Category: Business

In this post we will be looking at the Meaning and History of Human resource management, Objectives, Importance of HRM for Organizational Success and Skills and responsibilities of an HR manager.

INTRODUCTION

The Human Resource Department, also known as the HR department, is one of the most crucial parts of an organization. Most people think professionals in this department only handle recruitment issues. However, an HR professional has many additional tasks along with recruitment. You might also not be aware that there are different types of human resources job profiles. It is also interesting to know that depending on the types of HRM professionals, the organization endows them with different roles and responsibilities. Some of the profiles are for senior positions and have a higher pay scale. As mentioned previously, the Human Resources department of a company oversees the development and management of the employees working in the company. There are various aspects involved in this, including the hiring process of employees like interviewing, recruiting, and training. The HR department is also closely involved in addressing problem areas in the organisation like fair labour practices, conflict resolution, and workplace diversity. In case there is a conflict between the employer and employees or between two employees, the HR department must intervene in the matter and resolve it amicably.

What Is History of Human Resource Management?

An effective human resources (HR) management department can help provide organizational structure and the ability to meet business needs by managing your business’s most valuable asset – your employees.

Human resource management (HRM or HR) is the strategic and coherent approach to the effective and efficient management of people in a company or organization such that they help their business gain a competitive advantage. It is designed to maximize employee performance in service of an employer’s strategic objectives. Human resource management is primarily concerned with the management of people within organizations, focusing on policies and systems. HR departments are responsible for overseeing employee-benefits design, employee recruitment, training and development, performance appraisal, and reward management, such as managing pay and employee benefits systems. HR also concerns itself with organizational change and industrial relations, or the balancing of organizational practices with requirements arising from collective bargaining and governmental laws.

Objectives of History of Human Resource Management

The objectives of HRM can be broken down into four broad categories:

• Societal objectives: Measures put into place that responds to the ethical and social needs or challenges of the company and its employees. This includes legal issues such as equal opportunity and equal pay for equal work.
• Organizational objectives: Actions taken that help to ensure the efficiency of the organization. This includes providing training, hiring the right number of employees for a given task or maintaining high employee retention rates.
• Functional objectives: Guidelines used to keep HR functioning properly within the organization as a whole. This includes making sure that all of HR’s resources are being allocated to their full potential.
• Personal objectives: Resources used to support the personal goals of each employee. This includes offering the opportunity for education or career development as well as maintaining employee satisfaction.

Within the unit of each organization, the objectives of HRM are to:

• Help the organization achieve its goals by providing and maintaining productive employees.
• Efficiently make use of the skills and abilities of each employee.
• Make sure employees have or receive the proper training.
• Build and maintain a positive employee experience with high satisfaction and quality of life, so that employees can contribute their best efforts to their work.
• Effectively communicate relevant company policies, procedures, rules and regulations to employees.
• Maintaining ethical, legal and socially responsible policies and behaviors in the workplace.
• Effectively manage change to external factors that may affect employees within the organization.

IMPORTANCE OF HRM FOR ORGANIZATIONAL SUCCESS

As mentioned previously, the Human Resources department of a company oversees the development and management of the employees working in the company. There are various aspects involved in this, including the hiring process of employees like interviewing, recruiting, and training. The HR department is also closely involved in addressing problem areas in the organisation like fair labour practices, conflict resolution, and workplace diversity. In case there is a conflict between the employer and employees or between two employees, the HR department must intervene in the matter and resolve it amicably.

Strategy management: This is an important aspect of any organisation and plays a vital role in human resource management. HR managers manage strategies to ensure the organization reaches its business goals, as well as contributing significantly to the corporate decision-making process, which includes assessments for current employees and predictions for future ones based on business demands.

Benefits analysis: HR managers work towards reducing costs, such as with recruitment and retention. HR professionals are trained to conduct efficient negotiations with potential and existing employees, as well as being well-versed with employee benefits that are likely to attract quality candidates and retaining the existing workforce.

Training and development: Since HR managers contribute significantly to training and development programmes, they also play a pivotal role in strengthening employer-employee relationships. This contributes to the growth of employees within the company, hence enhancing employee satisfaction and productivity.

Interactivity within employees: HR managers are responsible for conducting activities, events and celebrations in the organisation which gives way to team building opportunities. Moreover, it enhances interactivity within employees and instils a sense of trust and respect among peers.

Conflict management: The department to go to when any kind of professional conflict arises between employees is HR. They ensure that issues and conflicts are resolved effectively, approaching the problem with an unbiased attitude and encouraging effective communication to reach a solution. In addition, they help employees understand various ways of developing effective work relationships and the importance of not letting personal judgement affect their behaviour.

Establishing a healthy work culture: A healthy work culture is pivotal in bringing out the best in employees. HR managers contribute significantly in setting up a healthy and friendly work culture, which further translates into better productivity among employees.

Compliance: HR professionals work towards making the organisation compliant with employment laws, as well as maintaining records of hiring processes and applicants’ log.

Simple decision making: A company that has the right set of expert HR managers will make corporate decision easier, which includes assessing employees, and projecting the needs for the workforce based on business demand.

Pay/Compensation: Lastly, HRM handles payment of salaries and compensation. They see that there is effective work pay or incentives to the employees.

SKILLS AND RESPONSIBILITIES OF AN HR MANAGER.

HRM can be broken down into subsections, typically by pre-employment and employment phases, with an HR manager assigned to each. Different areas of HRM oversight can include the following:

• Employee recruitment, onboarding and retention
• Talent management and workforce management
• Job role assignment and career development
• Compensation and benefits
• Labor law compliance
• Performance management
• Training and development
• Succession planning
• Employee engagement and recognition
• Team building

Skills that can add value to HR managers include:

• Employee relations
• Job candidate relations
• Sourcing and recruiting
• Interpersonal conflict management
• New employee onboarding
• HR software and information system experience
• Performance management
• Customer service
• Project management

Conclusion

The types of HR roles are varied. If you are thinking of making a career in Human Resources, you can choose from any of the roles mentioned above. However, some of the mentioned job roles demand a good amount of experience in the HR sector. There are many types of human resources roles for freshers as well. You can decide which position will be the most suitable for you, depending on your academic qualifications, strength, work experience, and area of interest.

In this post we will be looking at the meaning of foreign investment, types of foreign investment and procedures, Advantages and Disadvantages of Foreign Investment in Nigeria.

INTRODUCTION.

With Africa being one of the fastest growing continents in the world and Nigeria being a major investment destination for many international businesses, persons and organizations. It is very important that intending investors consult and seek advice from local professionals such as accountants and lawyers, with the latter coming first in hierarchy. This article gives an introduction into the relevant laws and procedures which an investor should consider when intending to do business in Nigeria. Section 20(4) of CAMA provides:

“Subject to the provisions of any enactment regulating the rights and capacity of aliens to participate or undertake in trade or business, an alien or a foreign company may join in forming of a company”.

Also, Section 17 of Nigerian Investment Promotion Commission (NIPC) provides that a non-Nigerian whether company or individual may invest and participate in the operation of any enterprise in Nigeria except those in the negative list. The negative list include: arms and ammunition; narcotic drugs and psychotropic substance; para-military and military wears and accouter. A foreigner may invest in Nigeria by way of Foreign Direct Investment (FDI) which is investments such as ownership of productive assets, such as factories, mines and land or through Foreign Portfolio Investment (FPI), which is the entry of funds into the country where foreigners make purchases in the country’s stock and bond markets.

