company, service of processes and any notice required to be served on the company;
  6. The business or proposed business in Nigeria of the foreign company and the duration of such business;
  7. Particulars of any project previously carried out by the company as an exempted foreign company; and
  8. Such other particulars as may be required by the Minister or Secretary to the Government of the Federation.

Having satisfied these requirements and other conditions considered necessary in any circumstance, the Minister will grant the exemption and specify the period or the project or series of projects for which the exemption is granted which shall lapse at the end of such period or upon the completion of such project or series of projects[3]. The Minister shall publish in the Federal Government Gazette the name of the foreign company to which exemption from incorporation has been granted and the period or the project(s) for which exemption is granted[4]. Upon such exemption the foreign company shall give notice of such exemption to CAC within 3o days of grant of such an exemption[5]

Conclusion

It is therefore clear based on the above that though foreign companies are generally required to incorporate a separate entity in Nigeria before such foreign company can carry on business in Nigeria, in certain cases as stipulated in Sections 78(3) and Section 80 of CAMA 2019, where a foreign company is exempted, such can carry on business in Nigeria without being incorporated.


[1] See Section 78 (1) and (2) of the Companies and Allied Matters Act, 2019.

[2] [2007] Al FWLR (Pt. 357) 990 at 1001 paras A-C (CA).                                                                    

[3]See Section 80(4).

[4]See Section 80(6)(a)

[5]See Section 80(7). It is important to note that failure to give such notice to the Corporate Affairs Commission (‘CAC’) within the prescribed period attracts penalty to be determined by the CAC.

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