Company Registration In Nigeria in 2023-24
Nigeria is one of the largest nations situated on the western coast of Africa. Nigeria, which has a population of more than 200 million, has emerged as one of the most alluring countries for businesspeople from all over the world. In addition to that, company registration in Nigeria is preferred by entrepreneurs as the nation permits 100% foreign ownership.
Nigeria is a significant transit hub and one of Africa’s top oil producers, and as such, Nigeria is also placed in the 10th position as the world’s greatest reserve of oil and gas. It also has 20 Special Economic Zones that provide tax perks to business owners. Due to all of this, Nigeria is a desirable place for business owners looking to launch their enterprises.
This article will go over how to register a company in Nigeria. It will outline the benefits and costs that an entrepreneur must consider for Nigeria company registration.
Procedure for company registration in Nigeria
The steps for company registration in Nigeria are discussed below:
Propose and reserve a business name
The initial step for Nigeria company registration is to propose a business name. The entrepreneur must suggest at least two names and check their availability on the Corporate Affairs Commission (CAC) website. If any of the names are registrable, they should be reserved accordingly.
Gather the company documents
The second step in Nigeria company registration is to gather the required documents that will be needed during the incorporation process. These documents include the memorandum of association of the firm, registered office details, etc.
Apply for company registration
Fill out the company registration form and submit the form along with the required documents to the Corporate Affairs Commission.
Submit the fee
The entrepreneur must pay the necessary cost for the business incorporation as well as the stamp duties.
Acquire the Certificate of Incorporation
After the business has been properly established, CAC will provide a Certificate of Incorporation.
Obtain the Taxpayer Identification Number (TIN)
The entrepreneur has to register with the tax authorities and obtain the Taxpayer Identification Number (TIN).
Documents needed to register a company in Nigeria
The following papers must be submitted in order to register a company in Nigeria:
- Memorandum and articles of association
- Details of the directors
- Information about the business’s registered address
- A legal professional’s compliance declaration
- Proof of your stamp duty payment
Business entities for company registration in Nigeria
For company registration in Nigeria, an entrepreneur can establish the following types of businesses:
Public Limited Company
A public limited company may put its shares for sale to the general public on the stock exchange. These kinds of businesses give the general public the chance to subscribe for their shares and turn into stockholders of the firm. The corporation must have at least seven members and the necessary capital should be 500,000 NGN.
Private Limited Company
The private limited company is the most preferred corporate entity used for company registration in Nigeria. A private limited corporation is a distinct legal entity and is distinct from its proprietors and stockholders. As such, members are solely liable for the value of the cash they have contributed, protecting their personal possessions in the event of corporate bankruptcy. In the case of a private limited firm, there should be at least two partners and a total of fifty members. A minimum of 10,000 Naira must be included in the authorized share capital.
Company Limited by Guarantee
Company Limited by Guarantee is a kind of commercial enterprise that is typically established by nonprofit groups and is not intended for financial gain. These kinds of businesses have no share capital, are not member-owned, and don’t make any money. They mostly consist of religious institutions, non-profit organizations, and orphanages.
Sole Proprietorship
A sole proprietorship is a type of corporate entity where there is only one proprietor. Since the founder is the solitary proprietor of the firm, he bears the majority of the firm’s financial obligations while also being the only one to benefit from earnings. There is unlimited liability and as such, the business owner is responsible for losses up to the value of his personal resources in case of any debts and liabilities.
Eligibility criteria for Nigeria company registration
Here are the eligibility criteria for Nigeria company registration:
- Shareholders: At least two stockholders are required for Nigeria company registration.
- Directors: At least 2 directors are needed for company registration in Nigeria.
- Registered business address: In order to register a company in Nigeria, you must have a local registered business address.
- Required capital: Any allowed share capital amount may be used by Nigerian nationals to create a corporation, although, a foreign-owned firm must possess at least ten million NGN in authorized share capital in order to be registered.
- Corporate Secretary: A corporate secretary is necessary for firms operating in Nigeria.
Taxation structure in Nigeria
Nigeria’s tax system is adapted to the country’s political system. Nigeria has a decentralized tax system in which the Federal, State, and Local government is in charge of handling taxes within their own area of authority.
