CEM REPORT, ECONOMY | In a surprising turn of events, the Corporate Affairs Commission (CAC) has suspended the new N100m minimum paid-up capital requirement for companies with foreign participation in Nigeria. This decision comes just three days after the CAC announced the requirement,
CAC cited a “mix-up” in their interpretation of a section of the Federal Ministry of Interior Handbook on Expatriate Quota Administration 2022 Revised Edition as the reason for the reversal decision.
“Our dear esteemed customers and the general public are hereby advised to disregard our earlier issued notice titled ‘Minimum Paid-Up Capital for Companies with Foreign Participation’,” the CAC said in a statement.
The commission explained that its initial notice was based on a misunderstanding of the handbook, which referred to “issued capital” rather than “paid-up capital.”
“Our initial notice with reference to paid-up capital rather than issued capital was based on the Federal Ministry of Interior Handbook on Expatriate Quota Administration 2022 Revised Edition, as indicated on page 5.
“We shall issue an amended notice with regards to the above in due course,” the CAC added.
The earlier notice, which was released on December 5, 2023, had caused significant anxiety among businesses and investors. The directive stated that any application for incorporation of a company with foreign participation would not be processed unless it met the N100m minimum capital requirement. Existing companies with foreign participation were also given six months to comply with the new rule or face compulsory winding-up.
The suspension of the N100m minimum capital requirement is a welcome relief for businesses and investors. It will help to remove a major barrier to foreign investment in Nigeria and promote economic growth.
Benefits of CAC Reversal Decision
What does this mean for businesses and Investors?
Businesses with foreign participation that were planning to incorporate in Nigeria should now be able to do so without having to meet the N100m minimum capital requirement. However, it is important to note that the CAC is likely to issue an amended notice with new requirements in the future. Businesses are advised to stay up-to-date with the latest regulations.
[READ ALSO] Nigeria’s Trade Booms: Exports and Imports Surge in Q3 2023
The suspension of the N100m minimum capital requirement makes it easier for investors to invest in Nigerian companies. This is good news for the Nigerian economy, as it will help to attract more foreign investment and create jobs.
We will update this article as soon as the CAC issues an amended notice with new requirements.