What Is Foreign Investment?

Foreign investment involves capital flows from one country to another, granting the foreign investors extensive ownership stakes in domestic companies and assets. Foreign investment denotes that foreigners have an active role in management as a part of their investment or an equity stake large enough to enable the foreign investor to influence business strategy. A modern trend leans toward globalization, where multinational firms have investments in a variety of countries. Foreign investment is largely seen as a catalyst for economic growth in the future. Foreign investments can be made by individuals, but are most often endeavors pursued by companies and corporations with substantial assets looking to expand their reach. As globalization increases, more and more companies have branches in countries around the world. For some multinational corporations, opening new manufacturing and production plants in a different country is attractive because of the opportunities for cheaper production and labor costs. Additionally, these large corporations frequently look to do business with those countries where they will pay the least amount of taxes. They may do this by relocating their home office or parts of their business to a country that is a tax haven or has favorable tax laws aimed at attracting foreign investors. Foreign investments can be classified in one of two ways: direct and indirect.

TYPES OF FOREIGN INVESTMENT

Foreign Direct Investment (FDI): When a company, financial institution, or individual invests in foreign countries and owns more than 10% of a company’s stake, it is referred to as a foreign direct investment. It gives the investor controlling power and influence over the companies’ operations and processes. Another way of gaining foreign direct investments is opening plants, factories, and offices in another country. There are two types of foreign direct investment:

• Horizontal Investment: When an investor establishes a similar type of business in a foreign country or when two companies of the same industry (operating in different countries) merge, it is known as horizontal investment. A company pursues this kind of investment to gain market share and become a global leader.
• Vertical Investment: It refers to when a company of one country acquires or merges with a firm in another country, irrespective of their business fields. For example, a manufacturing business of one country acquiring the supplier of raw materials for production of another country. A company indulges in this type of investment to remove the dependency on others and achieve economies of scale.
• Conglomerate direct investment: Conglomerate investment occurs when a company invests or takes over unrelated businesses in other countries. The term “conglomerate” refers to a corporation that comprises several independent businesses. Conglomerate FDI is carried out to diversify business risks, expand into new areas, and reduce total operating costs.

Foreign Indirect Investment: When a company, financial institution, or an individual invests in another country by buying stocks of companies trading in the foreign stock exchange, it is known as foreign indirect investment. However, the said investment should not cross over 10% of the stock in a single company. There are two methods or strategies for this investment:

• Greenfield Investment: – In this strategy, the company starts its business operation in another country from scratch. For example, Domino’s and McDonald’s are US-based companies that started their business in India from zero. Currently, they are leading in their segments.
• Brownfield Investment: – In this strategy, the company does not create its business from scratch. Instead, they choose mergers or acquisitions. Recently, another US-based company, Walmart Inc acquired Flipkart, an Indian company, thus acquiring all its assets and liabilities.

Routes of Foreign Investment

Below are the two routes of foreign investment–

1. Automatic route: In the automatic course, foreign companies/institutions do not require any approval of the government or any agencies for investing in another country.
2. Approval route: – In the approval route, foreign companies/institutions require approval from government or any specified body of the country where they want to invest.

PROCEDURE FOR FOREIGN INVESTMENT IN NIGERIA

Nigerian laws allow and encourage foreign investment in Nigeria by aliens or non-Nigerians.

Section 20(4) of CAMA provides:

“Subject to the provisions of any enactment regulating the rights and capacity of aliens to participate or undertake in trade or business, an alien or a foreign company may join in forming of a company”.

Also, Section 17 of Nigerian Investment Promotion Commission (NIPC) provides that a non-Nigerian whether company or individual may invest and participate in the operation of any enterprise in Nigeria except those in the negative list. The negative list include: arms and ammunition; narcotic drugs and psychotrophic substance; para-military and military wears and accoutre. A foreigner may invest in Nigeria by way of Foreign Direct Investment (FDI) which is investments such as ownership of productive assets, such as factories, mines and land or through Foreign Portfolio Investment (FPI), which is the entry of funds into the country where foreigners make purchases in the country’s stock and bond markets.

There are various laws regulating foreign participation in business in Nigeria, they include:

• Companies and Allied Matters Act (CAMA), Cap. C.20 LFN 2004 – Sections 148 and 155 of CAMA. Section 148 of the Act requires the production of a document which is by law sufficient evidence of probate of a Will or letters of administration of an estate. Section 155, on the other hand, deals with transmission of shares
• Nigerian Investment Promotion Commission (NIPC) Act, Cap NI 17 LFN 2004 – Section 17 of the Nigerian Investment Promotion Commission Act which requires alien to register with the Commission before commencing business in Nigeria.
• Immigration Act Cap I 1 LFN 2004 – Obtaining business permit under Section 8 of the Immigration Act, 1963.
• Investments and Securities Act (ISA) 2009 – Section 8 of the Investments and Securities Act which empowers the Securities and Exchange Commission (SEC) to keep and maintain Foreign Direct Investments (FDI) and Foreign Portfolio Investments (FPI) in Nigeria.
• Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, Cap F.34 LFN 2004.
• Industrial Inspectorate Act Cap. I 8 LFN 2004.
• National Office for Technology Acquisition and Promotion Act, Cap N. 62 LFN 2004.

There are basically three government agencies regulating foreign participation in Nigeria and these are:

•          Nigerian Investment Promotion Commission (NIPC);

•          National Office of Technology Acquisition and Promotion (NOTAP); and

•          Immigration.

It should be noted that this government agencies have respective registration procedures. Documents to be submitted to the relevant government agencies seeking reliefs and approval on behalf of companies include: business permits, expatriate quota and residence permit. On approval, the non-Nigerian is then granted an STR Visa which on arrival in Nigeria will be regularized and then issued a work permit. A wide range of incentives and reliefs have been designed by the government to boost investment opportunities in Nigeria and are offered to foreign investors who qualify for them, they include: pioneer status; duty drawback and suspension scheme; tax relief under the Companies Income Tax (Cit) Act, Cap 60 LFN, 1990.

Advantages of Foreign Investment in Nigeria.

• Employment creation is a significant advantage of foreign investment as it increases manufacturing activities and improves the service sector
• It provides exclusive market access in another nation.
• It enhances a country’s infrastructure and helps develop the backward area by setting up industries or plants.
• It also helps in improving the technologies and operational practices by sharing knowledge.
• When manufacturing is boosted by foreign investment, exports rise.
• An increase in income and job opportunities occurs. Furthermore, an increase in wages enhances a nation’s per capita income.

Disadvantages of Foreign Investment in Nigeria

Disadvantages of foreign investment are as below:

• It poses a risk or causes a hindrance to domestic investments.
• Fluctuation in exchange rates can make foreign investment risky.
• It depends on the political environment, foreign policies and regulations that keep changing in a country.
• The domestic company can lose its control over business and the profit earned.
• The motive of gaining market share through foreign investments may cause domestic and small traders to incur massive losses.

Conclusion

Foreign investment refers to investment from another country. Since it comes from cross-border, more rules and regulations are required. It is beneficial for developing countries because it helps build infrastructure, create employment, share knowledge, and increase purchasing power. At the same time, it is also required in a developed nation for business expansion. In globalization, foreign investment plays a vital role in business expansion. On the other hand, it is harmful to small and domestic businesses because they have insufficient funds to compete against giant corporations.

