Arbitration is a process where parties to a dispute agree to submit their dispute to one or more neutral third parties, known as arbitrators, who render a binding decision on the matter. This method is distinct from other ADR forms, such as mediation or conciliation, in that the arbitrator’s decision is typically final and enforceable, similar to a court judgment. The consensual nature of this approach allows parties to tailor the process to their specific needs, selecting arbitrators with relevant expertise and determining procedural rules that best suit the context of their dispute.

The advantages of using Alternative Dispute Resolution in Commercial disputes provides confidentiality, expertise, flexibility and autonomy, enforceability, cost and time efficiency.

Regulatory Framework in Nigeria.

Nigeria has established a comprehensive regulatory framework for private dispute resolution, notably through the Arbitration and Mediation Act 2023 (the Act). This legislation modernizes and consolidates the country’s approach to alternative dispute resolution, aligning it with international standards and best practices.

Key Features of the Arbitration and Mediation Act 2023:

1. Unified Legal Framework: The Act creates a unified pathway for resolving conflicts via private mechanisms, promoting fair and efficient outcomes in commercial matters.
2. Mandatory Stay of Court Proceedings: Courts are now mandated to halt proceedings and refer parties to dispute resolution when a valid agreement exists, unless the agreement is deemed void, inoperative, or incapable of being performed.
3. Third-Party Funding: The Act explicitly permits third-party funding, addressing previous uncertainties and enhancing access to justice. This arrangement involves a funder who has no prior interest in an investment or commercial dispute, providing financial support to one of the parties engaged in the dispute resolution, in return for a share of the eventual proceeds of the award, if any.
4. Award Review Tribunal: This innovative provision allows parties to opt for an Award Review Tribunal to review arbitral awards, providing an additional layer of scrutiny before resorting to court intervention.
5. Interim Measures: The Act empowers both arbitral tribunals and national courts to grant interim relief to protect parties’ interests during dispute resolution. Interim measures issued by arbitral tribunals are enforceable by the courts, strengthening the process’s effectiveness. Examples of Interim measures include injunctions, security for costs, preservation of assets.
6. Arbitrator Immunity: The Act grants immunity to arbitrators, appointing authorities, and arbitral institutions, except in cases of bad faith, promoting impartiality and independence.
7. Electronic Communications: Agreements can now be validly made through electronic communications, broadening the scope of acceptable forms for such agreements.

These provisions collectively enhance Nigeria’s alternative dispute resolution landscape, making it more attractive for both domestic and international commercial disputes. The Act’s alignment with global standards underscores Nigeria’s commitment to providing a robust and efficient dispute resolution mechanism.

Reasons Why Parties Should Choose Arbitration

This method offers several compelling advantages over traditional litigation, making it an attractive option for resolving commercial disputes:

1. Confidentiality: Proceedings are conducted in private, ensuring that sensitive business information remains confidential. This privacy helps protect trade secrets and maintain reputations.
2. Expertise of Arbitrators: Parties can select arbitrators with specialized knowledge relevant to their industry or the specific issues at hand, leading to more informed and appropriate decisions.
3. Flexibility and Control: The process can be customized to fit the parties’ preferences, ranging from the procedural rules and timelines to the venue of hearings.
4. Enforceability of Awards: Arbitral awards are generally easier to enforce internationally compared to court judgments. Nigeria is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which means that awards obtained abroad can be enforced in Nigeria.
5. Cost and Time Efficiency: This mechanism is often quicker and less expensive than court litigation. . The streamlined procedures and limited discovery processes often result in faster resolutions, reducing legal fees and associated costs. For example, a typical court case in Nigeria can take 4 to 10 years to conclude, depending on the complexity of the case and the jurisdiction, with some cases taking even longer.
6. Neutral Forum: In international disputes, it offers a neutral venue, which can alleviate concerns about potential biases in a foreign court system. This neutrality fosters fairness and can be pivotal in disputes involving parties from different countries.

The Arbitration Process in Nigeria

To effectively utilize this method of dispute resolution, it’s essential for parties to include clear and comprehensive dispute resolution clauses in their commercial agreements. These clauses serve as a mutual commitment to resolve potential disputes handle potential disagreements outside the courtroom.

The process typically unfolds in the following stages:

1. Commencement: The process begins when a party submits a “Notice of Arbitration” or “Demand for Arbitration,” outlining the dispute and the relief sought. This notice is sent to the opposing party and where applicable, to the designated dispute resolution institution.
2. Selection of Arbitrator(s): Depending on the clause in the agreement, parties select one or more arbitrators based on criteria such as expertise, neutrality, and availability. Selection can be by mutual consent or through institutions such as the Nigerian Institute of Chartered Arbitrators (NICArb), Lagos Court of Arbitration, International Centre for Arbitration and ADR, Maritime Arbitrators Association of Nigeria, or the Lagos Chamber of Commerce International Arbitration Centre. etc.
3. Preliminary Hearing and Scheduling: Once appointed, the arbitrator(s) conduct a preliminary hearing to discuss procedural matters, including timelines, discovery processes, and the scheduling of hearings. This stage ensures that both parties understand the procedures and have an opportunity to present their case adequately.
4. Exchange of Information (Discovery): Parties exchange relevant documents and information pertinent to the dispute. Although this stage is usually more concise than in court proceedings, it still allows for meaningful disclosure to support the hearing.
5. Hearing: During the hearing, both parties present their evidence and argument through their skilled lawyers. This may include witness testimonies, expert reports, and documentary evidence. Hearings can be conducted in person, via video conference, or through written submissions, depending on the agreement and circumstances.
6. Deliberation and Award: After the hearing, the arbitrator(s) deliberate and issue a written decision, known as an award. This award is binding on the parties and enforceable in courts, subject to limited grounds for challenge.

Throughout the dispute resolution process, parties maintain control over various aspects, such as selecting arbitrators and tailoring procedures to fit the specific needs of their dispute. This flexibility, combined with the binding nature of arbitral awards, makes this method a valuable tool for resolving commercial disputes efficiently and effectively.

Parties’ Role in the Arbitration Process

In resolving disputes outside the courtroom, the disputing parties play a central and proactive role, exercising significant control over various aspects of the process. Their key responsibilities and rights include:

1. Initiating the Process: A party seeking to begin proceedings must file a “Notice of Arbitration” or “Demand for Arbitration,” formally initiating the proceedings and outlining the dispute and desired remedies.
2. Selecting Arbitrators: Parties have the autonomy to choose arbitrators with relevant expertise and impartiality, ensuring a knowledgeable and unbiased tribunal.
3. Determining Procedural Rules: Through mutual agreement, parties can establish the rules governing the proceedings, including timelines, confidentiality measures, and specific procedures, tailoring the process to their specific needs.
4. Presenting Evidence and Arguments: Parties through their lawyers are responsible for presenting their case, including submitting evidence, calling witnesses, and making legal arguments to support their positions.
5. Maintaining Confidentiality: Given that this form of dispute resolution is a private process, parties are expected to uphold the confidentiality of the proceedings, safeguarding sensitive information and the integrity of the process.
6. Complying with the Arbitral Award: Once a decision is rendered, parties are obligated to adhere to the terms of the arbitral award, which is binding and enforceable. It can be contested on specific grounds including misconduct, fraud or error in judgement.

By actively engaging in these roles, parties can ensure a fair, efficient, and tailored resolution to their commercial disputes.

