The Truth About the ₦100 Million Capital Requirement for Foreign Companies in Nigeria

By Alexander Odidi, Esq. A


Ask around Nigerian business circles and you'll hear the ₦100 million rule quoted like settled law: every foreign-owned company must have ₦100 million in capital, full stop. The reality offers a different view, and understanding where this number actually comes from changes how you should treat it.

Myth 1: "It is a CAMA Law"

It is not. The Companies and Allied Matters Act (CAMA) 2020, the law CAC administers, sets minimum issued share capital at ₦100,000 for private companies generally. This is nothing close to ₦100 million, and no special CAMA provision singles out foreign-owned companies at that figure.

The ₦100 million actually comes from the Federal Ministry of Interior's Revised Handbook on Expatriate Quota Administration (2022), which set ₦100 million in paid-up capital as a condition for granting a Business Permit to a foreign-owned or joint-venture company. It is an immigration-linked requirement, not a company-law one.

Myth 2: "CAC Enforces this Uniformly and Always Has"

This is not quite right. Before December 2023, companies with foreign participation could incorporate with ₦10 million in share capital, which is the standard that had applied for years. 

On 5 December 2023, CAC announced it was implementing the ₦100 million requirement at the point of incorporation. The announcement caused enough alarm that CAC partially walked it back three days later, clarifying that it meant ‘issued’ capital, not ‘paid-up’ capital. This is a real and timely distinction, since issued capital doesn't have to be paid in immediately, while paid-up capital does.

So the figure itself (₦100 million) has stuck, but exactly how and when CAC enforces it at the incorporation stage has shifted more than once. The safer assumption for founders: expect to be asked for it, but confirm current CAC practice before assuming a fixed rule.

Myth 3: Issued Capital and Paid-Up Capital Mean the Same Thing"

They do not, and the difference matters financially. Issued capital is the value of shares a company has formally allotted to shareholders. It doesn't require the money to actually be paid in at the stage of incorporation. 

Paid-up capital is the portion of that issued capital shareholders have actually paid for in cash or assets. CAC's ₦100 million figure, post-clarification, relates to issued capital at incorporation. But the Ministry of Interior's Business Permit requirement is explicitly for ₦100 million in ‘paid-up’ capital, meaning real money or assets actually contributed, not just shares on paper. 

Note: A company can satisfy CAC's incorporation threshold without yet satisfying the Ministry's permit threshold.

Myth 4: "This Applies Only to Fully Foreign-Owned Companies"

This is not true. The requirement is generally understood to apply to any company with foreign participation, meaning at least one foreign shareholder or director, regardless of what percentage of the company they own. A Nigerian-majority company with a single foreign minority shareholder is treated the same way as a 100% foreign-owned subsidiary for this purpose.

What the Requirement is Actually For 

Underneath the confusion, the policy logic is straightforward: it is meant to demonstrate genuine financial commitment before a foreign-owned company gets permission to bring in expatriate staff and operate at scale, not to make incorporation itself harder.

Sector-specific rules (banking, oil and gas, telecoms) can raise the bar even further, since regulators like the CBN and NCC set their own capital thresholds independent of this figure.

Conclusion 

If you're structuring a company with foreign participation, plan for ₦100 million from the outset rather than treating ₦10 million as a safe default, but don't assume the number works the same way at every stage. 

What CAC asks for at incorporation, what the Ministry of Interior asks for at the Business Permit stage, and what "paid-up" versus "issued" actually means for your bank balance are three different questions. Getting a current answer from a corporate lawyer before filing is worth more than any rule of thumb, including this one.

 

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