Nigeria operates a free market economy. Hence, there are no restrictions on foreigners starting a business in Nigeria, although they must fulfill certain requirements for setting up shop in Nigeria. The specific details of how a non-Nigerian can set up a business in Nigeria is a subject for another article. It is, however, advisable that foreigners who seek to do business in Nigeria engage the services of a business lawyer who will offer tailored guidance, including obtaining the required permits to avoid running against the law in carrying on their business operations in Nigeria.

At this point, it is important to say that, when it comes to doing business in Nigeria, the restrictions are very minimal to encourage more foreign direct investments in Nigeria. So, who can own a business in Nigeria?

The General Rule

By law, every Nigerian citizen and (non-Nigerians) can do (and own) a legal business in Nigeria. However, one of the conditions that must be fulfilled to run such a legal business in Nigeria includes being of the right age. In Nigeria, a person must be 18 years old and above to have a legal business, or own one in Nigeria.

Although there are other conditions, this one condition is a must.

Because business transactions are binding on the parties involved, a person must be of age and be able to exercise independence of mind and will to influence others to act in a way the influenced person would not have acted but for the actions of the influencing person. Although the Child’s Right Act specifies an adult as a person who is 17 years old, and above, the Companies and Allied Matters Act 2020 (CAMA) insists that only a person who is 18 years old is eligible to legally transact businesses.

This general rule is not without scientific backing, though. In an article written by Sarah Vanbuskirk “many 18-year-olds invest a lot of time into thinking about what type of life they want once they’re on their own, but they also may just be enjoying the present.” This tendency of thinking of the life that they desire informs their disposition toward others. It is no gainsaying that there are 18-year-olds who do not give a thought to their lives, nevertheless, there are an exceptional many who do enough to meddle in business ventures.

Therefore, the provisions of CAMA that allow 18-year-olds and above to own businesses contemplate the inclusion of the teeming number of business-minded individuals to set up formal businesses in Nigeria.

The Exception

Notwithstanding this general rule that limits the age of business ownership to 18 years old and above, “to every general rule, there is an exception.”

In other words, although the law restricts business ownership to persons of 18 years and above, the same law also allows a person who is less than 18 years old to own a business, upon fulfilling certain conditions. You should know that a person who is less than 18 years old is a minor and is deemed, in law, to be unable to make decisions that can bind a business or other persons in a business transaction.

Nevertheless, where a person who is less than 18 years old intends to own a business, or a parent or other adult intends to co-found a business with his/her child, ward, or acquaintance, such a minor must be accompanied by two adults. Therefore, a person who is less than 18 years old can own a legal business in Nigeria only if there are two adult owners of that business.

In a practical sense, let’s say that a person wants to set up a business, and that person is younger than 18 years old. That person cannot own that business on his/her own. He or she must have two other adults as co-founders, proprietors, or shareholders of that business, in order to own & run that business legally.

I’ve been drumming the term, “legal business”.

Not all business is legal. A person can be running a business not doing anything “bad” yet be running an illegal business.

What is a legal business?

Your business is an illegal business if it is not recognized or backed up by the Law. A business that is recognized or backed up by law is a registered business. It is also called a formal business. This is a business that is registered with the Companies Registry in Nigeria, that is, Corporate Affairs Commission (CAC).

Once you register your business with CAC,

• You become a certified and recognized business owner
• Your business becomes certified and backed up by law
• People can easily authenticate your business
• You can confidently apply for loans and grants
• You can be seen to truly do business in Nigeria

Unless your business is registered with CAC what you have is, at best, a hobby. You are not a business owner. What you have is a collection of tasks or a hobby, not an actual business.

Having said this, it is important to know that registering a business is not the first thing to do when starting a business. Before you register that business, you must lay a strong foundation for your business. This foundation entails a string of actions you must carry out to create a real business.

Some of these actions include:

• Validating your business idea – this entails being sure of the business that is right for you. Every business is profitable but not all business is profitable for you. Before you plunge your money into just any business, you must make sure that the business suits your personality, interests, expertise, and knowledge. Of course, one can be interested in a particular business area yet not have knowledge in that area.  However, hear this:

“If your interest in a business is not enough to make you seek knowledge in that area, then run! You are about to waste your time, money, and self.”

Idea is cheap. Anyone can dream up any idea, but ideas without action will result in stagnation.

Validating your business also entails knowing your ideal paying customer (IPC). Your ideal paying customer is the person who is most likely to buy from you. This person not only wants what you are selling but can pay and is willing to pay for it. In validating your business, you must know your ideal paying customer.

                “Everyone is not your customer” If you ever assume that everyone is your customer, then you have no target, will reach no financial goal, and will soon be out of business.

When you know who your ideal paying customer is, you will position yourself and your business brand to attract that customer to your business, instead of chasing, begging, or even blackmailing people to buy from you.

• Planning your business – this involves writing a Business Plan. A Business Plan is a roadmap that shows you where you’re going and how to get there. Not writing a business plan at the beginning is a recipe for misdirection. Remember that,

“If you do not know where you are going to, everywhere will look like it”

You can easily fall prey of the “shiny object syndrome” unless you have a Business Plan in place.

•  Define your Business Structure – a business without structure is like claiming to build a house when all you have is a foundation. You will agree with me that laying the foundation of a house is only a step, there’s more to the house than the foundation. The structure of that house is in having a height (the frame), the windows, the doors, rooms, roof, accessories, habitability, etc.

Unless you define the structure of your business, you don’t have any business. There are different aspects of structuring your business –

• Ownership structure
  • Management structure
  • Organizational structure
  • Legal structure & formalities
  • Financial structure, etc.

These are a few of the actions that you must carry out before you register that business. In fact, once you get this right, then you are in the process of building a high-income business that will outlive you.

You must know that nothing is ever cast in stone. In the beginning, you don’t have to have every detail sorted. You just need to have what is important. However, until you take the first action, you will never know what is possible with that idea you have.