Contract Clauses and Pending Court Proceedings

When a commercial contract includes an alternative dispute resolution clause specifying that disputes should be resolved through a private adjudication process, and a party initiates court proceedings instead, the legal framework provides mechanisms to address this situation.

Under the Arbitration and Mediation Act 2023 (AMA), if a lawsuit is filed concerning a matter covered by such an agreement, the defendant can request the court to refer the parties to the agreed procedure. Section 5(1) of the AMA mandates that courts must redirect the matter unless the agreement is found to be “null and void, inoperative, or incapable of being performed.” This provision underscores the judiciary’s commitment to upholding parties’ agreements to arbitrate disputes.

To enforce the private dispute resolution clause, the defendant should promptly file an application for a stay of proceedings before submitting any pleadings or taking further steps in the court process. Timeliness is crucial; any delay or participation in the court proceedings may be interpreted as a waiver of the right to arbitrate. The court, upon receiving such an application, is obligated to halt its proceedings and direct the parties to follow the agreed path,  provided the agreement is valid and applicable to the dispute at hand.

The enactment of the AMA has further solidified the legal framework supporting private dispute resolution in Nigeria. By aligning with international standards, the AMA enhances the enforceability of such agreements and awards, providing parties with greater confidence in choosing this method as their preferred dispute resolution mechanism.

Conclusion

Arbitration plays a crucial role in resolving commercial disputes by offering parties a flexible, efficient, and enforceable alternative to litigation. As an ADR mechanism, it provides confidentiality, expert decision-making, international enforceability and cost-effectiveness, making it a preferred choice for businesses seeking to protect their commercial interests.

By including well-drafted dispute resolution clauses in commercial agreements, parties can ensure that disputes are resolved in a structured manner, avoiding the delays, costs and uncertainties of court litigation.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

In Nigeria, it is possible to apply for the cancellation of a registered trademark based on any of the grounds provided by law and upon satisfaction of some conditions as outlined by the Nigerian Industrial Property Office (NIPO). The main grounds for applying to revoke a trademark in Nigeria are usually for non-use and non-renewal of the trademark.

Section 31(1) of the Trademarks Act of Nigeria, 2004 (the Act) states that a registered trademark can be removed from the Register of Trademarks in relation to specific goods for which it is registered. This removal can be initiated through an application made by any person who establishes sufficient interest to the satisfaction of the Registrar or the court. The Act stipulates various grounds for applying to the Registrar of Trademarks for the removal of a registered trademark.

Grounds for Revocation of a Trademark in Nigeria

The grounds for removal of a registered trademark include non-use, non-renewal, failure to observe a condition precedent, where the registration was obtained by fraud, etc.

1. Non-use:

   The Act allows a trademark to be revoked if it has not been used. One ground for cancellation is when the trademark was registered without any genuine intention to use it. In this case, no real use of the trademark should have occurred up to one month before the revocation application.

   The person seeking revocation must prove that the owner never intended to use the trademark and that it has not been used during that time.

   Another ground for removal is when the trademark has not been used for a continuous period of at least five years, up to one month before the application date. Even if there was an initial genuine intention to use the mark, it can still be revoked if it remains unused for five years and one month in relation to the registered goods or services.

Exceptions to Revocation on the Ground of Non-Use

The Act provides for exceptions or defenses to the cancellation of trademarks on the ground of non-use.

1. Bona fide Use:

   If the trademark has been used in good faith by the proprietor for the goods it is registered for, it is exempt from removal due to non-use. This use must fall within the relevant period before a revocation application can be made.

   However, this exemption does not apply if the applicant seeking revocation has been allowed under Section 13(2) of the Act to register an identical or similar mark for the goods, or if the tribunal permits such registration despite prior use.

2. Special Circumstances:

   Special circumstances that prevented the proprietor from using the trademark also protect against revocation for non-use. Non-use caused by factors beyond the proprietor’s control, rather than an intentional decision to abandon the trademark, is a valid defense.

   For example, if a government ban restricts an industry such as cryptocurrency, the trademark for that business may be unusable during the ban. This situation is considered a valid exception since the trademark was not deliberately abandoned.

3. Protection for Well-Known Marks:

   Well-known trademarks registered across various goods classes cannot be revoked for non-use in Nigeria because of their popular status. This protection applies even if the mark isn’t used for all registered classes.

   A highly popular mark may be exempt from removal if the proprietor applies and the Registry acknowledges it as a well-known mark. This ensures genuine trademark rights are preserved fairly.

4. Failure to Observe a Condition Precedent:

   A registered trademark can be revoked if it is shown that the proprietor of the relevant mark or goods failed to comply or observe a condition precedent in relation to the trademark.

   In defense, a proprietor can provide evidence of compliance or fulfilment of the stipulated conditions to avoid removal of the trademark.

5. Non-Renewal of Trademark:

   The registration of a trademark in the Register of Trademarks does not guarantee perpetual protection of the mark. Registration is valid for an initial period of seven years in Nigeria, with the possibility of renewal for subsequent fourteen-year periods.

   The non-renewal of an expired trademark may lead to the cancellation of the mark upon the application of an interested party.

   A defense to an alleged non-renewal is proof that the Registrar did not issue the required statutory notice for renewal.

Other grounds for removal include giving inaccurate or misleading information regarding a trademark when obtaining or maintaining a trademark registration, where the trademark registration was obtained by fraud, where the trademark is likely to cause confusion, where it is scandalous or contrary to law and morality and where the trademark is found to be infringing on the rights of another party.

Procedure for Revocation of a Trademark in Nigeria

An application for the cancellation of a trademark in Nigeria can be made to either the Registrar of Trademarks or to the Federal High Court.

Where it is made to the Registrar, it shall be in the prescribed form and accompanied by a statement of the applicant’s interest, relevant facts upon which the case is founded, and reliefs sought.

Where the applicant is not the registered proprietor of the trademark in question, copies of the application will be provided by the applicant and sent by the Registrar to the registered proprietor.

The defendant is entitled to file a Counter-Statement or Defense to the applicant’s claims. The applicant may file a Reply if necessary.

In revocation proceedings before the Registrar, evidence is typically provided through statutory declarations unless the Registrar directs otherwise. In any case where the Registrar thinks it right to do so, he may take oral testimony instead of or in addition to evidence by statutory declaration.

After reviewing the evidence, the Registrar will determine the question between parties, subject to appeal to the Federal High Court. It is important to note that the Registrar may at any stage of the proceedings refer the application for cancellation to the court.

An application for removal is made to the Federal High Court in the prescribed form where a matter is pending before the court regarding a particular trademark. An appeal from a decision on removal of trademark by the Registrar lies firstly with the Federal High Court, then with the Court of Appeal and finally with the Supreme Court.

In the case of non-renewal of trademark, the Registrar may revoke an expired trademark where the proprietor fails to pay the renewal fee prior to the expiration date or fails to pay the renewal fee with the appropriate surcharge after the expiration date, after the necessary notice of impending expiration has been sent by the Registrar.

The Registrar is statutorily required to notify the registered proprietor of the trademark of the impending expiration not less than one month and not more than two months to the expiration date in the first instance and not less than 14 days but not more than one month to the expiration date in the second instance.