In this post we will be looking at the meaning of corporate banking, requirements for opening a corporate account in Nigeria, Features and Services of Corporate Banking in Nigeria.

INTRODUCTION

To open and operate a business account in Nigerian banks is an entirely different method from running an individual account in terms of its requirements and documentations. To be able to own a business account, the business must be duly registered in accordance with the Companies and Allied Matters Act (CAMA), which is the principal law that regulates companies in Nigeria. Most banks have different procedures for opening a corporate bank account, but the requirements are still the same across all the banks.  Most of the banks operating in Nigeria provide a wide range of services to their clients with multiple features like ability to transfer funds from Nigeria to other country, trade facilities, debit and credit card, internet banking, and multi-currency account. A business bank account allows one to easily keep track of expenses, manage employees’ salary, convey finances to investors, receive payments, and plan the company’s budget. Corporate banking in Nigeria plays a pivotal role in keeping businesses thrive and has boosted the economic status quo of the country. The Gross Domestic Product (GDP) of Nigeria is largely defined by the impact of businesses (small, medium, or large-scale) on Nigeria’s economy, which stems from savings and investment through corporate banking.

WHAT IS CORPORATE BANKING?

Corporate banking can be defined as the subset of business banking involving a range of banking services exclusively offered to corporate customers. These services may include the provision of credit, cash management facilities, payment processing, credit products, and hedging strategies to large corporations. Most of these corporations are publicly traded.  Corporate banking teams provide financial services like cash management, The term “corporate banking” is often used erroneously by non-finance people when talking about the provisioning of banking services to corporations (broadly); however, there is much more nuance when it comes to banking for businesses.

REQUIREMENTS FOR OPENING A CORPORATE ACCOUNT IN NIGERIA.

• Completed corporate account opening form signed by the company’s designated signatories and the directors of the company.
• Certified true copies of incorporation documents.
• Residential address of the directors.
• Passports photograph of the signatories.
• Bank Verification Number of directors.
• Board Resolution from the Board of Directors authorizing the opening of the account and approving the account signatories.
• Certified Memorandum and Articles of Association (Memart)
• Special Control Unit Against Money Laundering (SCUML) registration where applicable.
• Special requirements such as business permit, residence permit, etc. for foreign nationals.
• Two (2) duly filled reference forms by corporate account holders.
• Legitimate identification document of the directors such as international passport, driver’s license, etc.
• Tax Identification Number (TIN) for the company
• Utility bill of business addresses such as the Power Holding Company of Nigeria (PHCN), water bill, Lagos Waste Management Authority (LAWMA), etc.

FEATURES OF CORPORATE BANKING IN NIGERIA

1. Liability: Under the law, companies are largely recognized, and considered individual/separate legal entities, so the contents of the corporate account are proprietary to the company. This translates to understanding the level of independence to corporate accounts. Also, it is an indicator for the exclusive data privacy right of a company for the content of its corporate account to be protected.
2. Clientele: Commercial banks through its corporate banking services, serves small-to medium-scale businesses and large companies.

• Bankers: Corporate banking is reputed with a high level of experience in the banking industry in Nigeria. Therefore, corporate bankers in large commercial banks in Nigeria like Guaranty Trust Bank (GTB), Access Bank, Zenith Bank, First Bank of Nigeria, United Bank for Africa (UBA), etc are well paid.

• Credit Rating: The credit history of companies in some cases, is made from the conduct or functioning of corporate accounts. This characteristic has effects on the interest rates of a company’s extended loans, valuation, and share prices of the company.

• Authority: In Nigeria, corporate banking accounts can be opened following the consensus approval of the company’s board of directors. What this means is that there must be a corporate resolution between the individuals involved before the company’s treasurer could be able to open a corporate account.

SERVICES OF CORPORATE BANKING IN NIGERIA.

• Commercial Services: Commercial banks provide services in the range of portfolio analysis, leverage analysis, debt, and equity restructuring, analyses of real assets, etc. Also, other services, like underwriters for public offerings (IPO) and asset management services, are important to corporate customers. Corporate banking services are operated by the investment arm of the commercial banks in Nigeria.

• Credit Services: Loans and related credit facilities are offered to corporate customers. The largest share of profits for commercial banks in Nigeria is amassed from these credit facilities. This is because of the significantly high interest rates imposed on the loans due to the prevalent high-end risk in proving loans to corporate customers.
• Fixed Asset with Financing Services: A fixed asset with financing services is of importance to corporate customers involved in capital-intensive businesses or investments like heavy machinery manufacturing, transportation, information technology, etc. Therefore, commercial banks facilitate customized loans and lease agreements for the purchase of heavy equipment, machinery, and other large projects.

• Treasury Services: This is a service used by multinational companies in Nigeria to manage their working capital requirements, such that facilitating their currency conversion.

• Employer Services: Commercial banks, through corporate banking, provide services like the selection of retirement plans and healthcare plans, including payroll facilities for employees.

CONCLUSION

Corporate banking in Nigeria has been the method of keeping businesses afloat in the country, with many incentives exclusively designed for these businesses. Every business needs to take into consideration strengths and weaknesses regarding monetary strategy and business goals before opting for corporate banking services.

In this post we will be looking at the meaning of shares, minimum share capital for foreign companies in Nigeria and Industry-prescribed minimum share capital.

INTRODUCTION

Certain designated businesses have an industry-prescribed minimum share capital requirement in Nigeria. The corporate affairs commission notifies the general public of these requirements. These are also typically published on the websites of the various regulatory agencies in charge of regulating these industries. The recently enacted Companies and Allied Matters Act (“CAMA”) 2020 has introduced several changes in the way companies are regulated in Nigeria. One of such changes is that the entire share capital of companies must be fully issued. Prior to this, in the repealed CAMA 1990 every company could have a prescribed authorised share capital out of which 25% must be issued to shareholders. The minimum authorised share capital for private and public companies was N10,000 and N500,000 respectively in CAMA 1990. The requirement to issue a minimum of 25% of authorised capital allowed companies to retain unissued shares for future allotments. In the CAMA 2020, the requirement for companies to have an ‘authorized share capital’ has been replaced with a ‘minimum issued share capital’ principle. In the CAMA 2020 companies must have a minimum issued share capital of N100,000 for private companies and N2,000,000 for public companies. Section 124 of CAMA 2020 provides that no company shall have a share capital which is less than its minimum issued share capital and requires that every company with unissued shares, must not later than six (6) months from the commencement of CAMA 2020, issue shares up to an amount not below its minimum issued share capital. The Companies Regulations 2021 has provided further clarity by requiring that all companies with unissued shares must fully issue same not later than 30th June 2021. The result of the new minimum issued share capital rule is that companies cannot have unissued shares after the June 2021 deadline. Companies (and their officers) who fail to comply by the deadline will be liable to a daily default penalty as prescribed by the Corporate Affairs Commission (“CAC”). Given the imminent deadline, companies with unissued shares must ensure compliance on or before the end of June 2021. Several options are available for ensuring compliance some of which include: (i) bonus issue or a rights issue to existing shareholders; (ii) issuance of the unissued shares to new shareholders; and (iii) a reduction of the share capital of the company by cancelling all unissued shares (subject to the CAMA 2020 prescribed minimum share capital). The introduction of ‘minimum issued share capital’ has ended the ability of companies to retain unissued shares for future allotments, including the possibility of free float of shares for listed public companies or retention of shares for employee share schemes amongst other purposes. The new rule has created a situation whereby companies may only increase share capital for specific issuance and allotment to new and/or existing shareholders, with all such newly created shares allotted. The era of unissued shares has ended.

