Banking & finance Law: Capital Importation By Foreign Investors to Nigeria

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Banking & finance Law: Capital Importation By Foreign Investors to Nigeria

capital importation in nigeria

The Foreign Exchange Monitoring and Miscellaneous Provision Act (FEMMA) 1995 amended in 2017 is the comprehensive legislation covering Foreign exchange transactions in Nigeria.

Capital Importation by Foreign Investors has become simple with reforms introduced by Central Bank of Nigeria in September 2017.

The Electronic Capital Importation Certificate (ECIC) has replaced the old Capital Importation Certificate which is usually collected or processed within 24- 48hrs by the issuance of the hard copy as evidence of capital importation certificate.

A foreigner can now contact his authorized Dealer or Bank to complete or transfer Capital importation within a few hours. This has increased the inflow of Foreign Direct Investment to the Nigerian Economy based on reports from Nigeria Bureau of Statistics (NBS) and Nigeria Investment Promotion Commission (NIPC).

All the foreigner now needs is to remit the capital to the Nigerian subsidiary or registered company affiliated to local accounts at the autonomous exchange rate. Foreign investors can also transfer funds for equity Investments in cash by transferring funds for his equity allocation or capital into Nigeria through a licensed Bank Operating in Nigeria.

The Foreigner must specify the following

  • Name of the Transferor
  • Amount Transferred
  • Beneficiary – a registered company of the Investor in Nigeria.
  • The purpose (whether Equity or Capital Investment)

The registered local beneficiary company will convene a meeting and pass a resolution accepting the Investment. Once the resolution is passed by the Board of Directors, the equity allocation is credited to the Nigerian recipient Company in local Currency at the prevailing Exchange Rate by the Central Bank of Nigeria at the autonomous Foreign Exchange Market.

Finally, the new Electronic Capital Importation Certificate (ECIC) shall be issued by the receiving bank or authorized Dealer to the Foreign Investor.

Note: Nigerian Laws allow Foreigners to access banks for loans and other financial institutions just like the local investors and foreigner can repatriate his/her earnings and profits 100% back to his/her home country or other Countries fully protected by Nigerian Laws.