Where the proprietor fails to pay the necessary fee before the expiration date, the Registrar shall advertise the expiration of the trademark in the Trademarks Journal and shall be free to remove the trademark from the Register where the proprietor fails to pay the renewal fee with any surcharge for late renewal within one month after the advertisement.

Conclusion

Nigerian law allows for cancellation of trademark on a variety of grounds. These include non-use, non-renewal, obtaining registration by fraud, etc. An application for revocation can be made by an interested party to the Registrar of Trademarks or to the Federal High Court.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

Significant judicial decisions were also delivered by the courts which shaped the tax and gaming landscapes in Nigeria. This legal recap is divided into four parts representing the four quarters of the year, highlighting what we think are the most impactful laws and regulations, reforms, and judicial decisions in 2024.

Q1 2024 Legal Recap: Key Developments in Nigerian Law (January – March)

As part of this Legal Recap, it is important to note that forex policy reforms were implemented by the Central Bank of Nigeria (CBN) with the aim of stabilizing the Naira, fostering economic growth and the provision of agricultural funding to support food production.

Financial policy and regulations were revised by the CBN to ensure the financial industry players operate within a well-regulated environment ensuring the integrity of the financial services sector.

• On 5 January 2024, the Supreme Court of Nigeria delivered a judgment in the case of National Inland Waterways Authority (NIWA) v. The Lagos State Waterways Authority (LASWA).
  The Supreme Court reaffirmed the power of the Federal Government through the National Inland Waterways Authority (NIWA) to control the activities on the country’s waterways.
  The decision of the court settled the dispute between NIWA and Lagos State over the appropriate party with regulatory rights over the country’s waterways with the decision of the court in favour of NIWA.
• On 18 January 2024, the National Agency for Food and Drug Administration and Control (NAFDAC) launched the Narcotic Drugs Serializations Pilot Project, in a bid to strengthen the quality and security of medical products in the country’s drug distribution network.
  NAFDAC disclosed that the initiative was aimed at combatting the proliferation of substandard and falsified medicines by implementing a traceability system, addressing challenges posed by unscrupulous elements in the pharmaceutical supply chain.

• On 29 January 2024, the CBN issued the Financial Market Price Transparency circular requiring all Authorized Dealers that the CBN has permitted financial markets transactions to be conducted on a ‘’willing buyer will seller’’ basis.

  The CBN therefore expects prices to be quoted and displayed in a transparent manner.

• On 31 January 2024, the CBN issued the Reviewed Guidelines on International Money Transfer Services in Nigeria. The Guidelines stipulate the regulatory requirements that must be met to process and obtain license to provide international money transfer services in Nigeria.
  The Guidelines revised upward the application fees, capital requirements, etc.
• On 31 January 2024, the CBN issued the Harmonising of Reporting Requirements on Foreign Currency Exposure of Banks to address the growth in foreign currency exposures of banks through their Net Open Position (NOP).
  Therefore, to ensure the risks are well managed and avoid losses, the CBN issued the guidelines to address it.
• On 2 February 2024, the CBN issued the Cash Reserve Requirement Framework Implementation Guidelines which stated the implementation of a significant policy change by revising the Cash Reserve Ratio (CRR) framework.

  This update included a reduction in the Loan-to-Deposit Ratio (LDR) compliance requirement from 65% to 50%, aiming to address lending shortfalls among deposit money banks. The revised framework requires banks falling short of this new LDR threshold to allocate 50% of the shortfall as part of their CRR with the CBN.

• On 27 March 2024, the Nigerian president issued a directive titled Implementation of a Single-Digit Tax System which aims to streamline Nigeria’s tax structure by reducing the number of taxes to a maximum of nine.
  This initiative seeks to simplify the tax code, alleviate the tax burden, and foster a more business-friendly environment. The directive will take effect following the completion of the Presidential Committee on Fiscal Policy and Tax Reforms’ work.

• On 28 March 2024 the CBN issued the Review of Minimum Capital Requirements for Commercial, Merchants and Non-Interest Banks in Nigeria which stipulated new minimum capital requirements for banks. It sets the minimum capital base for commercial banks with international authorization at N500 billion.

  The minimum capital base for commercial banks with national authorization is now N200 billion, while the requirement for those with regional authorization is N50 billion.
  Merchant banks are required to have a minimum capital base of N50 billion, while non-interest banks with national and regional authorizations must meet minimum requirements of N20 billion and N10 billion, respectively.

  All banks are required to meet these requirements within 24 months starting from 1 April 2024 and ending on 31 March 2026.

Q2 Legal Recap: Nigeria Regulatory Developments (April – June 2024)

The second quarter of this Legal Recap highlights continued legislative activity, particularly around fintech and digital assets. The Central Bank of Nigeria (CBN) issued revised guidelines for International Money Transfer Operators (IMTOs), while the Securities and Exchange Commission (SEC) proposed new rules for virtual asset service providers.

The Student Loans Access to Higher Education (Repeal and Re-enactment) Bill, 2024 was enacted.
The Cybersecurity levy was set for implementation by the CBN but was eventually suspended due to public outcry over the announcement and the proposed implementation of the levy.

The electricity market is also gradually being deregulated by states with some states receiving the approval of the NERC to regulate electricity market within their respective states.

• On 3 April 2024, the Nigerian president signed the Student Loans Access to Higher Education (Repeal and Re-enactment) Bill, 2024 into law. This revised legislation aims to provide financial assistance to indigent Nigerian students by offering interest-free loans through the Nigerian Education Loan Fund.
  The law is intended to promote accessible higher education and functional skill development for students across the country.
• On 22^nd April 2024, the Federal Government launched a ₦200 billion Intervention Fund Aimed at Supporting Micro, Small, and Medium Enterprises (MSMEs) and Manufacturers.
  This initiative, introduced by the Bank of Industry, is designed to stimulate local production, reduce import dependency, and enhance Nigeria’s industrial growth.

  Eligible businesses can access loans under favourable terms, including single-digit interest rates and flexible repayment conditions, to improve capacity, expand operations, and create jobs.

• On 2 May 2024, the Federal Inland Revenue Service (FIRS) issued a directive titled Implementation of Stamp Duty on Mortgage-Backed Loans and Bonds. The Nigerian government directed banks to deduct stamp duty charges on mortgages. This directive is aimed at improving revenue generation from the stamp duty on financial transactions.
  The charge is applicable to all mortgage transactions and is expected to support government revenue collection.
  It introduced a 0.375% stamp duty on mortgage-backed bonds. This charge applies to various types of mortgage and legal instruments as specified under the Stamp Duties Act (SDA).
• On 6 May 2024, the CBN issued the Cybercrimes (Prohibition, Prevention, etc) (Amendment) Act 2024 – Implementation Guidance on the Collection and Remittance of the National Cybersecurity Levy. The Guidance required the deduction of 0.5% cybersecurity levy on all electronic transactions.
  The Guidance exempted certain transactions including loan disbursements and repayment, salary payments, letters of credits, cheques clearing and settlement, etc.
  The implementation of the Guidance has now been temporarily suspended following protests by the public.
• On 7 May 2024, the Corporate Affairs Commission (CAC) issued a public notice titled CAC and Fintech Operators which mandated all Point of Sale (POS) operators in Nigeria to complete their business registration with the CAC by 7 July 2024 which was eventually extended by 60 days to 5 September 2024.
  This directive by the CAC aligned with the Companies and Allied Matters Act (CAMA) 2020 and the Central Bank of Nigeria’s (CBN) agent banking guidelines which aim to safeguard the operations of FinTechs, improve accountability, and strengthen the economy.
• On 22 May 2024, the CBN issued the Revised Regulatory and Supervisory Guidelines for Bureau De Change Operations in Nigeria. The Guidelines required existing Bureau De Change (BDC) operators to re-apply for a new license in accordance with any of the license categories and meet the minimum capital requirements within six months.
  New applicants are also required to comply with the Guidelines which supersedes the Revised Operational Guidelines for Bureau De Change in Nigeria dated November 2015.
  It also categorizes BDC license into tier 1 with permission to operate in any state and tier 2 with permission to operate in only one state.

