HOW TO REGISTER A REPRESENTATIVE OR LIAISON OFFICE IN NIGERIA

Introduction

The company and allied Matters Act 2020 (CAMA) which is the law that guides corporate and business-related activities in Nigeria requires any company that wishes to conduct business activities in Nigeria to register with the corporate affairs commission. The Corporate Affairs Commission (CAC) is the body that regulates business registration and post incorporation activities in Nigeria.

A Foreign company wishing to set up business operations in Nigeria must be registered in Nigeria as a company. The law also permits a foreign company to set up a representative office in Nigeria.

A representative or liaison office is one established by a foreign company or a legal entity to conduct marketing and other non-transactional operations in a foreign country where a branch office or subsidiary may or may not be established.

The need for a representative office usually arises when companies are faced with the growing need of their products or services entering into a new market and also to build a relationship with clients or customers.

Features of a Representative Office

1. The representative office has no legal status and as such cannot be sued or sue in itself; it is oftentimes a temporary administrative arrangement.
2. The liabilities of a representative office extend to the parent company which is a foreign company.
3. The only allowed activities of a representative office are for conducting market research, act as storage or display of goods, or serves as a promotional office and provision of logistics for the foregoing.
4. A representative office is not subject to tax payment since it cannot generate income provided that it does not include certain objectives in its memorandum and articles of association which could make it liable for taxation.
5. A representative office cannot engage in business, negotiate or conclude contracts. The office only serves as a liaison or promotional office. The expenses run in the representative office must be an inflow from the foreign company.
6. A representative is incorporated just like a private liability company, the only distinction is that the objectives are different and usually the name carries representative office. Thus, the cost and timeline for registration is the same as that of a private company limited by shares.

Benefits of setting up a representative office in Nigeria

1. Market presence can be established at very low cost.
2. A local bank account can be created to assist with financial transactions.
3. The representative office would be allowed to hire employees
4. The representative office can handle sales and delivery of items under the name of the parent company.

What is the Required Share Capital for Setting up a Representative Office

The required minimum share capital for incorporating a representative office is a 100 million. It is considered a company with foreign participation hence it must comply with the laid down guidelines for companies with foreign participation.

Requirements for Registering a Representative Office

1. Two alternative names for the company
2. Nature and objectives of business
3. Personal details of the director, secretary, witness and shareholders such as:
4. Valid means of Identification
5. Signature
6. Passport photograph
7. Phone number
8. Date of birth
9. Email address
10. State
11. City
12. Street
13. Local government area
14. Street number
15. Share spilt among shareholders (note that people with 5% shares and above will be made persons of significant control in the company)
16. Email, phone number, state, city, street, street number, local government area of the company
17. Any other document that may be required by CAC

Licenses Required for a Representative Office

Generally, it is expected that since business will not be carried out by the company than it does not require a license but there are other compliance requirements such as:

1. Registration with the Nigerian Investment Promotion Commission (NIPC)
2. Work and residence permit where foreigners are to come into the country under the company to work
3. Expatriate quota for foreign employees
4. Registration with the Special Control Unit against Money Laundering
5. Compliance with the Central Bank of Nigeria (CBN) guidelines for representative offices for foreign banks in Nigeria which was issued on the 3^rd of May, 2023. The licensing requirements was also stated in this guideline.

Conclusion

Having a representative office is one of the ways foreign companies can carry out market research or establish a physical presence in Nigeria for their already existing clients to keep transacting with the parent company. If you need help setting up a representative office in Nigeria, kindly reach out to us and we would be willing to help.