WHAT ARE SHARES?

Shares are small pieces of ownership in a business. For some companies, shares are a financial asset that makes it possible for any leftover profits to be split evenly among all the owners. The shares of a company are owned by the shareholders.

MINIMUM SHARE CAPITAL.

Minimum share capital is the minimum amount of assets a company must have. The purpose of this capital is to make sure that if a company goes bankrupt or has trouble with its finances, it has enough equity to pay its creditors. Therefore, various industries have specific minimum share capital requirements that a company must have before incorporating a business or going public.

MINIMUM ISSUED SHARE CAPITAL.

A company’s minimum issued share capital is the smallest amount of shares that a company can sell to investors. Most of the time, the minimum number of shares issued as capital is the same as the least amount a company offers to investors as shares. The major difference between the minimum share capital and the minimum issued share capital is that the former shall be issued in the company’s Memorandum and Articles of Association, while the latter is issued as the least number of shares to the shareholders.

MINIMUM SHARE CAPITAL FOR FOREIGN COMPANIES IN NIGERIA

Foreign companies that seek to do business in Nigeria must register with the Corporate Affairs Commission and other relevant government agencies depending on the sector the company operates in. The minimum share capital requirement of a foreign-owned company in Nigeria is ten million naira (10,000,000).

MINIMUM SHARE CAPITAL FOR COMPANIES IN NIGERIA

The Corporate Affairs Commission provides for a minimum issued share capital of N100,000 for private companies limited by shares and N2,000,000 for public companies limited by shares.

INDUSTRY-PRESCRIBED MINIMUM SHARE CAPITAL

Certain industries have a prescribed minimum shares capital in Nigeria. The Securities and Exchange Commission (SEC), the Central Bank of Nigeria, the Corporate Affairs Commission and other regulatory authorities have listed minimum share capitals for various market operators, some of which are:

Sector            Required Minimum Share Capital

1.        Agents of Foreign Airlines            1 million

2.        Agricultural Seed, Productions, Processing, Marketing      10 million

3.        Air Ambulance/Fumigation/Private Jet            20 million

4.        Air Transport (International)      2 billion

5.        Air Transport (Local)         500 million

6          Air Transport (Regional)   1 billion

7          Asset Management (Intangible Assets)            300 million

8          Aviation (Air Transport Training Institutions) 2 million

9          Aviation (Ground Handling Services)    500 million

10       Brokers/Dealers     300 million

11       Bureau De Change 35 million

12       Cabotage Trade      25 million

13       Capital Trade Point            20 million

14       Closed Pension Fund         500 million

15       Commercial Bank with International Authorization 50 billion

16       Commercial Bank with National Authorization         25 billion

17       Commercial Bank with Regional Authorization         10 billion

18       Commodities Broker         40 million

19       Composite Insurance        18 billion

20       Consultant (Partnership, Individual and Corporate) 2 million, N500,000 and 5 million respectively

21       Corporate Investment Adviser (Registrar)      150 million

22       Corporate Investment Adviser   5 million

23       Corporate/Sub Broker      5 million

24       Finance Company  20 million

25       Freight Forwarding           5 million

26       Fund/Portfolio Manager  150 million

27       General Insurance 10 billion

28       General Micro-Insurance 200 million

29       Individual Investment Adviser    2 million

30       Insurance Broker    5 million

31       Issuing House          200 million

32       Life Insurance          8 billion

33       Life Micro-Insurance         150 million

34       Lottery          5 million

35       Market Maker         2 billion

36       Merchant Bank       15 billion

37       Microfinance Bank (National)     5 billion

38       Microfinance Bank (State & FCT)           1 billion

39       Microfinance Bank Unit (Tier 1) 200 million

40       Microfinance Bank Unit (Tier 2) 50 million

41       National Micro insurer     600 million

42       Non-Interest Bank (National)     10 billion

43       Non- Interest Bank (Regional)    5 Billon

44       Payment Service Bank      5 billion

45       Pension Fund Administrator       1 billion

46       Pension Fund/ Asset Custodian 2 billion

47       Primary Mortgage Institution     2 billion

48       Private Security Company/ Consultant            10 million

49       Rating Agency         150 million

50       Re- Insurance          20 billion

51       Shipping Company/ Agent           25 million

52       Sports Lottery         30 million

53       State Micro insurer            100 million

54       Stock Broker            200 million

55       Stock Dealer 100 million

56       Takaful Insurance (General and Family Takaful)       200 million

57       Travels/Tours          30 million

58       Trustee          300 million

59       Underwriter 200 million

60       Unit Micro insurer 40 million

61       Venture Capital Manager 20 million

In this post we will be looking at list of top companies owned by foreigners in Nigeria and reasons why these foreigners are hired to lead Nigeria’s biggest corporations.

INTRODUCTION.

Since colonial times, foreigners from Europe and the Americas have been living and working in Nigeria. Initially, they were either referred to as colonial masters or missionaries. Fast forward to the 21st century, these foreign workers like to be called expatriates, even as they prefer to live in some of the most exclusive neighborhoods of Lagos, Abuja, and Port Harcourt. As a matter of fact, some of Nigeria’s most exclusive neighborhoods were once predominantly dominated by foreigners who developed and resided in them with their families. A significant number of expatriates in Nigeria today oversee some of the country’s biggest companies. They play such roles as Chief Executive Officers, Chief Operating Officers, Chief Financial Officers, and more. Interestingly, they are not all Europeans and Americans. 

LIST OF TOP COMPANIES OWNED BY FOREIGNERS IN NIGERIA

1. CHEVRON: Chevron Nigeria Limited is a subsidiary of Chevron Corporation and it is one of the largest oil producers in Nigeria. It was previously operating in Nigeria under the business name of Gulf Oil Company until merger activities changed its name to Chevron Nigeria. After another merger by the parent company with Texaco, the Nigerian oil and gas assets of Texaco Overseas Petroleum Company of Nigeria were merged into Chevron. In the shallow and inland waters of Nigeria, the firm operates a joint venture with the Nigerian National Petroleum Corporation.

• AIRTEL: Airtel Networks Limited (Airtel Nigeria) is a leading mobile telecommunications company in Nigeria. According to the Subscribers statistics released by Nigerian Communications Commission (NCC) on 30 August 2019, Airtel Nigeria has 26.8% mobile telephone market share and 46.8 million subscribers. The company is a member of Airtel Africa, the holding firm for Bharti Airtel’s operations in 14 countries in Africa.

• CADBURY: Cadbury Nigeria Plc is a food, sweets and drink company headquartered in Lagos, Nigeria and traded on the Nigerian Stock Exchange. Cadbury Nigeria Plc is a subsidiary of Mondelez International, one of the largest snacking companies in the world. The firm’s flagship product is Bournvita and it competes with brands from Nestle, GlaxoSmithKline and Promasidor.

• EXXONMOBIL: ExxonMobil Nigeria (formerly, Mobil Producing Nigeria) is one of three Nigerian subsidiaries of the petroleum company ExxonMobil. It began operations in 1955. All of its operations are offshore, where it owns 90 platforms on 3,200 square kilometres (1,200 sq mi; 790,000 acres) of territory. MPN is the second largest producer of crude oil in Nigeria after Shell. Erha field/vessel is the recent offshore deployment of ExxonMobil FPSO in Nigeria partnering with Nigerian National Petroleum Corporation.

