Nigeria’s maritime sector offers opportunities for investors seeking to establish businesses involved in shipping and related maritime activities. However, setting up a shipping company requires compliance with both general corporate requirements and sector-specific maritime regulations.
For a typical shipping business, the process involves incorporating a company with the Corporate Affairs Commission (CAC) and obtaining the relevant registration from the Nigerian Maritime Administration and Safety Agency (NIMASA). Additional requirements may apply where the company intends to own or operate vessels or engage in coastal and inland shipping (cabotage).
This article explains how to register a shipping company in Nigeria, the requirements for NIMASA registration, the position of foreign investors, and the additional considerations that may apply where the company will own vessels or engage in cabotage activities.
Table of Contents
What Is a Shipping Company?
A shipping company is a business engaged in maritime transportation or related shipping activities. Depending on its business model, it may own or operate vessels, provide shipping services, act as a shipping agent, manage vessels, or provide other maritime services.
It is important to distinguish between registering a company to carry on a shipping business and registering a vessel.
The CAC registers the business entity, while NIMASA regulates important aspects of shipping and maritime operations, including the registration of shipping companies and shipping agents and the registration of Nigerian ships.
A CAC Certificate of Incorporation, therefore, does not, by itself, authorise a company to carry on every type of shipping or maritime activity in Nigeria.
Depending on the nature of its business, the company may be required to register with NIMASA as a shipping company, shipping agent, or comply with other applicable maritime registration and licensing requirements.
Can a Shipping Company be Registered in Nigeria?
Yes, a shipping company may be incorporated in Nigeria and subsequently registered with NIMASA, subject to the applicable requirements.
The first step is to get registered with the CAC. The company’s registration documents should properly reflect the intended shipping activities.
Thereafter, the company is to be registered with NIMASA, and this requires a share capital of ₦25 million.
How Do You Register a Shipping Company in Nigeria?
The registration process can broadly be divided into the following stages:
1. Choose and reserve the company name
to register a shipping company in Nigeria, the proposed company name should first be checked for availability with the CAC.
Once the name is available, the applicant may proceed with name reservation and the company’s incorporation application through the CAC’s Company Registration Portal.
The company’s objects should be drafted carefully to cover the intended shipping activities. This is particularly important because NIMASA’s requirements provide that the company’s main object should be shipping-related where the company is applying for registration as a shipping company or shipping agent.
2. Incorporate the company with CAC
The company should then be incorporated under the Companies and Allied Matters Act 2020 (CAMA).
The incorporation documents should properly state the company’s objects, share capital, shareholders, directors, and other required corporate information.
The company’s corporate structure should be considered carefully at this stage, particularly where there will be foreign participation or the company intends to operate vessels.
3. Obtain the company’s Tax ID
After incorporation, the company should ensure that its tax registration is properly established.
Nigeria’s current tax administration framework provides for a Tax Identification Number (Tax ID) for companies and other taxable persons.
The company should also maintain its tax compliance because evidence of tax compliance may be required during subsequent regulatory processes.
4. Register the company with NIMASA
After incorporation, the company can apply to NIMASA for registration as a shipping company or shipping agent, depending on the nature of its business.
The application should be accompanied by the documents and information required by NIMASA at the time of application, and should be submitted in accordance with NIMASA’s procedure.
The company should ensure that its corporate records, tax information, and supporting documents are accurate and up to date.
NIMASA may require verification or additional documentation depending on the circumstances of the application.
5. Where applicable, register with the Nigerian Ports Authority (NPA) and comply with NPERA Requirements
A shipping company or shipping agent intending to operate through Nigerian ports should comply with the applicable registration and regulatory requirements of the Nigerian Ports Authority (NPA) and the Nigeria Ports Economic Regulatory Agency (NPERA).
The NPA maintains a separate registration framework for shipping companies and agents and requires corporate, tax, and banking documentation.
The NPERA is responsible for the economic regulation of the regulated port sector and may impose additional registration and regulatory requirements on regulated service providers.
6. Complete any vessel registration required
If the company intends to own a vessel, company registration does not by itself register the vessel.
Vessel registration is a separate process administered through NIMASA’s Nigerian Ship Registration Office.
The appropriate registration category depends on factors including the vessel’s ownership, flag, charter arrangement, and intended operation.
What Are the Requirements for NIMASA Registration?
NIMASA’s published requirements to register a shipping company in Nigeria or shipping agent include, amongst others:
- CAC e-Status Report;
- Completed NIMASA Form B1;
- Original bank reference letter;
- Evidence of the applicable registration payment;
- Financial statement of account or audited account, as applicable depending on the age of the company;
NIMASA’s published requirements also specify a minimum issued share capital of ₦25 million for registration as a shipping company or shipping agent.
The exact documentation required may depend on the company’s circumstances and the procedure in force when the application is submitted. Applicants should therefore confirm the current requirements before filing.
Can Foreigners Register a Shipping Company in Nigeria?
Yes, subject to applicable Nigerian laws and regulatory requirements.
A foreigner wishing to establish a shipping business in Nigeria will generally need to establish the appropriate Nigerian corporate structure and comply with the applicable regulatory requirements.
A foreign company intending to carry on business in Nigeria is generally required under section 78 of CAMA to obtain incorporation in Nigeria, subject to the statutory exemptions.
Foreign ownership, however, should be distinguished from the separate requirements that may apply to particular maritime activities, especially vessel ownership and cabotage.