• On 14 June 2024, the SEC issued a circular titled Implementation of Enterprise Risk Management. It provides that all Capital Market Operators (CMOs) are required to implement an Enterprise Risk Management (ERM) framework that conforms to international standards such as the Committee of Sponsoring Organizations of the Treadway Commission (COSO), the International Organization for Standardization (ISO 31000),

  Financial Action Task Force (FATF) Recommendations and any other internationally recognized risk management standards.

  The adoption of comprehensive risk management practices is important in minimizing systemic impact and safeguarding the interests of all stakeholders.

• On 24 June 2024, The Securities and Exchange Commission released a circular titled Revamped E-Dividend Mandate Management System Portal which launched the revamped e-Dividend Mandate Management System (e-DMMS) Portal.
  This is noted to be an important step towards curbing the growth of unclaimed dividend and generally improving investor experience in the Nigerian Capital market.

  The revamped e-DMMS Portal introduces a “self-service interface” that allows investors apply to mandate their accounts for e-dividend virtually, without having to visit a Registrar or a Bank.

• On 28 June 2024, the Nigerian president signed an executive order eliminating tariffs, excise duties, and VAT on imported pharmaceutical inputs. This is part of a broader initiative to support local drug manufacturers and improve the availability of essential medicines in Nigeria.
  The executive order is intended to make local pharmaceutical producers more competitive by reducing costs, thereby ensuring more affordable healthcare for Nigerians.

Q3 2024 Legal Recap (July – September 2024)

This Nigeria Legal Recap for Q3 reflects a dynamic policy environment. The CBN, SEC and NCC were all very active as they issued regulations and initiated reforms applicable to operators in the various sectors which they regulate.

The Federal Government introduced the Deduction of Tax at Source Regulations 2024, aligning with the National Tax Policy and exempting certain sectors like telecommunications. Significant judicial decisions were also handed down as in the case of the Federal High Court allowing companies to have single shareholder regardless of the incorporation date.

• On July 2024, some states including Imo, Enugu, Ekiti, and Ondo received the approval of the Nigerian Electricity Regulatory Commission (NERC) to regulate their electricity markets in line with the provisions of the Electricity Act, 2023. This allows the states to oversee power generation, transmission, and distribution within their jurisdictions, marking a significant step towards decentralizing electricity regulation in Nigeria.
• On 11 July 2024, the Supreme Court of Nigeria delivered judgment in the case between the Attorney General of the Federation v. Attorney General of Abia State & 35 Others. This landmark decision reinforced the financial autonomy of local governments, declaring it unconstitutional for state governors to withhold funds allocated to local governments, dissolve local government councils, or appoint caretaker committees. The court mandated that funds meant for local governments be paid directly into their accounts, ensuring their independence and strengthening democratic governance at the grassroots level.
• On 19 July 2024, the CBN issued the Guidelines on Management of Dormant Accounts, Unclaimed Balances and Other Financial Assets in Banks and Other Financial Institutions in Nigeria. The Guidelines revised the 2015 guidelines on the subject matter. The Guidelines aim to reunite beneficial owners with unclaimed balances and financial assets, holding funds in trust for beneficial owners, etc. It also states the roles of key stakeholders including the CBN, Nigeria Deposit Insurance Commission (NDIC), financial institutions, account owners and beneficial owners, etc.
• The Nigerian Communications (Consumer Code of Practice) Regulations, 2024 with a commencement date of 29 July 2024 was issued by the Nigerian Communications Commission (NCC). The Regulations aim to prescribe the procedures to be followed by licensees in determining the contents and features of a consumer code of practice and preparing same for approval.
• The NCC issued the Nigerian Communications (Type Approval) Regulations, 2024 with a commencement date of 29 July 2024. The regulations apply to every person providing communication services, manufactures or supplies communications equipment. It also prescribes the processes for the type of approval of communications equipment and identify applicable technical standards while ensuring that communications equipment used in communications networks are safe and do not compromise national security.
• On 29 July 2024, the Nigerian president signed the National Minimum Wage Act 2019 (Amendment) Bill into law, raising Nigeria’s national minimum wage from ₦30,000 to ₦70,000 per month, following extensive negotiations between the Federal Government, labour unions, and the private sector.
• On 30 July 2024, the Federal High Court ruled in Primetech Design and Engineering Nigeria Limited v. The Corporate Affairs Commission (CAC) in favour of allowing all private companies in Nigeria regardless of their incorporation date, to have a single shareholder under the Companies and Allied Matters Act 2020 (CAMA 2020).
  This decision clarifies that section 18(2) of CAMA 2020 applies universally to both new and older private companies. Previously, there was uncertainty about whether this provision applied only to companies incorporated before the enactment of CAMA 2020.
  The ruling is significant as it removes restrictions on private companies transitioning to a single shareholder structure without the risk of being wound up by the regulator, offering greater flexibility for business growth.
• On 2 September 2024, the Nigerian Investment Promotion Commission (NIPC) Revised Service Fee Schedule for Business Registration and Pioneer Status Incentives (PSI) Applications. This increased the fees for applying for business registration and obtaining pioneer status incentives, conducting due diligence, introduced an annual business registration renewal fee, etc.
• On 3 September 2024, the Securities and Exchange Commission (SEC) introduced an electronic filing system to improve the efficiency of the Nigerian capital market. This system aims to reduce listing time for securities and enhance liquidity, enabling quicker access to capital for companies. This is expected to streamline approvals, increase transparency, boost investors’ confidence, and ultimately contributing to the growth of the Nigerian economy.
• On 30 September 2024, the Federal Government introduced the Deduction of Tax at Source (Withholding) Regulations, 2024 which was published in the official gazette and followed by a public notice issued by the FIRS on 2^nd October 2024. These regulations, set to take effect on 1 January 2025 exempt items such as telephone charges, internet data, airline tickets, and out-of-pocket supplier expenses from withholding tax, aligning with the National Tax Policy.

Q4 2024 Legal Recap (October – December 2024)

As the year concluded, this Legal Recap of 2024 observed a series of landmark judicial decisions, regulatory developments, and advancements in Nigeria’s economic and financial landscape.
Landmark court decisions signalling a shift toward greater accountability and adherence to the rule of law. Regulatory agencies introduced policies aimed at fostering transparency. These developments collectively highlight Nigeria’s strides toward modernization, sustainable growth, and global competitiveness.

