The sections, word for word
Every section on this subject, exactly as printed in the Official Gazette (Act No. 3 of 2020). The explanation follows beneath.
Section 78. Foreign companies intending to carry on business in Nigeria
(1) Subject to sections 80-83 of this Act, every foreign company which before or after the commencement of this Act was incorporated outside Nigeria, and having the intention of carrying on business in Nigeria, shall take all steps necessary to obtain incorporation as a separate entity in Nigeria for that purpose, but until so incorporated, the foreign company shall not carry on business in Nigeria or exercise any of the powers of a registered company and shall not have a place of business or an address for service of documents or processes in Nigeria for any purpose other than the receipt of notices and other documents, as matters preliminary to incorporation under this Act.
(2) Any act of the company in contravention of subsection (1) is void.
(3) Nothing in this section affects the status of any foreign company—
(a) which before the commencement of this Act was granted exemption from compliance under the provisions of any preceding Companies Acts that had been applicable in Nigeria before the commencement of this Act ; and
(b) exempted under any treaty to which Nigeria is a party.
Section 79. Penalties
If any foreign company fails to comply with the requirements of section 80 of this Act in so far as they may apply to the company, the company commits an offence and is, in addition to being liable to prosecution, also liable to such penalty as the Commission shall specify by regulation, and every officer or agent of the company who authorises or permits the default or failure to comply is, whether or not the company is also convicted of any offence, liable on conviction to such penalty as the Commission shall specify by regulation, and where the offence is a continuing one, the company and every officer or agent of the company are liable to a further penalty as the Commission shall specify by regulation for every day during which the default continues.
Section 80. Power to exempt foreign companies
(1) A foreign company may apply to the Minister for exemption from the provisions of section 78 of this Act if that foreign company belongs to one of the following categories, that is—
(a) foreign companies other than those specified in paragraph ( to Nigeria by or with the approval of the Federal Government to execute any specified individual project ;
(b) foreign companies which are in Nigeria for the execution of specific individual loan projects on behalf of a donor country or international organisation ;
(c) foreign government-owned companies engaged solely in export promotion activities ; and
(d) engineering consultants and technical experts engaged on any individual specialist project under contract with any of the governments in the Federation or any of their agencies or with any other body or person, where such contract has been approved by the Federal Government.
(2) An application for exemption under this section shall be in writing addressed to the Minister and shall set out—
(a) the name and place of business of the foreign company outside Nigeria ;
(b) the name and place of business or the proposed name and place of business of the foreign company in Nigeria ;
(c) the name and address of each director, partner or other principal officer of the foreign company ;
(d) a certified copy of the charter, statutes, or memorandum and articles of association of the company, or other instrument constituting or defining the constitution of the company and if the instrument is not written in the English language, a certified translation thereof ;
(e) the names and addresses of one or more persons resident in Nigeria authorised to accept, on behalf of the foreign company, service of processes and any notice required to be served on the company ; (f ) the business or proposed business in Nigeria of the foreign company and the duration of such business ;
(g) particulars of any project previously carried out by the company as an exempted foreign company ; and
(h) such other particulars as may be required by the Minister or Secretary to the Government of the Federation.
(3) Where the Minister, upon the receipt of an application for exemption, is of the opinion that the circumstances are such as to render it expedient that such an exemption should be granted, the Minister, subject to such conditions as he may prescribe, exempt the foreign company from the obligations imposed by or under this Act.
(4) Every exemption granted under this section shall specify the period or, as the case may be, the project or series of projects, for which it is granted and shall lapse at the end of such period or upon the completion of such project or series of projects.
(5) The Minister may at any time revoke any exemption granted to any company if he is of the opinion that the company has contravened any provision of this Act or has failed to meet any condition contained in the exemption order or for any other good or sufficient reason.
(6) The Minister shall cause to be published in the Federal Government Gazette the name of any company—
(a) to which an exemption has been granted and the period or, as the case may be, the project or series of projects for which the exemption is granted ; and
(b) which exemption has been revoked and the effective date of such revocation.
(7) Every exempted company shall deliver to the Commission upon payment of a prescribed fee a notice of its exemption within 30 days of the grant of such exemption.
(8) If an exempted company fails to comply with the provisions of subsection (7), it is liable to such penalty as the Commission shall specify by regulation for every day during which the default continues.
