The requirement for enterprises with foreign participation to have a minimum paid-up capital of N100 million has been put into effect by the Corporate Affairs Commission (CAC).
According to CAC, the amount represents a 900% increase over the previous value and is consistent with the Revised Handbook on Expatriate Quota Administration (2022).
A flyer, dated December 5 and signed by management, was placed on the X platform by CAC. It claimed that any application for the creation of a company with foreign participation would not be processed unless it met the aforementioned condition.
It mandated that, within six months of the date of this notice, already-existing businesses with foreign participation and less than N100 million in paid-up capital ensure compliance with the aforementioned criterion.
It stated, “Under Section 571(e) of the Companies and Allied Matters Act 2020, the Commission shall commence proceedings for the compulsory winding-up of the Companies.”
For these companies, the minimum issued share capital requirement has been N10 million since 2004.
Aluko & Oyebode claim that because the handbook’s recommendations do not apply retroactively, businesses that had legitimate business permits under the previous regulations are exempt from the new regulations.
It said that businesses who registered under the former minimum share capital requirements but have not yet received business permits could have to raise their capital to comply with the new requirements.
