Foreign Exchange Monitoring and Miscellaneous Provisions Act Flashcards

Practice questions covering the procedures, timelines, and legal requirements for foreign capital importation and exchange monitoring in Nigeria based on the FEMMPA.

What is the primary function of the Foreign Exchange Monitoring and Miscellaneous Provisions Act regarding foreign investment?

It deals with the importation of capital through authorized dealers for foreign investors wishing to buy shares or import foreign capital loans for doing business in Nigeria.

According to the Act, into which currency is foreign capital converted at the official foreign exchange market?

The Naira.

Which sections of the Foreign Exchange Monitoring and Miscellaneous Provisions Act define authorized dealers and the certificate of capital importation?

Sections $12$, $13$, and $15$.

What is an ‘authorized dealer’ according to the Act?

A bank or other body recognized as such by the Central Bank of Nigeria (CBN) pursuant to the Act.

What specific document is issued to a foreign investor post-capital importation by the authorized dealer?

A certificate of capital importation.

Within what timeframe must an authorized dealer issue a certificate of capital importation to a foreign investor?

Within $24$ hours of application.

How long does a foreign investor have to make returns to the Central Bank of Nigeria after the issuance of the certificate?

Within $48$ hours of the issuance of that certificate.

Is the process for capital importation limited only to foreign nationals?

No; the investor may be a Nigerian or foreigner, provided the capital is coming as foreign currency.

According to Section $17$ of the FEMMPA, what privilege does the certificate of capital importation grant a foreign investor regarding account opening?

It entitles the foreign investor to open a foreign currency domiciliary account with any authorized dealer.

What are the benefits of opening a special nonresident naira account under this Act?

The investor does not pay charges and taxes on inflow and outflow.

What right does a foreigner have regarding Nigerian companies when holding a nonresident naira account?

It entitles the foreigner to buy shares in Nigerian companies out of that nonresident naira account.

At what exchange rate are capital dividends and incomes repatriated under the Act?

At autonomous market rates (minus taxes), which in essence are the CBN rates.