FG Gives New Conditions for Foreign Companies to Operate in Nigeria
- The CAC has issued a new directive to companies with foreign participation in Nigeria
- Affected companies will now need to have at least N100 million aligns-paid-up capital to operate in Nigeria
- The commission stated that any company that fails to meet up with the new guide will wind up
Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.
The Corporate Affairs Commission (CAC) has directed companies with foreign participation to shore up their paid-up capital to a minimum of N100 million.
Source: UGC
This was announced by the commission on its X page. The body stated that the development was in line with the Revised Handbook on Expatriate Quota Administration (2022).
A 900% increase
The increase represents a 900% rise from the earlier N10 million requirement for foreign companies in Nigeria.
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According to the Commission, any application for incorporation of a company having foreign participation would not be processed unless it complies with the stated requirement.
It also directed existing companies with foreign participation that are yet to meet up with the new development to do so within six months from the notice date.
It stated:
“Commission shall commence proceedings for the compulsory winding-up of the Companies under Section 571 (e) of the Companies and Allied Matters Act 2020.”
The Guardian reports that an integrated law firm, Aluko & Oyebode, however, said since the guidelines in the handbook do not have a retrospective effect, the companies with valid subsisting business permits under the old rules may not be affected by the new rule.
The firm noted that companies registered with the previous minimum share capital but have yet to obtain business permits may need to increase their share capital to align with the new regime.
This comes after the CAC stated that it would remove 100,000 registered companies from its records soon.
CAC speaks on viral message on free company registration, gives deadline
Legit.ng earlier reported that the CAC denied sponsoring social media messages on free business names and company registration.
On its website recently, the commission issued a notice for companies operating in Nigeria, their directors, and officers to submit their annual returns to the body.
It noted that there's been a large-scale non-compliance with this requirement by companies.
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Source: Legit.ng