Here are the various taxes that business has to pay after they register a company in Nigeria:
- Corporate income tax: The rate of corporate taxes that has to be paid by businesses in Nigeria is 30%.
- Value-added tax: The standard VAT rate is 7.5%. However, certain products and services have 0% VAT.
- Custom taxes: Nigeria solely imposes customs taxes on imports. Rates range from 5% to 35%, on average, depending on the item.
- Capital gains tax: Gains generated by the sale of taxable commodities and accruing to a taxable entity are liable to 10% tax under the CGT Act.
Cost for company registration in Nigeria
Entrepreneurs who register a business have to pay the cost of company registration in Nigeria.
Here are the different costs that an entrepreneur must cover if they register a company in Nigeria:
- The cost to reserve your company name is NGN 500.
- NGN 10,000 is the registration fee for private companies with a share capital of up to NGN 1 million.
- The cost of registering a private company with a share capital of NGN 1 million to NGN 500 million is NGN 5,000 for additional millions.
- The annual return filing charge is NGN 5,000.
There are additional costs, such as preparing the business documents, registered office address, etc.
Why register a company in Nigeria?
- Tax benefits are provided by a number of economic zones, which encourages the establishment of businesses in Nigeria.
- One of the largest free market economies in Africa is found in Nigeria.
- Nigeria provides the lowest production costs in Africa because trained labor is affordable and readily available in the country.
- The political climate in Nigeria is secure and as such the country is favorable to entrepreneurship.
- Businesses that are conducting research and development are given access to free trade zones and tax breaks. Additionally, investors are permitted repatriation of 100% of profits and dividends.
Advantages of Nigeria company registration
Here are the advantages of Nigeria company registration:
Access to a wealth of resources
Nigeria is blessed with an abundance of resources. The substantial minerals industry offers fantastic investment potential. The nation also enjoys the benefit of a sizable amount of land that may be exploited for agricultural production.
Tax benefits
In Nigeria, businesses that focus on exports benefit from attractive tax incentives. Profits generated from the sale of products exported from Nigeria are lawfully not subject to taxes if they are brought back to the country and utilized solely for the purchase of raw resources, heavy machinery, and replacement components.
Special Economic Zones
Nigeria has 20 Special Economic Zones that attract international manufacturing investments because projects there benefit from tax breaks offered by the federal, state, and municipal governments. Raw supplies as well as other products imported from abroad are duty-free.
Political Stability
Nigeria has a politically stable atmosphere in comparison to the other African market. As opposed to investing in nations with unpredictable political contexts, this ensures corporate stability for both domestic and international companies. The Nigerian government has enacted pertinent legislation and rules that benefit investors and businesspeople in the country, including government subsidies, tax deductions, etc.
Conclusion
Nigeria company registration is preferred by entrepreneurs worldwide as there are numerous benefits of incorporating a company there. The country has one of the greatest economies, and a sizable population, and is also endowed with abundant natural resources and oil.
If you wish to register a company in Nigeria, you can consult our professionals at Odint Consultancy. Our expert will guide you throughout the incorporation process.
FAQ’s
A firm can be registered in Nigeria by filling out the business incorporation form and submitting it along with the required documents to the Corporate Affairs Commission.
- The country has one of the greatest economies, and a sizable population, and is also endowed with abundant natural resources and oil.
- Tax benefits are provided by a number of economic zones, which encourages the establishment of businesses in Nigeria.
- One of the largest free market economies in Africa is found in Nigeria.
- There must be a minimum of two shareholders for Nigeria company registration.
- At least 2 directors are needed for company registration in Nigeria.
- Every business in Nigeria needs to have a registered office address.
- In Nigeria, a director must be at least 18 years old.
- The cost to reserve your company name is NGN 500.
- NGN 10,000 is the registration fee for private companies with a share capital of up to NGN 1 million.
- Private businesses with share capital between NGN 1 million and NGN 500 million must pay the incorporation cost of NGN 5,000 for every additional million.
The rate of CIT in Nigeria is 30%.
- There are a lot of resources available in Nigeria.
- In Nigeria, businesses that focus on exports benefit from attractive tax incentives.
- Nigeria has numerous Special Economic Zones
- Nigeria has a politically stable atmosphere in comparison to the other African market.
