The Corporate Affairs Commission (CAC) has initiated the enforcement of a new requirement mandating companies with foreign participation to have a minimum paid-up capital of N100 million. This amount marks a staggering 900% surge from the previous stipulation.
The increase, according to CAC, aligns with the Revised Handbook on Expatriate Quota Administration (2022). As per a flier posted on X platform dated December 5 and signed by CAC management, any new application for company incorporation with foreign participation must adhere to this revised minimum capital prerequisite.
Moreover, existing companies with foreign involvement having less than N100 million in paid-up capital have been directed to comply with this updated requirement within six months from the date of the notice. Failure to comply may lead to the initiation of compulsory winding-up proceedings under Section 571(e) of the Companies and Allied Matters Act 2020.
It’s essential to note that companies holding valid subsisting business permits under the old guidelines are not affected by the new rule’s enforcement, according to legal firm Aluko & Oyebode. However, companies registered with the previous minimum share capital but yet to obtain business permits might need to increase their share capital to align with the updated regime.