Registering a company in Nigeria is an essential step for businesses looking to operate legally and scale efficiently within the country.
This comprehensive guide will take you through the step-by-step process of registering a company with the Corporate Affairs Commission (CAC), provide a breakdown of associated costs, and clear up common misconceptions. For registering a company in Nigeria as a foreigner, click here for a detailed breakdown.
Types of Companies in Nigeria
Under Nigerian law, the following types of companies can be registered with the CAC:
- Private Limited Liability Company (Ltd): The most common form of company, limited by shares.
- Public Limited Liability Company (PLC): Companies whose shares are traded publicly.
- Company Limited by Guarantee: Often used for non-profit organisations but distinct from incorporated trustees.
Step-by-Step Process for Registering a Company in Nigeria
Here is a detailed step-by-step process on how to register your company in Nigeria.
Step 1: Name Availability Search
The first step in registering your company is to check if your desired business name is available. You can conduct a name search on the CAC portal. This process costs ₦500 and typically takes 2-3 days.
Step 2: Reserve Your Company Name
Once the name is approved, the next step is to reserve the name. The name reservation is valid for 60 days.
Step 3: Pre-Incorporation Online Forms
Complete Online Form, which will require details such as:
- The name and address of the company
- The details of the directors and shareholders
- The business’s share structure
Step 4: Pay the Applicable Fees
The cost of registering your company depends on its share capital. Below is the breakdown:
| Type of Company | Share Capital | CAC Registration Fees |
|---|---|---|
| Private Limited Company | Up to ₦1,000,000 | ₦10,000 |
| Private Limited Company | ₦1,000,001 – ₦500,000,000 | ₦5,000/₦1,000,000 increment |
| Public Limited Company | Up to ₦1,000,000 | ₦20,000 |
| Public Limited Company | ₦1,000,001 – ₦500,000,000 | ₦10,000/₦1,000,000 increment |
Other Associated Costs:
- Stamp Duty: 0.75% of the company’s share capital.
- Legal Fees: Legal services for company registration can range from ₦50,000 to ₦500,000
Step 5: Upload the Required Documents
Once you have paid the registration fees, the following documents must be uploaded:
- Valid identification (e.g., National ID, International Passport, or Driver’s License)
- Proof of address for the business and directors
Step 6: Submit the Documents
After uploading, submit your application for CAC review. The approval process usually takes 1 to 2 weeks.
Step 7: Collect Your Certificate of Incorporation
Upon approval, you will receive a Certificate of Incorporation, which confirms that your company is legally registered in Nigeria.
Costs Involved in Registering a Company in Nigeria
Incorporation costs in Nigeria depend largely on the type of company and the share capital.
CAC Registration Fees
| Type of Company | Share Capital | Registration Fees |
|---|---|---|
| Private Company | Up to ₦1,000,000 | ₦10,000 |
| Private Company | Over ₦1,000,000 to ₦500,000,000 | ₦10,000 + ₦5,000 per additional ₦1,000,000 share capital |
| Public Company | Up to ₦1,000,000 | ₦20,000 |
| Public Company | Over ₦1,000,000 to ₦500,000,000 | ₦20,000 + ₦10,000 per additional ₦1,000,000 share capital |
Name Reservation Fee
| Service | Fee |
|---|---|
| Name Reservation (all company types) | ₦500 |
Other Fees
- Stamp Duty: 0.75% of the company’s share capital is paid as stamp duty.
- Name Reservation: ₦500.
- Professional Fees: For those engaging consultants or lawyers, professional fees may range from ₦50,000 to ₦500,000
Company Registration for Foreigners
Foreigners can register a company in Nigeria under the following conditions:
- Minimum Share Capital Requirement: The minimum share capital for a foreign-owned company is ₦100 million.
- Local Directors: Foreign companies must appoint at least one local director.
- Business Permit: A business permit from the Nigerian Investment Promotion Commission (NIPC) is required.
- Expatriate Quota: Foreigners must apply for an expatriate quota, which allows non-Nigerians to work in the company.
Frequently Asked Questions (FAQs)
1. How long does it take to register a company in Nigeria?
On average, registering a company takes between 7 and 14 working days.
2. Do I need a lawyer to register my company?
While not mandatory, hiring a lawyer or professional can help ensure that the process is smooth and error-free.
3. Can foreigners own 100% of a Nigerian company?
Yes, foreigners can own 100% of a company in Nigeria, but they must meet the minimum share capital requirement of 100m.
4. What is the difference between a Private Limited Company and a Public Limited Company?
A Private Limited Company cannot offer its shares to the public, while a Public Limited Company can list shares on the Nigerian Stock Exchange.
5. What happens if I do not file annual returns?
Failing to file annual returns can lead to penalties or even the deregistration of your company.
Common Misconceptions About Company Registration in Nigeria
1. Sole Proprietorship and Limited Liability Companies are the same
This is incorrect. A sole proprietorship is not a type of company but rather a registered business structure, while a Limited Liability Company is a registered entity with its own legal personality.
2. Company registration guarantees tax exemption
All companies in Nigeria are required to pay taxes. Registering your business does not exempt you from corporate taxes.
3. You do not need to file annual returns
Every registered company in Nigeria must file annual returns to the CAC. Failing to do so can result in penalties.
Post-Registration Obligations
After successfully registering your company, you are required to fulfill the following post-registration obligations:
- Tax Compliance: Register with the Federal Inland Revenue Service (FIRS) to obtain a Tax Identification Number (TIN) and comply with VAT and income tax regulations.
- Annual Returns: Submit annual returns to the CAC to avoid penalties.
By following these steps and considering the cost breakdown, you can successfully register your company in Nigeria without hassle. Make sure to comply with post-registration requirements to keep your business in good standing.
