CAC asks Nigerian startups with foreign investors to have minimum N100m paid-up capital

Nigeria’s business registration and regulation agency, the Corporate Affairs Commission (CAC) has unveiled a substantial amendment that will impact startups with foreign involvement. The new regulation by the agency is stipulating a minimum paid-up capital requirement of N100,000,000 (one hundred million naira).

The move, which was released via a memo and is under the Revised Handbook on Expatriate Quota Administration (2022), aims to regulate and standardise the involvement of foreign entities within Nigerian startups.

In the announcement, the CAC officially declared the commencement of the implementation of the N100,000,000 minimum paid-up capital prerequisite for companies with foreign participation.

Furthermore, the CAC highlighted the significance of compliance with this requirement, stressing that the processing of incorporation applications for companies with foreign involvement will strictly adhere to the prescribed minimum paid-up capital threshold.

For existing companies already operational but falling short of the stipulated minimum paid-up capital, the CAC has provided a grace period. The commission has granted a grace period of six (6) months from the date of the notice for existing companies to align with the revised financial mandate.

These companies, which have foreign participation and currently possess less than N100,000,000 in paid-up capital, are urged to ensure compliance within a specified timeline.

Read also: CAC to deregister over 100,000 companies for failing to file yearly returns in 10 years

Netizens react to new CAC’s paid-up capital threshold

The announcement has sparked reactions within the startup ecosystem, with varied responses from stakeholders.

While some perceive this as a means to enhance the financial credibility of startups and ecosystems, netizens have expressed concerns about the potential limitations it might pose, especially for budding ventures seeking international collaborations or investments.