• GUINNESS: Guinness Nigeria, a subsidiary of Diageo Plc of the United Kingdom, was incorporated in 1962 with the building of a brewery in Ikeja, the heart of Lagos. The brewery was the first Guinness operation outside Ireland and Great Britain. Other breweries have been opened over time: Ogba brewery in 1963 and Benin City brewery in 1973.

• NESTLE: Nestle Nigeria Plc is a publicly listed food and beverage specialty company headquartered in Lagos. It’s mostly owned by a holding company based in Switzerland and have ties to the company Tolaram Group. The company was founded in 1961 and conducted trading under the name of Nestle Products Nigeria Limited. It has its main factory in Agbara Industrial Estate, Ogun State. The firm manufactures breakfast cereal, baby food products, food seasoning and hydrolyzed plant protein mix.

• SAIPEM: Saipem Nigeria is the Nigerian subsidiary company of Saipem, with a huge structure covering all sort of services to the Oil & Gas Industry such as Drilling On/Offshore, construction activities on/offshore (pipelines, power plants, fabrication activities) Engineering, Maintenance. EPIC/EPC Contractor with head offices in Lagos and New operational Base in Port Harcourt (Rumulumeni area). Saipem is under trial in Italy over charges relating to bribery in Nigeria.

• SHELL: Shell Nigeria is the common name for Shell plc’s Nigerian operations carried out through four subsidiaries—primarily Shell Petroleum Development Company of Nigeria Limited (SPDC). Royal Dutch Shell’s joint ventures account for more than 21% of Nigeria’s total petroleum production (629,000 barrels per day (100,000 m3/d) (bpd) in 2009). The company has been controversial in communities in the Niger Delta, who point to its poor environmental record and that most of the economic benefit from oil exploitation has not benefited local communities. In particular, when, in 1993 the Movement for the Survival of the Ogoni People (MOSOP) organized large protests against Shell and the government, it led to repression of the local community. The company has been responsible for some significant oil spills in the Niger delta, and both Nigerian and European courts have held them liable for environmental destruction. One of the most significant cases was at one of Shell’s oil extraction facilities located in the Ejama-Ebubu community.

• PZ CUSSONS: PZ Cussons Nigeria Plc is a publicly listed Nigerian manufacturer and distributor of consumer products such as detergents, toiletries, soaps and home appliances. It is a subsidiary of the British company PZ Cussons Holdings, which owns controlling shares in the firm. PZ trades home appliances products under the brand Haier Thermocool and manages Coolworld electrical stores. It has a joint venture with Wilmar International to produce and trade vegetable oil and palm oil.

1. Unilever: Unilever Nigeria Plc is a publicly listed company with trading and manufacturing interest in the consumer goods market. In 2014, it was listed among the top 20 most valuable companies quoted on the Nigerian Stock Exchange. Unilever Nigeria PLC is a subsidiary of Unilever Overseas Holding B.V.

Reasons why these foreigners are hired to lead Nigeria’s biggest corporations.

There are two main reasons why these foreigners are hired to lead Nigeria’s biggest corporations:

The first reason is the fact that a significant number of Nigeria’s big corporations have foreign entities as majority shareholders. For instance, MTN Nigeria Plc and Nigerian Breweries Plc are both subsidiaries of South Africa’s MTN Group Limited and Amsterdam-based Heineken. In view of this, it is understandable when the owners of such companies bring in their people to better represent their interests.

The second reason is the fact that foreign nationals (especially those from Europe and North America) are often thought to possess better expertise than their Nigerian counterparts. As such, they are treasured, even as they get to earn quite a lot of money in executive compensation.

Across most of the world’s advanced economies, it is very rare to find Nigerians (and Africans at large) leading the biggest companies in such places. The exclusive right is usually reserved for the citizens, mainly because there are usually far too many of them with experience and expertise to lead. The story is a little different across Africa, especially so in Nigeria. Besides South Africa, Egypt and maybe Ethiopia – where a sizable number of some of the biggest companies such as Shoprite Holdings, Naspers, Arab Contractors, and Ethiopian Airlines are led by indigenes – foreign expatriates usually call the shots in some of the biggest companies on the African continent.  

CONCLUTION

It should also be noted that there is a growing number of Africans who are now deemed fit to lead multinationals in Nigeria, depending on their educational and professional pedigree and experience. This is all thanks to globalization, which has exposed many Africans to the same level of educational qualifications/expertise as the Europeans and Americans. not all of Nigeria’s big corporations are headed by foreigners; however, a significant number of them are.

In this post we will be looking at Land tenure system in Nigeria. The meaning of Land Tenure System, types, characteristics, Advantages and disadvantages of Land Tenure System in Nigeria.

INTRODUCTION

Land is essential for every human activity on earth as it is the source of all material wealth. In order to regulate the ownership, use and development of land and land resources, nations the world over have instituted land ownership systems aimed at consistent balancing of the interests of the government, the land-owning class and the landless class. This paper examines land ownership in Nigeria. The paper argues that land ownership structure in Nigeria has evolved over the years until 1978 when a single land policy document, otherwise known as the Land Use Act of 1978 was established to harmonies and regulate land ownership in the country. The paper further contends that the present land ownership system in Nigeria as enshrined in the Land Use Act of 1978 has socialist inclinations with excessive state control of land ownership, use and development. The paper concludes that such land system cannot effectively support private sector-driven enterprises and development initiatives as it creates too much bureaucracy in the documentation of land transactions, land registration and land titling. It recommends an urgent amendment of the nation’s Land Use Act to facilitate access to land with ease for various purposes.

LAND TENURE SYSTEM IN NIGERIA

Land tenure system in Nigeria is an important issue of discussion, search, and review. The basic land law regimes and determinants of relevant rights and obligations with respect to land property. Land tenure in Nigeria is a complex series of relationships between multiple institutions in relation to the uses of land. It also includes institutions that are significant in determining the pattern of land ownership and use. These institutions include the government, customary laws, etc. More so, the history of land administration in Nigeria can be traced back to the 1800s while some statistics show that only a smaller percentage of the nation’s urban residents live in officially designated urban areas. Other people seek ways to own or buy land in their vicinity. You can read about Tenancy Agreement and property development.

WHAT IS LAND TENURE SYSTEM?

The Land Tenure System in Nigeria is the process of granting ownership of land to individuals, legal bodies, corporate bodies, and natural bodies based on their use of these lands. This statutory instrument is used to ensure that human habitats are safe and sustainable.

Land tenure is the relationship, whether legally or customarily defined, among people, as individuals or groups, with respect to land. (For convenience, “land” is used here to include other natural resources such as water and trees.) Land tenure is an institution, i.e., rules invented by societies to regulate behavior. Rules of tenure define how property rights to land are to be allocated within societies. They define how access is granted to rights to use, control, and transfer land, as well as associated responsibilities and restraints. In simple terms, land tenure systems determine who can use what resources for how long, and under what conditions.

TYPES OF LAND TENURE SYSTEM IN NIGERIA.

In order to strengthen property rights and eliminate systemic sources of wealth inequality by changing the classification, distribution, and administration of its land resources, the country came up with types of Land Tenure systems. They are:

1. Freehold Tenure System: Individuals who subscribe to the Freehold tenure system pay a predetermined amount for the right to own a plot of land. Upon obtaining it, you can use it as collateral for a loan. Larger the land, the greater the payment. The land is surveyed and closed by signing backup documents.

