FG gives new conditions for foreign companies to operate in Nigeria

The Corporate Affairs Commission (CAC) has directed companies with foreign participation to shore up their paid-up capital to a minimum of N100 million.

This was announced by the Commission on its X page. It stated that the development is 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.

According to the Commission, any application for incorporation of a company having foreign participation would not be processed unless it complies with the above 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.”

An integrated law firm, Aluko & Oyebode interpreted, in The Guardian, however, reported that 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.

According to him, 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 will remove 100,000 registered companies from its records soon.