LegalBizPro - CAC Business Guides

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 Uniform...

         Image Credit: istock Because Nigeria is one of the biggest economies in Africa and the world, foreign investors want a piece of the action. But can a company from another country operate in Nigeria and actually do business? The short answer is yes; but there are rules to follow. Keep reading!  The Basic Rule Under Nigerian law, any foreign company that wants to carry on business in Nigeria must first register a local company with the Corporate Affairs Commission (CAC). This is stated clearly in the Companies and Allied Matters Act (CAMA).  In other words, a foreign business cannot simply open an office and start trading. It must become a Nigerian company, even if it's owned by non-Nigerians. This means the foreign business usually sets up a Nigerian subsidiary, which is treated as a separate legal entity from the parent company abroad. Steps a Foreign Business Entity Must Take Reserve a company name with the CAC. Incorporate a company in...