• On 2^nd October 2024, the Federal High Court sitting in Abuja ruled in the case between Abubakar Marshal v. Vehicle Inspection Officers (VIO) that VIOs lack statutory authority to stop private vehicles, demand roadworthiness certificates, impound vehicles, or impose fines on motorists. The court clarified that the requirement for roadworthiness certificates applies exclusively to commercial vehicles under existing laws. The court described the actions of the VIOs, including the imposition of fines and confiscation of private vehicles as oppressive, unlawful, and without legal foundation.
• Value Added Tax Modification Order 2024 and Notice of Tax Incentives for Deep Offshore Oil & Gas Production in accordance with the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024 were issued by the Federal Government. The VAT Modification Order 2024 exempts energy products including diesel, LPG, CNG and clean energy infrastructures from VAT while the Notice of Tax Incentives introduces new tax reliefs to attract investments into Nigeria’s deep offshore Oil & Gas projects.
• On 3 October 2024, the Federal Inland Revenue Service (FIRS) issued a public notice notifying taxpayers that The Deduction of Tax at Source Withholding (WHT) Regulations, 2024 would take effect from 1^st January 2025 ending the current withholding tax regime contained in the Companies Income Tax Act.
• The FIRS launched an Unstructured Supplementary Service Data (USSD) Code on 9 October 2024 for the purpose of improving taxpayers’ satisfaction. The USSD enables taxpayers to retrieve their Taxpayers Identification Number (TIN) verify Tax Clearance Certificate (TCC), etc.
• On 7 October 2024, the Federal High Court, Lagos struck out the suit commenced by the Manufacturers Association of Nigeria (MAN) v. National Electricity Regulatory Commission (NERC) & 11 Others which challenged the implementation of electricity tariff review on the grounds of the suit being an abuse of court process having not being commenced in accordance with due process and no disclosure of reasonable cause of action.
• In October 2024, Moniepoint, a Nigerian FinTech startup became a unicorn by getting a $1 billion valuation after raising $110 million in Series C funding which highlights the rapid growth and importance of FinTech payment providers in Nigeria.
  In November 2024, the Federal Government announced its plan to establish a national data bank to serve as a centralized platform for the collection, analysis and dissemination of transport-related data for the purpose of informed decision-making and policy formulation.
• On 15 November 2024, the Supreme Court of Nigeria declined to declare the Economic and Financial Crimes Commission (EFCC), Nigerian Financial Intelligence Unit (NFIU) and Independent Corrupt Practices and Other related offences Commission (ICPC) as illegal and unconstitutional in the suit between Attorney General of Kogi State & 18 Ors v. Attorney General of Federation suit No: SC/CV/178/2023).

• On 22 November 2024, the Supreme Court of Nigeria in the case between Lagos State Government & Ors v. Attorney General of Federation & Anor suit No SC/1/2008 nullified the National Lottery Act, 2005 and limited its application to only the Federal Capital Territory (FCT). The National Lottery Act, before the decision of the Supreme Court, applied in the entire country to sports betting and lottery licensing.

• On 29 November 2024, the Central Bank of Nigeria (CBN) released Revised Guidelines for The Nigerian Foreign Exchange Market (NFEM), marking a significant overhaul of the country’s FX operations. The new framework consolidates all FX windows, redefines the roles of market participants, and introduces stricter compliance and transparency measures.

  Key provisions address the roles of Authorized Dealers, Bureaux de Change (BDCs), pricing mechanisms, interbank trading, compliance, and reporting standards. The guidelines mandate that all BDC transactions comply with licensing terms and be reported in real time.

  Furthermore, all FX transactions must now be priced through the Electronic Foreign Exchange Matching System (EFEMS), a centralized platform that also publishes daily FX rates for public access, underscoring a strong emphasis on pricing transparency and rigorous reporting requirements.

• On 3 December 2024, the Lagos State Governor signed the Lagos Electricity Bill 2024 into law, marking a significant step toward energy independence for Lagos State. This legislation establishes the Lagos State Electricity Regulatory Commission to oversee the electricity market, regulate power generation, and set tariffs.

  It also created the Lagos State Electrification Agency to promote off-grid solutions and enhance electricity access in underserved areas. Additionally, the bill introduces the Lagos Electrification Fund to finance the state’s grid expansion and off-grid projects with a focus on renewable energy, energy efficiency, and decarbonization.

• On 11 December 2024, the Central Bank of Nigeria (CBN) imposed a fine of ₦1 billion each on Moniepoint and OPay for regulatory non-compliance.
  These penalties were part of the CBN’s routine audits of the activities of FinTechs which identified compliance issues within these companies.
  The fines underscore the CBN’s commitment to enforcing strict regulatory standards in Nigeria’s rapidly expanding digital financial services industry. On 16 December 2024, the Federal Competition and Consumer Protection Commission (FCCPC) rejected Coca-Cola Nigeria Limited’s appeal against a N186 million fine.
  The fine was imposed due to deceptive branding practices, including misleading product descriptions and unfair marketing tactics. The FCCPC’s decision underscores its commitment to protecting consumers and ensuring fair and honest practices in the Nigerian market.
• On 16 December 2024, the Securities and Exchange Commission published the Re-exposure of Amendments to Rules on Digital Assets Issuance, Offering Platforms, Exchange and Custody.
  The proposed amendment is to extend the rules to cover new virtual assets activities and business models such as cross chain transfer services, on/off-chain transmission orders, advisory on virtual assets investment, placing and distribution of virtual assets, etc.

Conclusion: Insights from the 2024 Legal Recap

This legal recap underscores how 2024 shaped the rule of law and business environment in Nigeria. The government introduced impactful rules and regulations including policy changes in areas such as tax, financial services sector, capital markets, electricity, minimum wage, with regulations like the Deduction of Tax at Source (Withholding) Regulations 2024, Lagos Electricity Law 2024 and the National Minimum Wage Act reflecting efforts to improve economic conditions.

The Central Bank of Nigeria, the Securities Exchange Commission and Federal Inland Revenue, the Nigerian Communications Commission, etc. also issued new and amended guidelines and regulations to provide updated regulatory requirements and obligations of players in the regulated industries.

The judiciary also delivered impactful decisions such as the Federal High Court’s ruling on the issue of single shareholder pursuant to the Companies and Allied Matters Act, 2020 and the decision of the Supreme Court nullifying the application of the National Lottery Act in the federating 36 states of the country.  As we approach the new year, we extend our sincere gratitude to all our clients for their continued trust in us and wish you a Merry Christmas and a prosperous New Year 2025.

Please note that the contents of this Article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

This article highlights the requirements, processes and practical considerations to consider when registering imported products with NAFDAC in Nigeria.

Requirements for the Registration of Imported Products with NAFDAC

The requirements for the registration of imported products with NAFDAC will usually include the following:

A. Power of Attorney or Contract Manufacturing Agreement: A power of Attorney is required to authorize a local agent to act on behalf of the foreign manufacturer of the products. The Power of Attorney must be signed by either the Managing Director, General Manager, Chairman or President of the manufacturing company and it should also state the names of the products to be registered. If the foreign manufacturer does not wish to use a local agent, it may set up its own local company in Nigeria in order to register its products in its name, in which case, a Contract Manufacturing Agreement required.

B. Certificate of Manufacture and Free Sale: This is a document that provides evidence that the manufacturer is licensed to manufacture the products in its country of origin and the sale of the products does not contravene the laws of the manufacturer’s own country. It is issued by the relevant health or regulatory authority in the country of manufacture.

C. Comprehensive Certificate of Analysis: The Certificate of Analysis is issued by a quality control laboratory that has evaluated the products to be registered. It must state the brand name and batch number of the products and must also be signed by the laboratory analyst who evaluated the products in the country of manufacture.