• Inheritance Tenure System: In this case, land ownership is transferred to the next of kin. Thus, lands are provided for both born and unborn children. Some villages transfer lands to the children upon their parents’ death.

• Communal Land Tenure system: The community becomes the ruling power of the land under this system. The head of the community determines the sharing ratio. Farming on a large scale is often encouraged, but a single individual cannot claim ownership of the land or even use it as security.

• Leasehold Tenure System: An individual is granted temporary ownership of a plot of land by some form of a title from the owner. During the lease period, an individual may have temporary access to the land, but cannot use it as collateral for loans.

• Gift Tenure System: This type of land ownership is when the landowner gives up his or her land voluntarily and without being coerced by anybody. Since the new owner now owns the full and permanent title to the land, he can use it as collateral for a loan.

• Rent Tenure System: The tenants pay a rent amount to the landlord for a period of time that they use the property. Depending on the agreement and terms, the rent period could be one to two years.

• Tenants at Government Will: According to this system, land is leased by the Nigerian government to farmers for cultivating. The land is mostly used for large-scale farming and crop production. The land is relatively inexpensive to acquire.

CHARACTERISTICS OF LAND TENURE SYSTEM IN NIGERIA.

The things that make up the Land Tenure system in Nigeria include:

• Property right by an individual
• Use of land within a community
• Control of communal piece of land and
• Transfer of allocated piece of land legitimately.

Advantages of land tenure system in Nigeria

1. Land tenure systems are important for supplementing the existing legal framework, which guarantees secure tenure rights to people.
2. It directs to better order and smooth running of communities.
3. It shows as a system for regulating the legal relationship between individuals and communities with respect to land use.
4. It is backed up by “Acts” and these acts provided for all issues at or about lands in Nigeria, its ownership, descriptions, partition use, inheritance, mortgages purchase/ selling transfer, etc.
5. It is a system enabling people to use and manage land and natural resources. It involves two main parties: the government, whose duty is to monitor and regulate the use of land, and private individuals who own and cultivate the land and enjoy its fruits and products.

Disadvantages Of Land Tenure System in Nigeria

It has its root in tradition and culture which may lead to varying views among individuals depending on their religious and cultural orientation.

Conclusion:

Land tenure is a system of laws that determines who is considered to be the owner of land in a given jurisdiction. Nigeria has a federal system of government and land tenure laws are generally made by the various States. This topic often creates attention in the country is the “Land Tenure System”. Therefore, in an attempt to explore further, we have conducted some research on land tenure in Nigeria.

In this post we will looking at land ownership documents in Nigeria, types of land titles in Nigeria, excision of land and land rectification.

INTRODUCTION

There are various land documents in Nigeria affecting the transfer of land ownership and legal interest in a property. A prospective buyer of land must be acquainted with appropriate land documents relevant to the property to be purchased. All documents are not mandatory or relevant to a single property, an appropriate document for any proposed property transaction will be determined by the nature or circumstances of the property to be purchased. The importance of Land Titles cannot be overemphasized. People who have taken it for granted have either lost a lot of money or found themselves embroiled in unnecessary litigation. Before you acquire any property, it is pertinent that you ask, know and verify what title comes with the property. It is always best to investigate before you invest. However, even when you have verified what kind of title comes with your acquired property, you also need to know how that title impacts your property Historically, all lands belong to the indigenous families dwelling on such lands but the Land Use Act, enacted in 1978 vested all urban land within a state in the state governor to hold on behalf of the people, and as such the governor is therefore responsible for allocation of land in all urban areas to individuals resident in the state or to organizations for residential, agricultural, commercial, and other purposes.

LAND OWNERSHIP DOCUMENTS IN NIGERIA

There are various land documents to consider when buying or selling land. The applicable document for such a property sale will be determined by the type of the property’s ownership. These documents will establish the legitimacy of the land ownership claim. Below, I will briefly explain some of the relevant documents for land or property transaction in Nigeria.

Land Purchase Receipt: A land purchase receipt is a normal receipt or document reflecting the receipt of payment for a particular property or land. Usually, vendors issue a receipt to the buyer upon the sale of a property. However, the receipt may be obviated where the clause for receipt is contained in the document transferring the land.

Contract Of Sale of Land: The contract of sale of land is used by parties to agree on some terms before the finalization of the transaction. It is relevant when any property is to be purchased by anyone. It is not a registrable instrument and must be preceded with other document transferring title in the applicable property.

Survey Plan: A survey plan is used to show the location and size of landed property. With the descriptions and coordinates on the survey document, it is easier to check or search from the office of the Surveyor-General whether the land is actually under any government acquisition or not.

Deed Of Assignment: Deed of Assignment or Deed of Conveyance is used in sales transactions to permanently transfer a landed property from the seller (also known as assignor) to the buyer (also refers to as assignee). It may be drafted by the assignor and reviewed by the assignee or vice versa.

Certificate of Occupancy (C of O): C of O is usually issued by the state government, indicating that a person owns a parcel of land or property. It is issued to individuals that have held a piece of land before 1979. State governments also give it to the allottees of the government’s land. An Individual who subsequently takes over land by way of sale does not require a new certificate of occupancy but rather a deed of assignment with the governor’s consent.

Deed Of Mortgage: Deed of mortgage is actually used in mortgage transactions to show that land or property has been transferred from the mortgagor (borrower) to the mortgagee (lender). It is a temporary transfer in the sense that the mortgagor shall be entitled to retrieve this property back from the lender when the total loan amount, together with the accrued interest, has been paid.

Deed of Gift: It is a document that proves that land or property has been gifted from one person (Donor) to another (Donee). A deed of gift can be used to transfer interest in a landed property permanently.

Grant of Probate:  A grant of probate is a document derived after proving the will of a deceased person through inheritance in the probate registry. The document vests all the assets contained in the will into the executors of the estate, who are now recognized legal owners of the property in law. After the owner of any property has become late, all the property’s documents of such person are no longer valid to transfer any interest in the assets left behind by him or her. The Probate will now be the only recognized legal documents to prove the title to such property.

Letter of Administration: The letter of administration also vests the property left behind by a deceased person into the administrators of a specific estate. It is usually granted to the personal representatives of a deceased person where the deceased left no will before death or where the will has become invalid for any reason.

Assent: Assent is a legal document used to vest an interest in a specific estate into the beneficiaries of an estate or any third-party buyer by the executors or the administrators of the estate. It is always accompanied by a copy of a grant of probate or letter of administration.

Judgement Of Court: The judgment of a court is another essential document which may affect or transfer an interest in a specific property from one person to another. In Nigeria, the legal interests in several properties have been transferred from one person to another through the decisions of various courts. When property ownership has been derived through litigation or any property has been subjected to a lawsuit, it is essential to

examine the full decision of the court in respect of such property by obtaining a copy of the judgement.

TYPES OF LAND TITLES IN NIGERIA

Before the Land Use Act enacted in 1978 properties were hitherto owned and controlled by communal authorities who had powers to assign or rent it out to whom they deemed. By enactment of the decree, all lands (mostly in Urban areas) became owned and controlled by State government on behalf of the people. Below, we’ll be highlighting some different land titles available and how they affect ownership.

