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HOW TO REGISTER A TECH COMPANY IN NIGERIA

TECH COMPANY IN NIGERIA

A Tech company is a business entity that provides technological products or services. These offerings often include software development, hardware production, IT services, or innovative solutions that leverage technology to solve problems. 

Establishing and operating such a company requires strict compliance with relevant laws and adherence to regulations set by various government agencies. This ensures the company obtains the necessary approvals, permits, and licenses to operate legally and effectively.

This article will provide a detailed overview of the registration requirements for starting a tech company in Nigeria. It covers the legal and regulatory frameworks, key government agencies, and the processes involved. So whether you are an entrepreneur seeking to launch a startup or an established business planning to expand into the tech sector, understanding these requirements is important to setting up your business.

Steps to Registering a Tech Company in Nigeria

1. Choose the Right Business Structure

Before registering a tech company, you must identify the particular tech services or products the company intends to offer, and then choose the business structure for delivering these offerings. The chosen business structure will determine the requirements and regulations that must be complied with relevant laws and industry standards. 

On the business structure, a Sole Proprietorship is ideal for small-scale tech ventures with a single owner. A Partnership is suitable for two or more individuals jointly running the company. A Public Limited Company (PLC) is also suitable for large tech firms intending to raise capital from the public.

However, the most suitable suitable for tech startups is a Private Limited Liability company. It is legally recommended due to its flexibility, separate legal entity status, and ability to attract investors.

A company has a separate legal identity from its owners, meaning it can be held responsible for its actions, not the individuals behind it. It also enjoys perpetual succession, allowing it to continue even if ownership changes, and it can sue or be sued in its own name.

2. Register With the Corporate Affairs Commission

The Companies and Allied Matters Act (CAMA), 2020 is the main law that regulates businesses in Nigeria. It sets the rules for how businesses are created, run, and closed down. The law establishes the Corporate Affairs Commission (CAC), which is the government agency in charge of registering and overseeing different types of businesses, such as sole proprietorships, partnerships, and companies.

Registering with CAC is the first legal step for setting up a tech company. The Certificate of Incorporation obtained is important for further registrations with other regulatory bodies.

Registering with the Corporate Affairs Commission (CAC) is the first legal step for setting up any business, including a tech company. The Certificate of Incorporation obtained is important for further registrations with other regulatory bodies.

The requirements for Registering a Tech Company with the CAC includes:

  • Provide two proposed company name options for approval
  • Provide the business objectives of the company
  • Provide the official company address
  • Define the share capital and how shares are distributed among shareholders.
  • Provide a minimum of two (2) directors with valid identification (e.g., National ID, Driver’s License, or International Passport).
  • Provide the shareholders’ details including valid identification
  • The Memorandum & Articles of Association (MEMART) of the company
  • Proof of payment of the required registration fees.

3. Obtain Tax Identification Number

All businesses in Nigeria, including tech companies, have tax obligations and must register with the relevant tax authorities. It is mandatory to register with the Federal Inland Revenue Service (FIRS) and the State Inland Revenue Service (IRS) for Company Income Tax (CIT) and Value Added Tax (VAT) remittances.

A tech company must obtain a Tax Identification Number (TIN), which is required for filing tax returns. Failure to register and remit taxes on time can result in penalties for non-compliance.

4. Register with National Information Technology Development Agency (NITDA) License

All tech companies operating in Nigeria are required to register with the National Information Technology Development Agency (NITDA). NITDA is the regulatory body established under the NITDA Act, 2007, with the mandate to oversee and promote the growth of Information Technology (IT) across various sectors in Nigeria.

The agency is responsible for developing and enforcing IT frameworks, standards, regulations, policies, and guidelines to ensure compliance with global best practices. It plays a crucial role in electronic governance, to ensure the efficient and secure exchange of electronic data in both the public and private sectors.

By registering with NITDA, tech companies align with national IT policies, benefit from industry support, and ensure compliance with data protection and cybersecurity regulations.

5. Register with National Office for Technology Acquisition And Promotion (NOTAP)

Tech companies that engage with foreign investors for technology transfer, intellectual property use, or managerial and supervisory assistance must register their agreements with the National Office for Technology Acquisition and Promotion (NOTAP).

Established under the NOTAP Act, LFN 2004, the agency is responsible for regulating the transfer of foreign technology into Nigeria. This includes overseeing and registering all technology transfer agreements and contracts across various sectors of the economy.

Registration with NOTAP ensures compliance with national policies and facilitates knowledge transfer. It also promotes local capacity building while safeguarding Nigeria’s interests in foreign technology agreements.

6. Other Regulatory Requirements

The specific regulatory requirements for a tech company in Nigeria depend on the nature of its services and operations. In addition to registering with the Corporate Affairs Commission and NITDA, certain tech businesses may need to obtain licenses and permits from other regulatory bodies.

For example, if the company deals in fintech, gaming, or telecommunications, then it must obtain regulatory approvals from the Central Bank of Nigeria (CBN) or the Nigerian Communications Commission (NCC).

Conclusion

In conclusion, the technology industry in Nigeria is rapidly expanding and presenting numerous opportunities for innovation and growth. To operate legally, a tech company must first be registered with the Corporate Affairs Commission (CAC).

By following the steps outlined above, entrepreneurs can establish a legally recognized Tech business, attract investors, and scale operations effectively. However, we advise that you seek legal or professional assistance to ease the process and ensure full compliance with Nigerian regulations. So, if you are looking to register a tech company in Nigeria, reach out to the corporate legal team at Resolution Law Firm to start the process.