Under Nigerian law, it is very important that every foreigner investing in a local business in Nigeria is required to procure a Certificate of Capital Importation (“CCI”) on the inflow of foreign currency or raw materials or equipment imported into Nigeria.
A Certificate of Capital Importation (“CCI”) is a certificate issued by a Nigerian bank confirming an inflow of foreign capital either in the form of cash (loan or equity) or goods. A CCI is usually issued in the name of the applicant company within 24- 48 hours of the inflow of the capital into Nigeria.
The primary purpose of the CCI is to guarantee access to the official foreign exchange market for repatriations of capital and returns on investment, which include dividends, interest, and capital on divestments. The requesting company must present a copy of the CCI to the Nigerian bank to process a remittance.
Essentially, a capital importation can be done through an authorized dealer, which is usually a commercial bank or via a debt-equity scheme of the federal government.
A foreign Investor wishing to buy Shares or import foreign capital for doing business in Nigeria should freely import the capital through an authorized dealer. The imported currency is convertible into the Naira at the official foreign exchange market.
The capital importation could be in cash or consideration other than cash, e.g. importation of equipment or raw materials.
Debt-Equity Scheme is a debt management programme introduced by the Federal Government in 1988 as part of National economic restructuring efforts. Capital can be brought into the country through the debt-equity programme of the Federal government, whereby qualified Companies and Individuals purchase Nigeria’s debt instrument at a discounted value from any stock exchange anywhere in the world.
The Investor will get the naira equivalent of the face value of the instrument in Nigeria, and use the funds for investment in Nigeria. The Debt Conversion Committee (DCC) in the Central Bank of Nigeria (CBN) implements it.
The debt-equity scheme is open to Companies and individuals; Foreigners and Nigerians, Resident or non- Residents. To participate, a Company must have a minimum paid-up capital of N5, 000,000.00. The minimum amount of debt conversion to be considered under the Scheme is $250,000.
However, it is worthy of note that where the capital importation to be done in form of equity or cash through an authorized dealer, all required documents for processing of the CCI, including the application letter for it must be received by the authorized dealer before the arrival of funds.
In conclusion, it suffices to state that the importance of the Certificate of Capital Importation on foreign investment and foreign investors coming into Nigeria cannot be deemphasized. The vital purpose of this certificate is to assure or guarantee foreigners investing in Nigeria economy of unfettered or unhindered access to their funds, whenever they choose to repatriate it.
It is however worthy of note that in a bid to enhance transparency and efficient processing of foreign investment flows into Nigeria, the Central Bank of Nigeria has now implemented the Electronic Certificate of Capital Importation (eCCI), which reduces the bottlenecks and accelerates the processing of the certificate.
Written by the Corporate & Commercial Law Department at the Resolution Law Firm, Nigeria.