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Starting a Business in Imo

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Imo Trade & Investment Center,
Pocket Layout, Port Harcourt Road, Owerri,
Imo State, Nigeria



STARTING A BUSINESS IN IMO


On this Page

How to Start a Company
Four Types of Business Structures in Nigeria
Incorporating a Company with corporate Affairs Commission
Types of Registrable Business Organisations
Establishing A Nigeria Company
Reserving A Company Name
Business Incorporation Process
Company Share Structure
Operations Of Foreign Companies In Nigeria
Acquiring A Nigerian Company
Appointment Of Foreign Directors
Preparation And Filling Of Incorporation Deeds
Finding An Office Location
Listing On The Nigeria Stock Exchange (Nse)
Registering A Trademark
Register With The Tax Authorities
Environmental Impact Assessment


NOTE TO READER

Whether you are just starting up, expanding your activities, or looking to establish your Africa regional headquarters in Imo State, Nigeria, Imo State Investment Promotion Agency can put you in fast-track contact with the main national and sub-national stakeholders with a view to speeding up your business launch or expansion project in Imo.

As an Investment Promotion Agency, we do much more than promoting and attracting investment, we also offer overseas investors and foreign companies a full and varied slate of expertise and professional support.


HOW TO START A COMPANY

There are a number of important considerations for investors when establishing a business in Imo. Investor will generally choose between establishing a new company or acquiring an existing company. If establishing a new business, a variety of business structures are available, each with their own regulatory and tax considerations.


FOUR TYPE OF BUSINESS STRUCTURES IN NIGERIA

•  Sole Proprietorship;
•  Partnerships;
  Trust;
•  Companies.
Investors need to consider carefully which structure best suits their business needs. The business structure will determine the tax and legal implications


INCORPORATING A COMPANY WITH CORPORATE AFFAIRS COMMISSION

The Companies’ and Allied Matters Act (CAMA) of 1990 (as amended) is the legal framework for the control and regulation of the activities of companies in Nigeria. The Act established the Corporate Affairs Commission (CAC) as an autonomous agency charged with the responsibility for the registration and regulation of companies, business names and incorporated trustees in Nigeria.

Download Relevant document Companies and Allied Matters Act 1990
Relevant institutions CAC


TYPES OF REGISTRABLE BUSINESS ORGANIZATIONS

Registrable business organizations in include:

1. Private Limited Liability Company (LTD):

This is the most common form of business set up by investors and it requires a minimum share capital of NGN 10, 000. A private limited liability company is a legal entity in its own right, separate from those who own it. The company requires a minimum of two (2) and a maximum of fifty (50) shareholders and directors. Such a company is restricted from transferring its shares freely and prohibited from inviting the public to subscribe to its shares, debentures and/or deposit money for fixed periods or payable at call, whether or not bearing interest.

2. Public Limited Liability Company (PLC):

The minimum share capital for this type of company is NGN 500,000. A Public Limited Company required a memorandum of Understanding of two (2) shareholders. There is no restriction on the maximum number of shareholders or their right to transfer their shares freely. The public may be invited to subscribe to its capital and the shares may be traded on any securities Exchange.

3. Company Limited by Guarantee (GTE):

Generally incorporated as a not-for-profit, this kind of company limits its members’ liability to the amount of their respective guarantees.

4. Unlimited Liability Company (Ultd):

This type of company has no limit on the liability of its members.

5. Business Name:

Registered as Sole Proprietorship or Partnership.

6. Incorporated Trustees:

Usually formed for not-for-profit or charitable purposes

For further information visit CAC


ESTABLISHING A NIGERIA COMPANY

International investors interested in entering the Nigeria market may wish to establish a Nigerian company or establish a new Nigerian subsidiary which also operates as a Nigeria company. Nigerian companies are incorporated businesses that are also distinct legal entities. Companies in Nigeria must be registered with the Corporate Affairs Commission (CAC).


RESERVING A COMPANY NAME

You can only use a name that is not identical to an existing company or business name. A name availability search must be conducted at the Corporate Affairs Commission registry to see if the name is available for use.


BUSINESS INCORPORATION PROCESS

Businesses can be registered online via the CAC Company Registration Portal. Through this site, investors – or their agents – can conduct name searches, complete the required forms, submit all relevant incorporation documents, and also pay associated fees. However, investors may also visit the CAC office or ISIPA One-Stop Centre (IOSC) to complete or submit paper applications.

The online registration process is laid out below:

1.   Create an account on the CAC portal. This can only be created by one of the company directors/shareholders or an accredited agent (a Lawyer, Chartered Accountant or a Chartered Secretary) https://services.cac.gov.ng/
2.   Conduct name search and reserve a name.
3.   Complete registration form (CAC 1.1. Application for Registration) providing details of the directors, shareholders and nature of business.
4.   Pay CAC filing fees and stamp duty. The stamp will be electronically affixed once payment is made.
5.   Download completed online form and Memorandum and Articles of Association, then append signatures accordingly.
6.   Upload scanned documents for processing.
7.   Present original copies of uploaded documents and collect certificate of incorporation/registration from the preferred location. Once the certificate of incorporation is ready, a Tax Identification Number (TIN) will be generated by the Federal Inland Revenue Service and sent to registrant’s email.


