The Nigerian Courts On Foreign Participation In Business Sector, The Need For Conformity With International Best Practices

Abstract

Since no nation in the world can be self-sufficing, the need for countries to engage in trading with one another becomes inevitable. Also, the effect of engaging foreign firms in contractual relation to execute highly technical works in foreign nations imply the inevitability of a robust legal regime to guide the execution of such contracts, to legitimize the activities of such outfit, and to provide legal guidelines to make such exercise lawful. Also, with the effect of globalization, there is tendency for increase in global investment and trading activities across border. The enforcement of duties and obligations necessitate the intervention of the courts and legislative guides in course of actions. Meanwhile, under the Nigerian law, a foreign company doing business in Nigeria must first be incorporated.  Also, foreign companies transacting business in Nigeria is subject to payment of Value Added Tax (VAT) Act. Meanwhile, with due respect, it is here submitted that it is necessary to add the rider that, as a guide for course of action, the adjectival clause ‘doing business or transacting business in Nigeria’ is to serve as the guide for decision making by the courts. This paper examined the need to observe international best practices in corporate governance in handing down decisions by the courts concerning noncompliance with local legislation, the attitude of Nigerian courts to the extant law that makes registration of such foreign companies a condition precedent for such companies doing business in Nigeria, where such foreign companies did businesses in Nigeria, with its attendants consequential illegality, whether theFederal Inland Revenue Services of Nigeria has the legal rights to demand for tax on the transaction, and the question; on whose lie the onus to proofnon registration of business outfit as to whether there could be a shift of the well-known evidential principle that he who alleges must proof ? These are the issues addressed in this paper with a reminder that the best practices for corporate governance are based on the objective that companies must exist to maximize values for shareholders by ensuring good social and economic performances.