How To Obtain A Business License In Nigeria – Foreign-owned companies that decide to start and operate businesses in Nigeria either as an individually owned company or a subsidiary of a foreign company need to obtain a business permit and business licenses where applicable. In this article, we discussed how to get a business license in Nigeria.
How To Obtain A Business License In Nigeria
Nigeria Investment Promotion Commission (NIPC), is the authorized body delegated with the power in law to give the Business Permit and also to register companies with foreign investors and foreign participation. All applications to NIPC, for a business permit, must be supported by the following document:
- Duly completed NIPC from 1;
- Memorandum of association;
- Articles of association;
- Current Tax Clearance Certificate;
- Certificate of Incorporation;
- Receipt received on purchase of NIPC Form 1;
- Project implementation program;
- Certificate of capital importation; if available;
- Evidence of acquisition of business/factory premises;
- Evidence of acquisition of operating equipment and machinery(if any);
- Feasibility study report ( applicable to joint venture companies);
- Permit to operate in the oil industry (for oil service companies); and
- Letter of an award of contract (applicable to construction companies).
WHAT IS A BUSINESS LICENSE?
A business license is an authorization or approval given by the Nigerian government through the Department of Citizenship and Business, Ministry of Interior to a foreign-owned corporate body registered for the commencement and operation of a business in Nigeria.
A business license is a permit issued by government agencies that permit Individuals or companies to carry out business within the government’s geographical right. It is authorization to commence a business or participate in a particular industry given by the government or its local agencies where you reside.
In Nigeria, a business license is an approval given by the government, which gives the right to the operation of a business by a foreigner or foreign entity in Nigeria. A business license is issued through the Department of Citizenship and Business, Ministry of Interior to the foreign individual or organization.
A business license permit foreigners to start a business legally in Nigeria. However, it doesn’t take out the need for foreign individuals and employees to get a residential permit. Without the Combined Expatriate Residential Permit and Alien Card (CERPAC), a foreign individual cannot reside in Nigeria and therefore cannot work in Nigeria.
The residential license is usually obtained simultaneously with the business license since it is also issued by the Ministry of Interior in Nigeria.
Both the business license and the expatriate quota are always applied for at the same time because apart from getting a business license, any foreigner who desires to work in Nigeria can only do this through a company after making an application for the expatriate quota in Nigeria. A work permit also called a Combined Expatriate Residence Permit and Alien Card (CERPAC) will then be given to such a foreigner.
As a foreigner or foreign organization looking forward to obtaining a business license in Nigeria, you need to first register your business with the Corporate Affairs Commission (CAC). The commission is delegated with the duty of regulating the formation and incorporation of companies in Nigeria.
Without registering with them, you don’t have a legal business in Nigeria and you can get a business license. While registering with the CAC, as a foreign company or business, you are required to have a minimum share capital of ten million naira (N10, 000,000).
It is, however, pertinent to note that a business license is only needed where the company is owned by foreigners or where an international entity is engaging in a joint venture with a Nigerian corporation.
Moreover, the application for a business license is always made together with the application for expatriate quota in Nigeria. While a business license gives a foreign-owned or controlled company the right to start a business in Nigeria, the expatriate quota is the permission for individual foreign employees or directors of the company to work in Nigeria in case the foreign company decides to send expatriate workers to Nigeria.
For a successful grant of a business license, the above requirements must be met. Once a business license is granted, a registered company with foreign ownership in Nigeria can start its business operation.
Conclusion
The main reason behind the requirements for a business license in Nigeria is for government to see that foreign companies are not edging out Nigerian companies in ordinary businesses, which local companies are already engaging in, and to make sure that foreign workers do not easily chase Nigerian citizens out of employment.
In Nigeria, no foreign entity can start a business without a business license. The business license is gotten from the Ministry of Interiors. Before a business license can be obtained, you must register with the Corporate Affairs Commission (CAC) first, and the National Investment Promotion Commission (NIPC), as well as meet certain other requirements. Having a business license may not be enough if you are carrying out business in certain sectors of the Nigerian economy. For sectors such as petroleum, minerals, and finance, you may also be required to get a business license from the related bodies before you can start the operation.
Frequently Asked Question(s)
How long does it take to obtain a business permit in Nigeria?
It typically takes about 14 working days for a business permit to be processed and issued by the Ministry of Interior in Nigeria.
Do I need a lawyer to register business in Nigeria?
The Corporate Affairs Commission in a bid to ease the incorporation of companies in Nigeria has adopted an online method of registration. However, the process is best commenced through the services of an accredited agent such as a corporate lawyer.
What is the differences between business permits and business license?
Both permits and licenses are essential documents issued by the government authority. Permits require regular inspections, limited time, and more restrictions, whereas licenses are more or less permanent, with fewer restrictions and fewer inspections.
Does small business needs permit?
Whether it is a Sole Proprietorship, Standard Domestic Corporation, One Person Corporation (OPC) or Partnership, it will be necessary to secure a Business Permit for the business. Also, the Business Permit requirement will apply irrespective of the type of business model.
Can I register CAC by myself?
An individual can now register a company online with CAC, as long such an individual understands the requirements for the incorporation process.
Who qualifies as a small business?
The SBA assigns a size standard to each NAICS code. Most manufacturing companies with 500 employees or fewer, and most non-manufacturing businesses with average annual receipts under $7.5 million, will qualify as a small business. However, there are exceptions by industry.
Reference(s)
- https://www.chamanlawfirm.com/ – HOW TO OBTAIN A BUSINESS PERMIT IN NIGERIA
- https://www.mondaq.com/ – Procedure For Business Permit & Business License In Nigeria
- https://www.resolutionlawng.com/ – HOW TO OBTAIN A BUSINESS PERMIT IN NIGERIA
- https://robertinomalaw.com/ – Obtaining a Business Permit in Nigeria
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