Nigeria is Africa’s largest country by population and nominal gross domestic product, GDP. It is therefore not surprising that Nigeria has some of the most powerful financial institutions in Africa. Access, GTB, and Zenith are the new generation of Nigerian banks that are thriving in regional markets.
Digital technology has led to a transformation in the Nigerian financial sector. The latest trends include mobile and SMS banking, digital-only banks, chatbots for customer service, fintech companies, and artificial intelligence. These trends have allowed these banks to remain competitive and more efficient.
African Business published “Africa’s Top 100 Banks 2020 West Africa and Central Africa” in a publication. It noted that Nigeria’s Zenith Bank remains a top performer, while Access Bank was named Banker of the year at the African Banker Awards. First Bank is still strong in terms of capital base. 13 Nigerian commercial banks were included among the top 20 banks.
The Banks and other Financial Institution Act is the primary legislation that governs and directs the operations of banks in Nigeria. This Act gives the Central Bank of Nigeria the authority and power to oversee and regulate all financial institutions and banks. The 1958 CBN Act established the Central Bank of Nigeria as Nigeria’s central bank and the apex monetary body.
There are at least 41 Nigerian banks as of 2021. This includes non-interest and commercial banks, merchant banks, online-only, merchant banks, and microfinance banks. These banks are classified according to their authorization. Only a handful of commercial banks are licensed internationally out of these totals. These are Access Bank Plc and Fidelity Bank Plc. First City Monument Bank Limited, Guaranty Trust Bank Plc. Union Bank of Nigeria Plc. United Bank for Africa Plc. Zenith Bank Plc. CitiBank Nigeria Limited.
As long as you meet all compliance requirements, opening a Nigerian business bank account as a foreigner in Nigeria is simple. Each bank has its own policies regarding opening bank accounts, but the basic principles are the same.
1. A Nigerian company must be duly registered and have evidence of registration with the Corporate Affairs
Commission (CAC). This document is perhaps the most crucial and essential requirement for opening a bank account. Incorporation documents must include, among other things, company name, incorporation date, registered or operated business address, tax identification numbers, bio-data about directors, shareholders, or beneficial owners, as well as the nature of the business.
2. Notarization of documents. Banks require that non-Nigerian Directors, Shareholders, or Beneficial Owners
provide a notarized version of any external documents they have received, such as identification documents, data pages from national passports, and incorporation documents of foreign companies listed as shareholders or beneficial owners.
3. Bank Verification Number (BVN).
The BVN is an 11-digit unique identification for every individual in the Nigerian banking sector. Every director, and sometimes shareholders, and beneficial owners, listed on incorporation documents must be enrolled for BVN. Non-Nigerians can apply for BVN at BVN enrollment centers around the globe.
4. A copy of proof of registered or operating business address.
A copy of proof of company location is required by businesses. Acceptable documents include a copy of the utility bill, lease/rent agreement, or any other document that can be used to prove the business address.
5. Board Resolution and Letter to Set-off.
The bank will require a board resolution to be signed by at least two directors or one Director and the company secretary. This is an extract from your board meeting that states that an account should be opened at the bank and that certain levels of control be applied to certain signatories, directors, or individuals.
6. CERPAC – Combined Expatriate Resident Permit and Aliens Permit.
A valid Nigerian resident permit is required for foreigners who are listed as bank account signatories. CAPAC is valid for at most one year and can be renewed. While the foreigner may prefer to appoint a local bank signatory, subject to specific resolutions, some foreigners prefer that the foreigner takes control of internet banking.
7. Two references from Nigerian companies that have bank accounts.
Two Nigerian companies must introduce you to any Nigerian bank that has a business account. Your introducers will assume that you are well-known and can attest to your ability and good standing.
8. Register with the Standard Control Unit against Money Laundering.
This agency is responsible for monitoring, supervising, and regulating activities of Designated Non-Financial Institutions (DNFIs) according to the Money Laundering (Prohibition) Act ML (P) Act 2011 as well as the Prevention of Terrorism Act (PTA) 2012.
9. Initial Bank Deposit. Minimum account opening deposit.
The minimum amount of money that must be deposited into the account in order for it to become active. A portion of these funds will usually be debited in order to perform verification searches and issue bank cheques or tokens, if necessary.
What is the average time it takes to open a Nigerian business bank account?
Once all documentation has been completed and verified by the bank, banks can open your account in 24 to 72 hours. However, the account will remain inactive while verifications are complete. Depending on the complexity of your process, confirmations can take up to two weeks. You can open accounts in local currency (Nigerian Niara) and other international currencies, such as the British Pound or United States Dollar. You can transfer money across borders by opening a foreign currency account.
It is a common practice to assign an Account Manager, Account Officer, or Relationship Manager. They will follow up on the account opening process, manage your accounts with a bank, and assist you whenever you need it.