HOW TO SET UP A REPRESENTATIVE OFFICE IN NIGERIA

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HOW TO SET UP A REPRESENTATIVE OFFICE IN NIGERIA

REPRESENTATIVE OFFICE IN NIGERIA

REPRESENTATIVE OFFICE IN NIGERIA

Any company conducting business in Nigeria is required to register with the corporate affairs commission (CAC). A Foreign company wishing to setup business operations in Nigeria must take steps in obtaining local incorporation of the Nigerian branch or subsidiary which has a separate entity in Nigeria. Another alternative option is for the foreign company to set up a representative office in Nigeria.

Foreign companies must adhere to the strict rule has provided under Section 54 of the Companies and Allied Matters Act which dictate that “to do business in Nigeria, a foreign investor must incorporate a foreign entity in Nigeria and until it is incorporated, it shall have no place or business or address of service of documents or processes in Nigeria for any purpose other than receipt of notice or other documents as matters preliminary to incorporation under CAMA”.

In some of our write-ups, we discussed the procedure to register a foreign-owned company in Nigeria and how to set up a business in Nigeria.

Often times, investors are faced with the growing need of their products or services entering into a new market. Investors rely on the direct or indirect presence of entry into the market space. One of the direct presences is the use of representative offices through agents to supervise business activities.

Generally, Foreign companies who are interested in doing business in Nigeria can incorporate a wholly foreign company in Nigeria with the Corporate Affairs Commission. Also, foreign companies who cannot wholly incorporate a company in Nigeria can set up representative office in Nigeria which must be registered with the CAC. However, the representative office cannot engage in business, negotiate or conclude contracts. The office only serves as a liaison or promotional office. The expenses run in the representative office must be an inflow from the foreign company.

The key features of a Representative Office are;

  • Representative office has no legal status and as such cannot be sued or sue in itself, it is often times a temporary administrative arrangement.
  • The liabilities of a representative office extend to the parent company which is the foreign company.
  • The only allowed activities of a representative office is for conducting market research, act as storage of goods, or serves as a promotional office. It is restricted from performing contracts, entering into negotiations etc.
  • A representative office is not subject to tax payment as it cannot generate income.

In conclusion, foreign companies can set up representative offices in Nigeria for the purpose of promoting the business. However such offices cannot engage in business nor conclude contracts. The above listed features must be considered before a foreign investor decides on the option suitable for the exposure of its business.

In choosing the option of setting up a representative company in Nigeria, the nationality of the agent must be put into consideration. If the agent in charge of the representative office is not a Nigerian, he or she would need to obtain the Nigerian visa and necessary permit to work and live in Nigeria.

It is also necessary that the foreign company operates the representative office by way of an incorporated company, which implies that such representative office must be registered with the CAC.

By Corporate & Commercial Law Department at Resolution Law Firm

Getting Help:

Resolution Law Firm’s Corporate & Commercial Law Department assist and offer advisory in setting up a representative office in Nigeria. You can contact us using the below details:

Email: info@resolutionlawng.com

Telephone: +2348099223322

2 Comments

  1. Raji Omotayo says:

    Please i will like to register my NGO, I need an assistant…

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