By a notice dated 5th December 2023 which has now been retracted, the Corporate Affairs Commission (the “CAC”) informed the public of the commencement of the implementation of the N100 million minimum paid-up capital requirement for companies with foreign participation in line with the Handbook on Expatriate Quota Administration (Revised 2022) (the “Handbook”). The previous minimum capital for companies with foreign participation was N10 million.

The Handbook was published by the Ministry of Interior (the “Ministry”) in furtherance of its responsibility to administer and technically enforce the Nigeria Immigrations Act, 2015, and the Immigration Regulations 2017 as it relates to the establishment of business in Nigeria by foreigners and the employment of expatriates.

Although the Ministry did not indicate a timeline for compliance with the N100 million minimum paid-up capital requirement for companies with foreign participation, any such company that approaches the Ministry for any matter, including amendment or renewal of its expatriate quota, now needs to show that it has the revised minimum paid-up capital. Even though the CAC has retracted its notice on this subject, the obligation for companies with foreign participation to comply with the Handbook remains unchanged.

For these reasons, companies with foreign participation whose capital falls below the revised minimum paid-up capital threshold need to consider taking steps to increase their share capital to at least N100 million.

ACTIONS FOR COMPLIANCE

To comply, an affected company needs to first increase its share capital to the required minimum by filing an increase in share capital at the CAC. After filing at the CAC, the company should import capital and obtain an Electronic Certificate of Capital Importation (e-CCI). The e-CCI serves as evidence of compliance with the minimum paid-up capital requirement and is one of the documents that will be presented to the Ministry while applying for the amendment of business permits or amendment/renewal of expatriate quotas.

Below are the steps that companies with foreign participation need to take to be compliant:

  1. Pass an ordinary resolution authorising an increase in the company’s share capital to at least N100 million;
  2. Allot the new shares while taking cognisance of the pre-emptive rights of the shareholders;
  3. Pass a resolution approving the amendment of the memorandum of association to show the new share capital;
  4. Import capital through an authorized dealer; and
  5. Obtain an Electronic Certificate of Capital Importation (e-CCI).

Essentially, all shares in the company must be paid up following the increase, and the value of equipment or machinery imported into Nigeria may form a portion of the paid-up capital.

Our team will be glad to walk you through the compliance process. You can reach out to us at compsec@aelex.com  for further assistance.