What Additional Requirements Apply to Foreign Investors?
The principal issue for this article is that foreign participation does not remove the ordinary requirements for registering and operating a shipping company in Nigeria.
A foreign investor should ensure that the Nigerian company is properly incorporated and that the applicable investment and maritime regulatory requirements are satisfied.
Where a foreign national intends to reside or work in Nigeria, separate immigration requirements may apply depending on the person’s circumstances. Those requirements are distinct from the registration of the shipping company itself.
Accordingly, foreign investors should assess any applicable investment, immigration, or employment requirements separately from CAC and NIMASA registration.
What is Cabotage and Does It Affect a Shipping Company?
Cabotage is an important consideration for shipping businesses operating within Nigerian coastal and inland waters.
The Coastal and Inland Shipping (Cabotage) Act 2003 regulates specified commercial maritime activities within Nigerian coastal and inland waters.
A company should, therefore, determine where and how it intends to operate before commencing business.
For example, a company providing international shipping services may face a different regulatory position from one intending to transport goods or passengers between Nigerian ports.
Nigerian-owned cabotage operations
NIMASA’s cabotage framework includes registration categories for wholly Nigerian-owned vessels.
The applicable requirements may concern vessel ownership, registration, manning, and the nature of the proposed operation.
Incorporating a Nigerian company does not, by itself, mean that every vessel or maritime operation automatically qualifies for cabotage.
Foreign-owned vessels
Foreign participation in cabotage is subject to the Cabotage Act and NIMASA’s applicable registration, licensing and waiver framework.
Depending on the proposed operation, additional vessel and corporate documentation and applicable waiver requirements may apply.
Foreign ownership of a Nigerian shipping company therefore does not automatically cancel out the separate requirements applicable to cabotage operations.
What Happens if the Company Wants to Own the Policy?
It is important to point out that vessel registration is separate from company registration.
A company intending to own a Nigerian-registered vessel must comply with NIMASA’s Nigerian Ship Registration Office requirements.
Depending on the registration category, the process may require corporate documents, vessel particulars, evidence of ownership, applicable certificates, and survey documentation. The appropriate registration will depend on the vessel’s ownership, flag, charter structure, and intended use.
What Should Investors Do Before Commencing Operations?
Before commencing a shipping business in Nigeria, investors should determine exactly what the proposed company will do. The following should be considered:
- Decide on the type of shipping business. Determine whether the company will operate as a shipping company, shipping agent, vessel owner, or another maritime business.
- Choose suitable company objects. Ensure that the company’s proposed activities are properly reflected in its CAC incorporation documents.
- Incorporate the company with CAC. Register the company and put the required corporate documents and structure in place.
- Meet NIMASA’s requirements. Ensure that the company satisfies the applicable share capital and other requirements for NIMASA registration.
- Register with NIMASA. Apply for registration as a shipping company or shipping agent, as applicable.
- Register any vessel separately. If the company will own a vessel, complete the applicable vessel-registration process with NIMASA.
- Check whether cabotage rules apply. If the company will carry out domestic shipping activities within Nigerian coastal or inland waters, determine the applicable cabotage requirements.
- Obtain any additional approvals. Depending on the nature of the business, other maritime or regulatory approvals may be required before operations begin.
FREQUENTLY ASKED QUESTIONS (FAQs)
1. Can a Nigerian register a shipping company in Nigeria?
Yes. A Nigerian investor can incorporate a company with the CAC and apply for the relevant NIMASA registration, subject to the applicable requirements.
2. Can a foreigner own a shipping company in Nigeria?
Yes, subject to applicable Nigerian corporate, investment, and maritime requirements. Foreign ownership does not, however, remove separate requirements that may apply to vessel ownership or cabotage activities.
3. Does registering a company with CAC make it a shipping company?
No. CAC incorporation creates the corporate entity. Where the company’s activities require NIMASA registration, the company must separately satisfy the applicable NIMASA requirements.
4. How much share capital is required for a shipping company in Nigeria?
NIMASA’s published requirements for registration as a shipping company or shipping agent specify ₦25 million minimum share capital.
5. Does a shipping company need to own a vessel?
No. A company can carry on certain shipping-related activities without owning a vessel. Whether a vessel is required depends on the company’s particular business model.
6. Does registering the company register the vessel?
No. Company incorporation and vessel registration are separate processes.
Conclusion
Registering a shipping company in Nigeria involves more than obtaining a Certificate of Incorporation from the Corporate Affairs Commission. The process generally requires incorporating the company, ensuring that its corporate objects and capital structure meet the applicable requirements, establishing tax compliance, and obtaining the relevant NIMASA registration.
Where the company will own or operate vessels, additional vessel-registration requirements may apply. Businesses intending to operate within Nigerian coastal or inland waters must also consider the applicable cabotage requirements.
Foreign investors may also establish shipping businesses in Nigeria, subject to applicable corporate, investment, and maritime laws.
Investors should, therefore, determine the nature of their proposed shipping business before incorporation, as the company’s activities will determine the additional regulatory requirements that apply.
Do You Need Expert Assistance with Registering a Shipping Company in Nigeria?
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Disclaimer: This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice.
For specific legal advice, contact us.
WRITTEN BY:
UCHEAGWU CHIEFO, LL.B., B.L.
LEGAL ASSOCIATE
TCORPORATE LEGAL ADVISORY