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. This proposal was detailed in a circular issued by the commission.

These draft regulations aim to bolster investor confidence and establish clear eligibility criteria for companies operating within Nigeria’s free trade zones. The SEC stated that the proposed rules are empowered by Section 95(1)(f) of the Investments and Securities Act (ISA) 2025.

According to the proposal, an FTZE seeking to offer or issue its shares under these rules must possess a minimum paid-up share capital of not less than N7.5 billion. Additionally, companies are required to demonstrate at least three years of operational track record. Of these three years, at least two must have been spent operating independently within a free trade zone.

The commission also specified that only entities licensed by recognized authorities, such as the Nigeria Export Processing Zone Authority (NEPZA) or the Oil and Gas Free Zone Authority (OFZON), will be eligible. Issuers will also need to satisfy governance, tax compliance, and continuous reporting obligations. This includes mandatory listing on a recognized securities exchange.

Free Trade Zone Entities are businesses licensed to operate within designated free trade zones, which are established under special regulatory frameworks designed to encourage investment and trade. For example, the Lekki Free Trade Zone in Lagos hosts over 53 enterprises and employs more than 4,000 individuals.