D. Certificate of Incorporation: An applicant is expected to submit evidence of company incorporation with the Nigerian Corporate Affairs Commission (CAC). There are two approaches that may be adopted here. The first approach is that a local agent may be engaged and as such the local agent submits its company information and documents to NAFDAC for the product registration. The second approach is that the applicant may incorporate its own local company in Nigeria for the purpose of registering its imported products with NAFDAC.

E. Evidence of Trademark Registration: Trademark registration certificate or acceptance letter issued by the trademark office showing that an application has been made to register the trademark in in Nigeria in the name of the manufacturer.

F. Letter of Invitation for Good Manufacturing Practice: The manufacturer is required to write a letter of invitation addressed to NAFDAC, inviting its officials to visit and inspect the factory of the manufacturer abroad.

G. Labels/artworks: A print out of the label and artwork for the product to be registered is required. There must be a provision for NAFDAC registration number on the label and there must also be provisions for batch number, date of manufacture and expiry date together with other usage and storage instructions.

Product Registration Processes

The imported product registration processes usually involve the application, import permit, laboratory analysis, factory inspection and approval stages.

1. Application

NAFDAC Application form for the product registration is to be obtained and completed with the required information relating to the applicant and the product to be registered. Upon completing the application form, an application letter for the registration of the imported product on the applicant’s letterhead is addressed to NAFDAC. The application letter is to be submitted with the required documents outlined above together with the completed NAFDAC application form.

2. Import Permit

When an application has been successfully submitted and all supporting documents reviewed, an import permit is issued by NAFDAC for the importation of the samples of the product The imported of the sample is to enable NAFDAC conduct laboratory analysis on the products as outlined below. The import permit is usually valid for a period of 12 months. NAFDAC would usually specify how many samples they require.

3. Laboratory Analysis

The imported samples are submitted to NAFDAC laboratory for evaluation. The submission of the samples is accompanied with payment receipt of the official application and processing fee, certificate of analysis and a copy of the import permit. The laboratory analysis may not be successful if the outcome of NAFDAC analysis shows that there are any discrepancies in the information contained in the certificate of analysis. Where this happens, NAFDAC may issue a query for compliance directive. The compliance may involve importing new samples of the products together with an updated certificate of analysis of the products and resubmitting it for a fresh laboratory analysis. This will inevitably affect the times lines for approval discussed below.

4. Factory Inspection

Further to the letter invitation for Good Manufacturing Practice (GMP) and the payment of the required GMP fees, NAFDAC would usually visit the manufacturing facility in the country of origin to inspect it for Good Manufacturing Practice. In practice this visit does not always take place but the fee is still required to be paid.

5. Approval

The application for imported product registration is approved where NAFDAC is satisfied with the documentations provided, the samples provided and the Good Manufacturing Practice of the manufacturer in the country of origin. Upon the approval of the product, notice of registration is issued to the applicant. A unique NAFDAC registration number is also issued to the manufacturer. The registration is valid for 5 years from the date of registration and has to be renewed thereafter for another period of 5 years.

Product Registration Timelines

Depending on the product to be registered, the timelines for registration of imported products could vary between a period of 90 days or 120 days. The timeline is usually 90 days for food products and 120 days for drugs. In practice this is not always possible and registrations have been known to take longer than this due to a combination of factors.

Practical Considerations

In practice, it is not always possible to obtain registration in the timeline stated above. One of the reasons of this is the issuance of compliance directives by NAFDAC. Once a compliance directive is issued by NAFDAC, the clock stops ticking and time begins to count afresh from the period of when the compliance is remedied.  It is immaterial whether or not the compliance was done the same day or a within reasonable period thereafter.

Another possible cause of delay is that upon the submission of samples to NAFDAC, you would have to visit NAFDAC offices several times in person in order to obtain the result of the laboratory analysis as this is not usually communicated by email.

A further factor that may affect the registration is that during the application, the form together with all supporting documents are required to be uploaded online as part of the NAFDAC application process. In practice however, you are also required to submit the hard copies of these documents to NAFDAC offices.

An applicant that decides to register his own local company for the purpose of submitting an application to NAFDAC will have to company with other law relating to company registration in Nigeria including the requirement of obtaining tax registration with the Federal Inland Revenue Services (FIRS) and ensuring that the company is profiled on Taxpro-max for the purpose of validating the company’s profile with NAFDAC. In our experience, this usually takes some time to achieve and may further extend the registration time beyond the timeline provided by NAFDAC for product registration. The company is also required to file its annual returns to the CAC and file its monthly VAT returns whether or not it is trading.

Strike action by NAFDAC officials may sometimes also affect the timelines for the registration of a product with NAFDAC. We have experienced strike action from NAFDAC officials in the past which led to delayed product registration especially at the laboratory analysis stage.

In order to mitigate against most of these factors, it is advisable to ensure that from the outset, you have all your documents, samples, etc. ready and thoroughly reviewed before any application is made. It is also very important to promptly respond to any queries raised by NAFDAC so as to minimize the time between compliance and approval.

Conclusion

NAFDAC is the regulatory agency responsible for the registration of imported food, drugs, cosmetic products and medical devices. Learn more from the NAFDAC official website. The application for imported product registration is made to NAFDAC with the supporting documents and the payment of official fees. NAFDAC approves the application for the product registration upon being satisfied with the applicant’s documentations and Good Manufacturing Practice. In practice however, it is not always possible to register a product within the time frame published by NAFDAC due to a variety of factors which are mostly internal.

Please note that the contents of this Article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com or contact:

The most recent attempt prior to this Act, was the Fifth Alteration (No. 33) Bill 2022 (The Electricity Constitutional Amendment), which was signed in the last days of the previous administration and altered the Constitution of the Federal Republic of Nigeria to empower states to enact laws with respect to the generation, transmission, and distribution of electricity in areas covered by the national grid system within their state.

Overview

The Electricity Act 2023 repeals the Electric Sector Reform Act, 2005. The primary objective of the Act is  to provide a comprehensive legal and institutional framework to guide the operation of a privatized, contract and rule-based competitive electricity market in Nigeria, and to attract private sector investments in the entire power value chain of the Nigerian Electricity Supply Industry (NESI).

Applicability of the Act: The Act applies throughout the country with respect to all aspects and segments of the power sector value chain in Nigeria, but nothing in the Act invalidates any law passed by the House of Assembly of any state with respect to all aspects of generation, transmission, system operation, distribution, supply, and retail of electricity within the state. What this means is that states still have the liberty to enact laws through their state Houses of Assembly to regulate state electricity market, create power stations for generation of electricity for supply, transmission and distribution to rural unserved and underserved areas.

Creation of Integrated National Electricity Policy and Strategic Implementation Plan: To further guide the overall development of the electric power sector in Nigeria for optimal utilization of resources like coal, natural gas, nuclear substance, and materials, as well as renewable energy sources for the generation, transmission and distribution of electricity, the Act mandates the Federal Government to create an Integrated National Electricity Policy and Strategic Implementation Plan. This new strategic policy implementation plan is to be initiated through the ministry in charge of power, within one year of the commencement of the Act upon approval of the Federal Executive Council (FEC) and may be reviewed periodically but not later than every five years.

