How to start a business in Nigeria

Question: I'm looking at opening a branch for my printing business
in Nigeria but have no idea about how to approach this. Please
help! Dane, Portugal
Answer: There are no hard-and-fast rules on how to enter the
Nigerian market but by looking at how other foreign companies did
it, How we made it in Africa would suggest the following:
Do extensive research. The internet can be used but many
Nigerian company websites are of a low standard and not
regularly updated. The best source of information is generally
Nigerian newspapers, most of whom have websites that are
updated daily. Type in your search terms in Google News as the
content of most Nigerian newspapers show up on this service.
Make use of any contact you have in Nigeria. Try and talk to
business people from your own country that are successfully
doing business in Nigeria. Nigeria has bilateral chambers of
commerce with many countries in the world. These
organsations should be able to greatly assist any would-be
investors or business people and provide one with usable
contacts.
Once you have decided on a rough plan of action, you should
contact prospective business partners in the country. Taking on
local partners are not always essential, but highly
recommended.
Depending on your line of business, it is sometimes advisable
to discuss the venture with the Nigerian Investment Promotion
Commission (NIPC) in the capital Abuja. Visiting the NIPC is not
necessary if you only want to trade with Nigeria, but essential
for any company that wants to invest in fixed assets. The NIPC
has set-up a one stop investment centre (OSIC) to simplify and
fast track the process of investing in Nigeria. According to the
NIPC, "the establishment of the OSIC is a major public sector
reform initiative based on investment facilitation mechanism,
where relevant government agencies and ministries are brought
to one location, coordinated and streamlined to provide efficient
and transparent services to investors. This is achieved by re-
engineering agencies' processes, procedures and requirements
for granting business entry permits, licences and
authorisations, making them simpler, shorter, transparent and
responsive to the needs of investors." The NIPC should also put
you in contact with the relevant state government officials –
something that is almost impossible for the individual.
The next process would be to register your business. The
Corporate Affairs Commission (CAC) is the government agency
charged with the responsibility of the registration of companies,
business names and incorporated trustees. CAC's head office
is in Abuja but it also has smaller offices in some other states
which offer the same services.
According to the Doing Business 2010 report it requires eight
procedures and takes 31 days for a standard small to medium
sized company to start operations legally. Out of 183 countries,
Nigeria ranks 108 for the ease and cost of starting a business. For
those who don't want to go through the effort of registering a
company themselves, some law firms and other organisations
provide the service. Be sure to first check the credentials of firms
offering such services.
According to the Doing Business 2010 report, the following
procedures need to be taken to set-up a business in Lagos State
(procedures may vary from state to state).
Procedure 1
Check the availability of company name with CAC online
Time to complete: two days
Cost to complete: ₦200 (US$1.3) application form
Comment:
The CAC Online System was commissioned in June 2005. The
system envisaged an online search of unique company names
immediately upon the purchase of an e-payment card from an
accredited bank. Although this service is widely advertised by CAC,
until now the system is not fully operational either because of
power fluctuation or because of lack of availability of the pre-paid
cards necessary to conduct the on-line transaction. In most cases,
the applicants have to go to the CAC office to complete this
procedure.
Procedure 2
Prepare the requisite incorporation documents and pay the stamp
duty
Time to complete: seven days
Cost to complete: stamp duty included in Procedure 4
Comment:
To prepare the requisite incorporation documents, the incorporators
must complete the necessary statutory forms, prepare and print the
memorandum and articles of association, and have them stamped
by the Federal Board of the Inland Revenue Service.
Procedure 3
Notarise the declaration of compliance (CAC 4)
Time to complete: one day
Cost to complete: ₦200 (US$1.3)
Comment:
The declaration by the barrister or solicitor engaged in the
formation of the company may be sworn to at either the State High
Court for a fee of ₦200 (US$1.3) or at the Federal High court for a
fee of ₦20 (US$0.13).
Procedure 4
Register the company with CAC and pay fees at the bank desk of
CAC
Time to complete: eleven days
Cost to complete: ₦60,000 (US$402) legal fees + ₦500 (US$3.3)
incorporation forms + ₦10,000 (US$67) incorporation fees (an extra
₦50,