DOCUMENTS REQUIRED BY CAC FOR BUSINESS INCORPORATION

•   Form CAC 1.1. Application for Registration
•   Memorandum and Articles of Association
•   Proficiency certificate (where applicable)
•   Recognized form of identification (passport bio-data page, drivers’ licence or National Identity Card) for Director(s)/Shareholder(s) and Secretary
•   Foreign Certificate of Incorporation and Board resolution for subscription to Nigerian company (where applicable)
•   Residence permit of resident foreigners (where applicable)
•   Stamp duty evidence of payment
•   Evidence of payment to CAC (the fees to be paid for incorporation is dependent on the volume of shares to be registered).

See Link: Summary of CAC fees and forms


EXEMPTION FROM INCORPORATION

Foreign companies intending to do business in Nigeria may apply for exemption from the standard registration requirements if they are:

•  Invited by any tier of government for specific individual projects;
•  Executing specific individual loan projects on behalf of a donor country or international organisation;
•  Foreign government-owned companies engaged solely in export promotion activities; and
•  Engineering consultants or technical experts engaged in specialist projects with any tier of government Such applications for exemption shall be forwarded to the office of the Director General of ISIPA.


COMPANY SHARE STRUCTURE

In line with the Companies and Allied Matters Act, all categories of company shares (ie whether ordinary or preferential) issued by a company must carry one vote in respect of each share. Shares with weighted voting right are prohibited. A company must have at least 2 non-employee share holders. However, private companies must not have more than 50 non-employee shareholders.


OPERATIONS OF FOREIGN COMPANIES IN NIGERIA

Foreign investors or offshore companies can hold 100% equity stake in a Nigerian company. However, a foreign company wishing to set up business operations in Nigeria should take all steps necessary to obtain incorporation of the Nigerian subsidiary as a seperate entity in Nigeria for that purpose. Until so incorporated, the foreign company may not carry on business in Nigeria or exercise any of the powers of a registered company.


ACQUIRING A NIGERIAN COMPANY

An alternative to establishing a new or subsidiary company may be to acquire an existing Nigerian company. Merger and Acquisition processes in Nigeria are regulated by the Securities and Exchange Commission (SEC). A proposal to acquire a company in Imo is subject to approval by ISIPA in collaboration with the ministry of Commerce. Contact us for details.


APPOINTMENT OF FOREIGN DIRECTORS

The promoters of business ventures in Nigeria are free to appoint Directors of their choice, either foreign or Nigerian, and the Directors may be residenrs or non-resident.


PREPARATION AND FILLING OF INCORPORATION DEEDS

Companies must have a Memorandum and Articles of Association, file a copy of same at the Corporate Affairs Commission registry, effect payment of stamp duties and conclude registration of the company as a legal entity.

ISIPA One -stop center can execute incorporation and other statutory documents on behalf of the foreign investor or offshore company pending the commencement of business. Contact us for more.


FINDING AN OFFICE LOCATION

If you are looking to acquire or lease a location, ISIPA one-stop center can provide you with a list of options that help meet your criteria. In the interim, you may with our agreement use our address as your Nigweran address.


LISTING ON THE NIGERIA STOCK EXCHANGE (NSE)

Nigeria has a modern and active stock market, allowing access to long-term capital. To obtain and maintain an NSE listing, companies need to meet the prescribed requirements set out in the stock exchange listing rules. This includes company disclosure and reporting requirements.


REGISTERING A TRADEMARK

Companies entering Nigeria will want to protect their rights and prevent others from using their name by registering a trade mark.


REGISTER WITH THE TAX AUTHORITIES

The Federal Inland Revenue Service (FIRS) and State Board Internal Revenue are responsible for the collection of corporate and personnel taxes, respectively.

Every company, business name or incorporated trustee must be registered with the Federal Inland Revenue Service (FIRS) and make and deliver to CAC and the Annual Return in prescribed Forms within stipulated time. Filling of financial return must be done with 18months of incorporation/registration and must be completed and filed within 42 days after the organization's Annual General Meeting. A financial year can in princile start on any given date.


Environmental Impact Assessment

The Environmental Impact Assessment (EIA) is used to evaluate the probable positive and negative environmental, health and social impacts of a proposed project. The process provides the Federal Ministry of Environment and National Environmental Standards Regulatory and Enforcement Agency (NESREA) with information to determine the appropriate permit status of a project.

See Link: Permits


The procedures for obtaining EIA Certificate are outlined below:

1.   Applicant (i.e.approved company representative) submits a comprehensive project proposal and completed EIA Notification form to the Ministry of Environment.
2.   The Ministry registers the proposal and issues a registration number, while providing necessary guidelines to the applicant.
3.   NESREA conducts an Initial Environmental Examination (IEE) and presents a screening report within 10 days.
4.    Applicant conducts a scoping exercise to ensure that all significant impacts and reasonable alternatives are addressed in the intended EIA. A public hearing may be requested if there is public interest in the project.
5.   Applicant submits the scope of the EIA, and if approved by NESREA, undertakes the EIA study.
6.   Applicant submits the draft EIA report. This should include proceedings of consultations with adjoining communities and other stakeholders.
7.    The draft EIA report is reviewed by an independent panel, relevant regulators and the public (the report is displayed in the public for a period of 21 working days.)
8.   Applicant develops and submits the final EIA report, incorporating all review comments.
9.   Ministry approves final EIA report; issues the Environmental Impact Statement (EIS) and the EIA Certificate
10.   Applicant proceeds to implement the project according to specifications and stipulated mitigation measures contained in the final EIA report. This process shall be monitored by the Ministry from site preparation to commissioning.

See Link: Relevant Link: Environmental Guidelines Revision