Validity of the pre-privatization and post-privatization of the Nigerian Electricity Supply Industry (NESI): The Act recognizes the validity of the pre-privatization and post-privatization of the Nigerian Electricity Supply Industry (NESI) which resulted in the unbundling of the defunct National Electric Power Authority (NEPA), into 18 distinct Power generation, transmission, and distribution companies, which emerged from the Power Holding Company of Nigeria (PHCN) which was the initial holding company. The Act also provides for the regulation and supervision of competition in the substantially privatized electricity market, by ensuring that the federal minister in charge of power exercise supervisory powers and functions.

Creation of the Nigerian Electricity Regulatory Commission (NERC): The Act creates the Nigerian Electricity Regulatory Commission (NERC) as the apex regulator of the NESI. It empowers NERC to among other things, license and regulate persons engaged in the generation, transmission, system operation, distribution, supply and trading of electricity, create market rules and grid codes, safety, security, reliability and quality standards, establish consumer rights and obligations regarding the provision of electricity services, monitor the general operation of the electricity markets, and place sanctions as necessary in deserving circumstances. Any grievance with the decisions or actions of the NERC by any person with respect to the cancellation of a licence, refusal to issue or renew a licence, etc.  is subject to a review first by NERC upon an application made to it and it may give a final decision rescinding or varying its earlier decision. Any further grievance with the final decision given by NERC pursuant to its review is subject to an appeal at the Federal High Court. The Act further states that a person shall not institute and maintain a suit against NERC without first initiating and exhausting the internal dispute resolution with NERC.

Compulsory installation of meters for distribution of electricity to consumers. The Act makes it mandatory for electricity distribution licensees to install meters for distribution of electricity to consumers. There is also a corresponding mandatory obligation on all consumers of electricity to allow the installation of meters in their premises and pay bills chargeable to the electricity distribution licensees. The Act provides that where a consumer fails to pay bills, the electricity distribution licensee may cut off the consumer’s connection to power after giving notice in the manner prescribed by the NERC.

Establishment of the Power Consumer Assistance Fund: The Act establishes a Power Consumer Assistance Fund (PCAF), which shall be used to subsidize electricity supply to underprivileged power consumers. This category of underprivilege power consumers shall be determined by the Minister in charge of power in consultation with the NERC.

Creation of the Rural Electrification Agency: The Act creates the Rural Electrification Agency with the objectives of coordinating corporate bodies, private investors using renewable energy sources for rural electrification in the rural, unserved, underserved areas, thereby promoting universal access to affordable and sustainable electricity, and improving the quality of life and economic opportunities of rural, unserved, and underserved communities in Nigeria.

Key Highlights

• The Electricity Act, 2023 repeals the Electric Power Sector Reform Act, 2005, the Nigerian Electricity Management Services Agency Act, 2015, the Hydroelectric Power Producing Areas Development Commission (Establishment Act, Etc.) and its various amendment Acts
• Under the Act, the Federal Government shall support the development and utilization of renewable energy sources for the generation, transmission, system operation and distribution of electricity.
• The Transmission Company of Nigeria (TCN) is obliged to incorporate a company to be known as Independent System Operator (ISO) upon a written directive of NERC which is to be licensed by NERC to carry out the market and system operation functions such as generation scheduling, commitment and dispatch, transmission congestion management, administration of wholesale electricity market, etc. which were hitherto being exercised by TCN.
• A licence is required for electricity generation (excluding captive generation), transmission, distribution, supply trading and system operation.
• The construction, ownership and operation of an undertaking for generating electricity not exceeding 1 megawatt (MW) or an undertaking for distribution for electricity with a capacity not exceeding 100 kilowatts (KW) does not require a licence.
• The Act encourages private sector investments in the generation, transmission, distribution, and supply of electricity from renewable sources such as solar, wind or water.
• The Act provides for the introduction of tax incentives as are necessary to incentivize, promote and facilitate the generation and consumption of electric power from renewable energy sources.
• The Act recognizes the power of federating states to regulate their electricity markets by issuing licenses to private investors to operate mini-grids and power plants within the state. Interstate and international electricity delivery from such mini grids is however prohibited to state as it is within the remit of the Federal Government.
• The NERC maintains its status as the apex regulator of electricity sector in Nigeria, and until the federating states pass their own electricity laws, the NERC shall continue to regulate electricity business and markets within the federating states.
• The Act creates a Power Consumer Assistance Fund (PCAF), which shall be used to subsidize electricity supply to underprivileged power consumers.
• The Act creates the Rural Electrification Agency with the objectives of coordinating the use of renewable energy sources for rural electrification and promoting universal access to affordable and sustainable electricity, which improve the quality of life and economic opportunities.
• The Act creates offences and imposes penalties. Offences such as theft of electricity, theft of electric lines and materials, receiving stolen electricity, interference with meters or works of licensees, negligently breaking or damaging, intentionally disrupting power supply, damage to public street lightings, obstruction and impersonation, general contravention of orders and regulations and their penalties are specifically provided for under the Act.

Conclusion

The deficiency in power transmission in Nigeria has been attributed to inadequate power transmission infrastructure. The decentralization of power generation and distribution under the Electricity Act 2023, which gives states the power to develop legislations to create local markets for generation and transmission of power to all areas within their boundaries is anticipated to enhance affordable and sustainable electric power to all areas. Indeed, with the introduction of a parallel electricity market in the states, customers within the states can decide to remain connected to the national grid or opt for a mini-grid operator licensed by the state within which they reside in. The shift from fossil-based systems of energy production and consumption to renewable energy sources will create a market for renewable energy and stimulate private sector investments.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact:

The Companies and Allied Matters Act 2020 (CAMA) is the principal legislation that governs the registration of companies in Nigeria while the Corporate Affairs Commission (CAC) is the regulatory authority. Apart from the registration of the company, there are other regulatory requirements that must be met before any company can legally commence its business in Nigeria.

Registration with CAC

The process involved in the registration of a company in Nigeria are as follows:

1. Availability and Reservation of Proposed Name
2. Application and Registration
3. Approval

Availability and Reservation of Name

The first step is to conduct a name availability search with the CAC. The purpose of this is to ensure that the proposed name of the company is available for use and that there is no other company that has registered the same or similar name. Once the name is available, the CAC would issue a certificate of name reservation, which is usually valid for 60 days, enabling the registration to proceed to the next stage. It is always advisable to propose two names in case the first name is not approved.

Application and Registration

Following the reservation of the proposed name above, the next step would be to prepare all the necessary documents in support of the application. These includes the memorandum and articles of association of the proposed company. To this end, the promoters of the proposed company are required to provide the following information:

1. The type of company to be registered
2. Registered address of the company
3. The objects or nature of business of the company
4. Details of the company secretaries
5. Minimum issued share capital. (Please note that there is a minimum issued share capital requirement of N10,000,000 for companies with foreign participation. The minimum issued share capital could be more depending on the sector the company wishes to operate in).
6. Particulars of the proposed shareholders.
7. Particulars of the proposed directors.

Approval by CAC

Once the above information has been received and completed, they are submitted to the CAC for vetting. Payment of the filing fee is made and stamp duty is charged on the minimum issued share capital at the rate of 0.75%.  If satisfied, the CAC shall issue a certificate of incorporation evidencing that the company is now a legal entity authorized to commence business in Nigeria. Simultaneously, the Federal Inland Revenue Services (FIRS) would issue a Tax Identification Number (TIN) to the newly registered company. The TIN is a unique identifier that is linked to the company which enables it charge and remit the appropriate taxes to the FIRS.

