The Securities and Exchange Commission (SEC) has proposed a minimum paid-up share capital of N7.5 billion for Free Trade Zone Entities (FTZEs) seeking to raise funds from the Nigerian capital market.
The proposal was contained in a circular issued by the commission and seen by Nairametrics.
The draft regulations are aimed at strengthening investor confidence and setting clear eligibility requirements for companies operating within Nigeria’s free trade zones.
What the SEC is saying
The SEC said the proposed rules are backed by Section 95(1)(f) of the Investments and Securities Act (ISA) 2025.
- “An FTZE seeking to offer or issue its shares under these Rules shall have a minimum paid-up share capital of not less than N7.5 billion.”
SEC said companies must have at least three years of operational track record, and at least two of those years must be spent operating independently within a free trade zone.
It noted that only entities licensed by recognised authorities, such as the Nigeria Export Processing Zone Authority or the Oil and Gas Free Zone Authority, will qualify.
The commission added that issuers must also meet governance, tax compliance, and continuous reporting obligations, including mandatory listing on a recognised securities exchange.
Get up to speed
Free Trade Zone Entities operate under special regulatory frameworks designed to promote investment and trade.
- FTZEs are licensed businesses operating within designated free trade zones.
- In Lagos, the Lekki Free Trade Zone hosts over 53 enterprises employing more than 4,000 workers.
- The zone spans about 830 hectares and is integrated with the Lekki Deep Sea Port.
Companies in these zones enjoy tax incentives and can repatriate profits freely.
These incentives have made free trade zones attractive hubs for industrial and commercial activities.
More insights
The SEC said the new framework is designed to improve transparency and align FTZE offerings with broader market standards.
- Applicants must provide evidence of licensing by a Free Trade Zone Authority.
- They are required to submit certified corporate documents and shareholder registers.
- Board composition must be disclosed and verified by the relevant authority.
- A “No Objection” letter from the Free Trade Zone Authority is also required.
The commission noted that the measures are aimed at safeguarding investors and ensuring credibility in capital market transactions.
What you should know
Recent developments highlight growing investment activity within Nigeria’s free trade zones.
Lagos State recently inaugurated the Irele Tower, the first commercial building in the Lagos Free Zone.
The nine-storey structure is designed as a sustainable, energy-efficient workspace.
It is located within the Lekki economic corridor, one of Nigeria’s fastest-growing investment hubs.
The development underscores increasing private sector interest in free zone infrastructure.
The proposed SEC rules are expected to further shape how companies within these zones access capital and engage with the broader market.
