Business Permit in Nigeria is the authorization for the start and operation of a business by foreigner either as an individually owned company, a branch or a subsidiary of a foreign company in Nigeria.
A registered company wholly owned by foreigners is required to obtain a business permit from the Ministry of Interiors before it can commence a business operation in Nigeria. Possession of business permit allows registered companies to conduct business within the government’s geographical jurisdiction but does not exempt the holder from the requirement of obtaining a residence permit or visa for entry into Nigeria.
Pursuant to Section 36 of the Immigration Act, no person other than a Nigerian citizen shall, on his own account or in partnership with any other person, practice a profession or establish or take over any trade or business whatsoever or register or take over any company with limited liability for any purpose without the written consent of the Minister of Internal Affairs. The consent of the Minister of Internal Affairs is issued in the form of Business Permit in Nigeria.
Apart from obtainment of business permit, every foreigner who seeking to work in Nigeria as a worker or control any business must only do so through the company upon making application for expatriate quota in Nigeria. The requisite work permit, otherwise known as Combined Expatriate Residential Permit and Alien Card (CERPAC) can now be issued to every foreigner working in Nigeria. The application for expatriate quota must also be made to the Ministry of Interiors.
Meanwhile, a registration with the Nigerian Investment Promotion Commission (NIPC) is one of the prerequisites for a business permit from the Ministry of Interiors. The registration with NIPC must not be confused with the registration for a business permit. The NIPC is set up to monitor and promote foreign participation in the Nigerian business sectors.
By and large, every application for a business permit in Nigeria must be accompanied with the followings:
It is, however, important to note that business permit is only required where the company is entirely owned by the foreigners or where an international entity is engaging in a joint venture with Nigeria corporation. A citizen participation in any company may obviate the need for the business permit.
As of practice, the application for a business permit is always made together with the application for expatriate quota in Nigeria. While business permit grants a foreign-owned or controlled company an authority to commence a business in Nigeria, the expatriate quota is the approval for individual foreign employee or director(s) of the firm to work in Nigeria.
Additionally, business permit must also not be confused with certain business licenses a company must acquire to participate in certain sectors of the economy. Some of the Nigerian business sectors have applicable licenses, which any local company or foreign-owned company seeking to trade in such sector must comply with. For instance, every company seeking to deal in mineral resources must possess a license to own and purchase mineral resources from the Ministry of Solid Minerals Development. In the same vein, every company seeking to trade in petroleum sector must obtain a license to deal in petroleum product from the Department of Petroleum Resources (DPR). Therefore a business licence applicable to any sector must be obtained by either local or foreign-owned company seeking to carry out a business activity in such sector.
Finally, for a successful grant of a business permit, the aforementioned requirements must be complied with. Once a business permit is granted, a registered company with foreign ownership in Nigeria can commence a business operation.
The reason behind the requirements of both business permit and expatriate quota in Nigeria is for government to ensure that foreign companies are not edging out Nigerian companies in ordinary businesses, which domestic companies are already engaging in, and to ensure that foreign workers do not easily display Nigerian citizens out of employment.
Written by Corporate & Commercial Law Department at Resolution Law Firm, Nigeria
NOTE: Resolution Law Firm assists foreign-owned companies to process requisite Business Permits and Expatriate Quotas in Nigeria. The Law firm can be reached via above contact details.