Business Registration with Nigerian Investment Promotion Commission (NIPC)

Following the successful incorporation of the new entity with the CAC, there is a mandatory requirement for that entity to be registered with the NIPC before the company could legally commence any business in Nigeria. The NIPC has the primary responsibility to encourage, promote and coordinate investment in the Nigerian economy. The NIPC also has the responsibility of granting some incentives like pioneer status to any company which qualifies for such status.

The application to the NIPC involves filling the relevant application form, providing details of the shareholders and directors of the company and paying the appropriate official fee. If satisfied, the NIPC would issues a Certificate of Business Registration to the entity.

Business Permit, Expatriate Quota and Work Permit

In addition to the above, a wholly owned foreign company wishing to operate in Nigeria must obtain a business permit from the Nigerian Ministry of Interior and expatriate quotas if it wishes to employ foreigners in the country.  The expatriate quota is the precursor to the application for and issuance of work permit to the foreigner being employed by the company in Nigeria. Once approved, the expatriate is issued a Combined Expatriate Residence Permit and Aliens Card (CERPAC) which allows the employee to reside and work in Nigeria.

Certificate of Capital Importation

The company will need to obtain a Certificate of Capital Importation (CCI) from an authorised dealer, usually a local bank to serve as evidence of importation of capital which could be equity, debt, cash or goods into the country. The CCI also guarantees the unconditional repatriation of capital and profits out of the country.

Other Registrations/licensing Requirements

Depending on the sector of the Nigerian economy where the new company wishes to operate, it may be necessary to obtain registrations and/or licenses from some of the following (non-exhaustive) agencies:

• Central Bank of Nigeria (CBN)
• National Agency for Food and Drug Administration and Control (NAFDAC)
• Nigerian Electricity Regulatory Commission (NERC)
• Nigerian Communications Commission (NCC)
• Nigerian Civil Aviation Authority (NCAA)
• Nigerian Maritime Administration and Safety Agency (NIMASA)

Conclusion

Nigeria is a country of over 200 million people and operates a free market economy. There are no restrictions on foreigners wholly owning and operating companies in the country. The CAMA is the principal legislation that governs company registrations in the country and the CAC is the main regulatory body that oversees the registration of companies in Nigeria. The NIPC has the primary responsibility to encourage, promote and coordinate investment in the Nigerian economy. Any company wishing to employ expatriates in Nigeria must first obtain an expatriate quota for the relevant expatriate positions and then obtain work and residency permits.

There are other licensing and registration regimes, which depending on the sector the company wishes to operate in, it will also have to register with those agencies.

Please note that the contents of this Article are for general guidance on the Subject Matter. It is NOT legal advice. For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact us.

The Companies and Allied Matters Act 2020 (CAMA) is the principal legislation that governs the registration of companies in Nigeria while the Corporate Affairs Commission (CAC) is the regulatory authority. Apart from the registration of the company, there are other regulatory requirements that must be met before any company can legally commence its business in Nigeria.

Registration with CAC

The process involved in the registration of a company in Nigeria are as follows:

1. Availability and Reservation of Proposed Name
2. Application and Registration
3. Approval

Availability and Reservation of Name

The first step is to conduct a name availability search with the CAC. The purpose of this is to ensure that the proposed name of the company is available for use and that there is no other company that has registered the same or similar name. Once the name is available, the CAC would issue a certificate of name reservation, which is usually valid for 60 days, enabling the registration to proceed to the next stage. It is always advisable to propose two names in case the first name is not approved.

Application and Registration

Following the reservation of the proposed name above, the next step would be to prepare all the necessary documents in support of the application. These includes the memorandum and articles of association of the proposed company. To this end, the promoters of the proposed company are required to provide the following information:

1. The type of company to be registered
2. Registered address of the company
3. The objects or nature of business of the company
4. Details of the company secretaries
5. Minimum issued share capital. (Please note that there is a minimum issued share capital requirement of N10,000,000 for companies with foreign participation. The minimum issued share capital could be more depending on the sector the company wishes to operate in).
6. Particulars of the proposed shareholders.
7. Particulars of the proposed directors.

Approval by CAC

Once the above information has been received and completed, they are submitted to the CAC for vetting. Payment of the filing fee is made and stamp duty is charged on the minimum issued share capital at the rate of 0.75%.  If satisfied, the CAC shall issue a certificate of incorporation evidencing that the company is now a legal entity authorized to commence business in Nigeria. Simultaneously, the Federal Inland Revenue Services (FIRS) would issue a Tax Identification Number (TIN) to the newly registered company. The TIN is a unique identifier that is linked to the company which enables it charge and remit the appropriate taxes to the FIRS.

Business Registration with Nigerian Investment Promotion Commission (NIPC)

Following the successful incorporation of the new entity with the CAC, there is a mandatory requirement for that entity to be registered with the NIPC before the company could legally commence any business in Nigeria. The NIPC has the primary responsibility to encourage, promote and cordinate investment in the Nigerian economy. The NIPC also has the responsibility of granting some incentives like pioneer status to any company which qualifies for such status.

The application to the NIPC involves filling the relevant application form, providing details of the shareholders and directors of the company and paying the appropriate official fee. If satisfied, the NIPC would issues a Certificate of Business Registration to the entity.

Business Permit, Expatriate Quota and Work Permit

In addition to the above, a wholly owned foreign company wishing to operate in Nigeria must obtain a business permit from the Nigerian Ministry of Interior and expatriate quotas if it wishes to employ foreigners in the country.  The expatriate quota is the precursor to the application for and issuance of work permit to the foreigner being employed by the company in Nigeria. Once approved, the expatriate is issued a Combined Expatriate Residence Permit and Aliens Card (CERPAC) which allows the employee to reside and work in Nigeria.

Certificate of Capital Importation

The company will need to obtain a Certificate of Capital Importation (CCI) from an authorised dealer, usually a local bank to serve as evidence of importation of capital which could be equity, debt, cash or goods into the country. The CCI also guarantees the unconditional repatriation of capital and profits out of the country.

Other Registrations/licensing Requirements

Depending on the sector of the Nigerian economy where the new company wishes to operate, it may be necessary to obtain registrations and/or licenses from some of the following (non-exhaustive) agencies:

• Central Bank of Nigeria (CBN)
• National Agency for Food and Drug Administration and Control (NAFDAC)
• Nigerian Electricity Regulatory Commission (NERC)
• Nigerian Communications Commission (NCC)
• Nigerian Civil Aviation Authority (NCAA)
• Nigerian Maritime Administration and Safety Agency (NIMASA)

Conclusion

Nigeria is a country of over 200 million people and operates a free market economy. There are no restrictions on foreigners wholly owning and operating companies in the country. The CAMA is the principal legislation that governs company registrations in the country and the CAC is the main regulatory body that oversees the registration of companies in Nigeria. The NIPC has the primary responsibility to encourage, promote and coordinate investment in the Nigerian economy. Any company wishing to employ expatriates in Nigeria must first obtain an expatriate quota for the relevant expatriate positions and then obtain work and residency permits.

There are other licensing and registration regimes, which depending on the sector the company wishes to operate in, it will also have to register with those agencies.

Please note that the contents of this Article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com  or contact us.