Can A Foreign Company Do Business In Nigeria Without Incorporation? – Corporate and Company Law

Generally , for a foreign company to carry on business in
Nigeria, such foreign company is required to incorporate a separate
entity for that purpose in Nigeria, and except a foreign company
incorporates a separate entity in that regard such foreign company
shall not carry on business in Nigeria or exercise any of the
powers of a registered company.

In fact foreign companies without a separate entity incorporated
in Nigeria are prevented from having a place of business or an
address for service of documents or processes in Nigeria for any
purpose other than the receipt of notices and other documents
preliminary to incorporation¹.
In EdicomaInt’ Inc v C.I.E
Ltd² the Court held that a foreign company
not registered in Nigeria cannot carry on business in Nigeria
without incorporation.

However, despite the requirement of incorporation, it is
pertinent to note that under certain circumstances a foreign
company that falls within certain categories can be exempted from
the requirement of being incorporated as condition to carry on
business in Nigeria. Thus, by the combined provisions of Section
78(3) and Section 80 of the Companies and Allied Matters Act, 2019
the following foreign companies may be exempted from the
requirement of incorporation having followed the laid down
procedures to wit:

1. Foreign company granted exemption under the previous Companies
   Act;




2. Foreign company exempted under any treaty to which Nigeria is a
   party;




3. Foreign company exempted by the Minister in charge of Trade
   upon compliance with Section 80(1),(2) and (3) of CAMA, 2019.

Before the Minister can exempt a foreign company such foreign
company must fall within the following categories to wit:

1. Foreign companies invited to Nigeria by or with the approval of
   the Federal Government to execute any specified individual
   project;




2. Foreign companies which are in Nigeria for the execution of
   specific individual loan projects on behalf of a donor country or
   international organization;




3. Foreign government-owned companies engaged solely in export
   promotion activities; and




4. Engineering consultants and technical experts engaged on any
   individual specialist project under contract with any of the
   governments in the Federation or any of their agencies or with any
   other body or person, where such contract has been approved by the
   Federal Government.

Where a foreign company falls under any of the above stated
categories, for such to carry on business in Nigeria without being
incorporated in Nigeria, it must apply in writing to the Minister
in charge of trade to be exempted setting out the following facts
in the said application:

1. The name and place of business of the foreign company outside
   Nigeria;




2. The name and place of business or the proposed name and place
   of business of the foreign company in Nigeria;




3. The name and address of each director, partner or other
   principal officer of the foreign company;




4. A certified copy of the charter, statutes, or memorandum and
   articles of association of the company, or other instrument
   constituting or defining the constitution of the company and if the
   instrument is not written in the English language, a certified
   translation thereof;




5. The names and addresses of one or more persons resident in
   Nigeria authorized to accept, on behalf of the foreign company,
   service of processes and any notice required to be served on the
   company;




6. The business or proposed business in Nigeria of the foreign
   company and the duration of such business;




7. Particulars of any project previously carried out by the
   company as an exempted foreign company; and




8. Such other particulars as may be required by the Minister or
   Secretary to the Government of the Federation.

Having satisfied these requirements and other conditions
considered necessary in any circumstance, the Minister will grant
the exemption and specify the period or the project or series of
projects for which the exemption is granted which shall lapse at
the end of such period or upon the completion of such project or
series of projects³. The Minister shall publish in the
Federal Government Gazette the name of the foreign company to which
exemption from incorporation has been granted and the period or the
project(s) for which exemption is granted⁴. Upon such
exemption the foreign company shall give notice of such exemption
to CAC within 3o days of grant of such an exemption⁵

Conclusion

It is therefore clear based on the above that though foreign
companies are generally required to incorporate a separate entity
in Nigeria before such foreign company can carry on business in
Nigeria, in certain cases as stipulated in Sections 78(3) and
Section 80 of CAMA 2019, where a foreign company is exempted, such
can carry on business in Nigeria without being incorporated.

Footnotes

1. See Section 78 (1) and (2) of the Companies and
Allied Matters Act, 2019.

2. [2007] Al FWLR (Pt. 357) 990 at 1001 paras A-C
(CA).

3. See Section 80(4).

4. See Section 80(6)(a)

5. See Section 80(7). It is important to note that
failure to give such notice to the Corporate Affairs Commission
(‘CAC’) within the prescribed period attracts penalty
to be determined by the CAC.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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