Free Or Under Acquisition: A free land is that which the government has not indicated any interest in, while a land is said to be under government acquisition if the government has an interest in the area for the purpose of urban development or industrialization projects.

Global Acquisition or Committed Acquisition: The land under government acquisition can either be global acquisition or committed acquisition. The land with committed acquisition means the government has designated that parcel for a specific project as such those parcels of land can never be released to individuals or organizations for development projects. Acquiring lands that are under committed acquisition will eventually lead to the loss of such investments when government moves to take full possession of such a parcel of land. Whereas a land under global acquisition does not have a specific government purpose yet and as such those parcels of land can be later be free or committed as the case maybe.

There are 2 main processes for making a land under global acquisition to be free such as: Excision and Ratification. 

EXCISION OF LAND AND LAND RECTIFICATION.

In land excision, state governments release land to indigenous peoples or settlers following legal protocols and processes. Since the Land Use Act was enacted, land excision has been used as a method for compensating the original landowners. A grantee who excises a piece of land maintains ownership and control of the land within the confines of local laws and regulations. To excise a land means to cut it. This is the process whereby the government releases a parcel of land back to the indigenous owners of such lands for the purpose of developments. When this excised parcel of land is published in government’s official gazette, the land becomes Gazette as title. Excision and Gazette are very good titles for a piece of land; such lands are safe to buy and develop, because a proper title can be processed on the land.

Land Rectification: Land Regularization (also known as Ratification) is carried out when an individual or corporate entity acquires land that belongs to the government. However, not all government lands can be regularized. Any land that will be regularized must not fall within a government committed area and it must confirm to the state’s urban planning regulations. Regularization entails buying the land “properly” from the government. It is an expensive process because after buying the land from the “omonile” (seller) you still have to pay the government for the land again. After regularization, the government releases the land and issues a certificate of occupancy (C of O) to the applicant. In order to avoid buying government land and spending far more money than necessary it is highly recommended that the status of the land is known before purchase. The process of knowing the status of a land is called Charting. Charting is a very important process in land matters and it is carried out by Registered Land Surveyors.

CONCLUTION

Buying real estate in Nigeria is a delicate process that requires the services of an experienced real estate lawyer. The titles of some property documents are so complicated, and a lawyer may be required to conduct due diligence in respect of such property. Furthermore, lawyers are required to prepare and review all the necessary documents. Under Nigerian law, no interest can be transferred in real estate without appropriate documentation.

In this post we will be looking at the Requirements for business setup and How to Start a Profitable Business with Little Capital in Nigeria.

INTRODUCTION.

The major dream of most Entrepreneurs is to someday have their own business. Having your own business is sweet because you can afford to do things when you want it without your boss looking over your shoulder. But as cool as it sounds, starting a profitable business is a very demanding task that only a few businesses survive. Business is work relating to the production, buying, and selling of goods or services. There are no limits to who can become a business owner or an entrepreneur. You do not need a huge sum of money in your bank account or a degree to become run your own business. However, what you need is a good business idea, a concrete execution plan and passion to wake up every morning and keep grinding. The principal law guiding the starting of a business in Nigeria is the Companies and Allied Matters Act (CAMA) Cap C20. There are different types of business entities that can be registered in Nigeria. The choice of business to set up is influenced by various factors such as control, limitation of liability, cost, the complexity of formation, tax implications, purpose, capital and ongoing administration. There are different types of business structures that can be set up in Nigeria; each of these structures has peculiar identities and requirements to suit the purpose of business.

There are two major types of business structures in Nigeria, which are briefly explained below:

A Registered Business: Business name is a name and style in which a person trades. this type of business structure is also popularly called a “Sole Proprietorship” is the simplest form of business one can operate in Nigeria.  It is registered with the Corporate Affairs Commission and It is not a legal entity that can sue or be sued in its own name. The owner of the business is responsible for the debts and liabilities of the business. The advantage of this type of business set up is that the owner of the business bears all the profit and loss of the business.

A private company limited by shares: A private company limited by shares, often referred to as LLC in many jurisdictions is a separate entity different from its members. Unlike the business name, it takes a minimum of two persons to form a private company in Nigeria.  There is corporate governance set in place for running a company such as shareholders, directors, secretary etc. This kind of business set up is a legal entity that can sue and be sued in its own name.

Starting an LLC in Nigeria must be commenced with the due incorporation of the business with the Nigerian company house- Corporate Affairs Commission (CAC). An LLC or private company limited by shares is an ideal type of company for any investor seeking to invest in Nigeria.

Requirements for business setup in Nigeria are as follows:

• Registration of a Company
• Registration with Nigeria Investment and Promotion Commission (NIPC)
• Tax Registrations and Tax Clearance Certificate
• Business Permit
• Expatriate Quota
• Combined Expatriate Residence Permit and Alien Card (CERPAC)
• Bank Account Opening and Capital Importation
• Appointment of Auditors
• Company Secretary
• Office and Property Acquisition

HOW TO START A PROFITABLE BUSINESS WITH LITTLE CAPITAL IN NIGERIA.

the following are key steps and processes of what you need to start a profitable business in Nigeria.

• Evaluate yourself: Since you have made up your mind to start a business, you need to carefully evaluate yourself by asking these questions to yourself.
• Do I have the skills needed to run this business?
• Do I have what it takes to lead or manage a team?
• Do I have what it takes to raise capital for the business?
• Do I have the passion and motivation to make this a success?

So, be very sincere with your answers and if the majority of your answers to the above questions are “YES”, then you are ready to start your own business.

• Find a business idea: When it comes to starting a business, not all business ideas are worth starting at all. The best business ideas are unique, practical, needed by the market and easy to scale. In the search for a business idea, start by looking at what problems exist in your environment and try to provide a solution to such a problem and monetize it.

• Conduct market research: Before starting a business, be sure you have a good understanding of such business. Try conducting market research by asking your potential customers few questions about the problem you will like to solve for them. Also, research on existing direct and indirect competitions that currently exist in the market. Try to know about their products and services and how you think your business can stand out amongst them.

• Feedback: It is one thing to conduct market research when you want to start a business, it’s another thing to properly utilize the feedbacks gotten from your research. The whole essence of this is to help you know more about the business you want to start and helps to form a strong foundation for the business.

• Create a business plan: According to Wikipedia, A business plan is a formal statement of business goals, reasons they are attainable, and plans for reaching them. It may also contain background information about the organization or team attempting to reach those goals. For every business, whether big or small needs a plan for that business. In starting a business, a business plan helps you to stay focused and organized. Remember organizational skill is one of the skills of a successful entrepreneur. Therefore, in writing your business plan, you check out some business plan samples online to serve as a guide.

• Get business funding: Starting a business does not only require your skills and effort but also your money. Every business requires a startup capital which will be used in funding the day-to-day operations of the business. In case you do not have the required capital required to start the business, there are different ways (bank loans, grants, equity investments etc.) to source for funding for a new business. Most businesses die due to lack of funding hence make sure you’ve enough capital that will cater for the financial down times.

• Business Registration: Registration of business is very paramount for everyone that wants to start a business. You should register your business with the government of your country or with the body responsible for business registration in your country. For example, if you are a Nigerian business you can register your business with Cooperate Affairs Commission (CAC) at the federal level and then with Chamber of Commerce at the state level. Registering your business with the required bodies gives validity and authenticity to your business.