Section 81. Annual report
(1) Every exempted foreign company shall deliver to the Commission, in every calendar year, a report in the form prescribed by the Commission.
(2) An exempted foreign company that fails to comply with the provisions of subsection (1), is liable to such penalty as the Commission shall specify by regulation, for every year of default.
Section 82. Exempted foreign company to have status of unregistered company
Subject to this Act and save as may be stated in the instrument of exemption, a foreign company exempted pursuant to this Act shall have the status of an unregistered company and accordingly, the provisions of this Act applicable to an unregistered company shall apply in relation to such an exempted company as they apply in relation to an unregistered company under this Act.
Section 83. Penalties for false information
(1) A person who, for the purpose of obtaining an exemption or of complying with any of the provisions of section 80 of this Act, makes any statement or presents any instrument which is false commits an offence unless he proves that he has taken all reasonable steps to ascertain the truth of the statement made or contained in the instrument so presented.
(2) Any person who contravenes subsection (1) commits an offence under this section is liable on conviction to a fine or imprisonment as the Court deems fit.
Section 84. Application of certain sections to foreign companies
Except as provided under sections 80, 81 and 82 of this Act—
(a) nothing shall be construed as authorising the disregard by any exempted foreign company of any enactment or rule of law ; and
(b) nothing in this Chapter shall be construed as affecting the rights or liability of a foreign company to sue or be sued in its name or in the name of its agent.
What this means
Short answer
A foreign company that intends to carry on business in Nigeria must first be incorporated here as a separate entity. Until it is, it must not carry on business, and acts done in breach are void (section 78). The Minister can exempt certain project-based foreign companies (section 80).
The incorporation rule
Under section 78(1), every foreign company that has, before or after the Act began, been incorporated outside Nigeria and intends to carry on business in Nigeria must take all steps needed to obtain incorporation here as a separate entity. Until then, it must not carry on business or exercise the powers of a registered company, and must not have a place of business or an address for service of documents in Nigeria except to receive notices as a preliminary to incorporation. Any act in contravention is void (section 78(2)). Companies already exempted under earlier Companies Acts or under a treaty to which Nigeria is a party keep their status (section 78(3)).
A foreign company that breaks the requirements commits an offence. It and any officer or agent who authorises or permits the default are liable to penalties set by the Commission, with a further daily penalty while the default continues (section 79).
Who can be exempted
A foreign company can apply to the Minister for exemption if it belongs to one of these categories (section 80(1)):
- a company invited to Nigeria by or with the approval of the Federal Government to execute a specified individual project;
- a company in Nigeria to execute a specific loan project for a donor country or international organisation;
- a foreign government-owned company engaged solely in export promotion; and
- engineering consultants and technical experts on a specialist project under a contract with a government in the Federation or its agency, or with another body or person, that the Federal Government has approved.
The application is in writing and gives the company’s name and place of business abroad and in Nigeria, the names and addresses of its directors or principal officers, a certified copy (and certified English translation if needed) of its constitution, the names and addresses of people in Nigeria authorised to accept service, the business and its duration, and details of earlier exempted projects (section 80(2)).
After exemption
- The exemption states the period, or the project or series of projects, it covers, and lapses at the end of that period or on completion (section 80(4)). The Minister can revoke it, and the Gazette publishes grants and revocations (section 80(5) and (6)).
- The company delivers a notice of its exemption to the Commission within 30 days of the grant, with the prescribed fee (section 80(7)).
- It delivers an annual report to the Commission in every calendar year (section 81).
- It has the status of an unregistered company (section 82), and exemption does not authorise disregarding any other law (section 84).
- Giving false information to obtain an exemption is an offence unless the person took all reasonable steps to check it. The penalty is a fine or imprisonment as the court decides (section 83).
Questions and answers
Can a foreign company carry on business in Nigeria without incorporating here?
No, unless it is exempted. It must first obtain incorporation as a separate entity in Nigeria, and acts done in breach are void (section 78).
Who can be exempted from incorporating in Nigeria?
Companies invited for a Federal Government project, donor or international-organisation loan projects, foreign government-owned export promotion companies, and approved engineering consultants and technical experts on specialist projects (section 80(1)).
How long does an exemption last?
For the period, or the project or projects, stated in the exemption, after which it lapses (section 80(4)).
What must an exempted foreign company file?
A notice of exemption within 30 days of the grant and an annual report each calendar year (sections 80(7) and 81).
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