• Build Your Team: If you are planning to be the only one running your business, then you may not need to start building a team. But if you are definitely going to employ people, you need to build a strong team. You are building a strong team for your business because these people are meant to contribute to the growth of your business but if the team is not well built, they can as well help to bring down your business.

• Grow Your Business: Growth is vital to the survival of a business. Any business that is not growing will surely die no matter how long it takes. Make sure you do everything possible to ensure the constant growth of your business. The number one metric to measure the growth of a business is a steady positive cash-flow. The more cash-flow a business generates the more ability it has to grow and expand the business. Hence, ensure that you have the right tools to help you keep track of your cash-flow from day one of the business.

In this post we will be looking at the regulatory requirements that must be met before any company or foreigner can legally commence its business in Nigeria.

INTRODUCTION

As the most populous African nation, Nigeria continues to attract an increasing number of foreign investments annually. In 2020, the United Nations reported that Nigeria’s inflow of Foreign Direct investments (FDI) increased by 4.3% despite the outbreak of COVID-19. As the market expands, the government continually issues policies aimed at creating a conducive business environment. Nigeria operates a free-market economy and there are no restrictions on foreigners setting up companies in Nigeria. Subject to the laws of Nigeria, a foreign individual or entity can set up a fully owned company in Nigeria and operate, employ expatriates and repatriate profits. However, before any foreigner can carry on business in Nigeria, it is a mandatory requirement that the entity is duly registered in the country. The Companies and Allied Matters Act 2020 (CAMA) is the principal legislation that governs the registration of companies in Nigeria while the Corporate Affairs Commission (CAC) is the regulatory authority. Apart from the registration of the company, there are other regulatory requirements that must be met before any company can legally commence its business in Nigeria and a foreign investor needs to know this regulatory requirement, costs, timelines for achieving any registration or obtaining a license and the relevant agency responsible for any approval or permit as well as the applicable taxes, levies or other mandatory obligations.

 Registration with CAC

The process involved in the registration of a company in Nigeria are as follows:

1. Availability and Reservation of Proposed Name
2. Application and Registration
3. Approval

Availability and Reservation of Name: The first step is to conduct a name availability search with the CAC. The purpose of this is to ensure that the proposed name of the company is available for use and that there is no other company that has registered the same or similar name. Once the name is available, the CAC would issue a certificate of name reservation, which is usually valid for 60 days, enabling the registration to proceed to the next stage. It is always advisable to propose two names in case the first name is not approved.

Application and Registration:

Following the reservation of the proposed name above, the next step would be to prepare all the necessary documents in support of the application. These includes the memorandum and articles of association of the proposed company. To this end, the promoters of the proposed company are required to provide the following information:

• The type of company to be registered
• Registered address of the company
• The objects or nature of business of the company
• Details of the company secretaries
• Minimum issued share capital. (Please note that there is a minimum issued share capital requirement of N10,000,000 for companies with foreign participation. The minimum issued share capital could be more depending on the sector the company wishes to operate in).
• Particulars of the proposed shareholders.
• Particulars of the proposed directors.

Approval by CAC

Once the above information has been received and completed, they are submitted to the CAC for vetting. Payment of the filing fee is made and stamp duty is charged on the minimum issued share capital at the rate of 0.75%.  If satisfied, the CAC shall issue a certificate of incorporation evidencing that the company is now a legal entity authorized to commence business in Nigeria.

Simultaneously, the Federal Inland Revenue Services (FIRS) would issue a Tax Identification Number (TIN) to the newly registered company. The TIN is a unique identifier that is linked to the company which enables it charge and remit the appropriate taxes to the FIRS.

Business Registration with Nigerian Investment Promotion Commission (NIPC)

Following the successful incorporation of the new entity with the CAC, there is a mandatory requirement for that entity to be registered with the NIPC before the company could legally commence any business in Nigeria. The NIPC has the primary responsibility to encourage, promote and coordinate investment in the Nigerian economy. The NIPC also has the responsibility of granting some incentives like pioneer status to any company which qualifies for such status. The application to the NIPC involves filling the relevant application form, providing details of the shareholders and directors of the company and paying the appropriate official fee. If satisfied, the NIPC would issues a Certificate of Business Registration to the entity.

Business Permit, Expatriate Quota and Work Permit

In addition to the above, a wholly owned foreign company wishing to operate in Nigeria must obtain a business permit from the Nigerian Ministry of Interior and expatriate quotas if it wishes to employ foreigners in the country.  The expatriate quota is the precursor to the application for and issuance of work permit to the foreigner being employed by the company in Nigeria. Once approved, the expatriate is issued a Combined Expatriate Residence Permit and Aliens Card (CERPAC) which allows the employee to reside and work in Nigeria.

Tax Registration

It is important that after incorporation a registered company registers with the Federal Inland Revenue Service (FIRS) and obtains a Tax Identification Number (TIN). The TIN is often required to secure other licenses and operate a bank account. It is also necessary to register with the State Inland Revenue Service located in the state in Nigeria where it wishes to carry on business.

Trademark Protection/Registration

Companies that already have an existing trademark in their home countries are encouraged to register such trademarks in Nigeria to secure their usage by the company. A search must be conducted at the trademark registry to determine if the trademark is already in existence before registration will be approved or rejected. Note that approval for trademark registration will not be granted where the trademark is already registered by another company unless permission or assignment of that trademark has been granted by that company.

Operating a Bank Account

A company will generally require capital to set up its business in Nigeria. Commercial banks in Nigeria are appointed by the Central Bank of Nigeria as authorized dealers for the purpose of importing foreign exchange and guaranteeing repatriation of foreign capital which may have been imported through a Commercial Bank. Commercial banks also play a crucial role in facilitating the importation of goods into the country. Generally, the requirements for operating a bank account vary from one bank to another. Evidence of company registration, identities of a company’s directors, TIN of the company, proof of registered address, are however standard requirements.

Sector-Specific Licensing

The foreigner must enquire about the licenses required to do business in its proposed sector of operation. Some sectors may have special licensing requirements which must be fulfilled by operators. For instance, a foreign company interested in the sale of cosmetics in Nigeria must first obtain a permit from the National Agency for Food and Drug Administration and Control; a company seeking to import and distribute electronics must obtain a certificate from the Standard Organization of Nigeria (SON); also, a company that wishes to

provide logistics services must be licensed by the Nigerian Postal Service (NIPOST).

Advertising

It is worthy of note that a license to operate may not always confer permission to advertise. A foreign company must ensure it obtains the requisite advertising permit before advertising to its consumers.

Certificate of Capital Importation

The company will need to obtain a Certificate of Capital Importation (CCI) from an authorized dealer, usually a local bank to serve as evidence of importation of capital which could be equity, debt, cash or goods into the country. The CCI also

guarantees the unconditional repatriation of capital and profits out of the country.

Other Registrations/licensing Requirements

Depending on the sector of the Nigerian economy where the new company wishes to operate, it may be necessary to obtain registrations and/or licenses from some of the following (non-exhaustive) agencies:

• Central Bank of Nigeria (CBN)
• National Agency for Food and Drug Administration and Control (NAFDAC)
• Nigerian Electricity Regulatory Commission (NERC)
• Nigerian Communications Commission (NCC)
• Nigerian Civil Aviation Authority (NCAA)
• Nigerian Maritime Administration and Safety Agency (NIMASA)

CONCLUSION

It is advisable that a foreigner interested in doing business in Nigeria engages the services of a business lawyer who will offer transactional guidance specifically tailored to the sector which it seeks to operate.