Nigeria is the largest country in Africa in terms of population and nominal Gross Domestic Product, GDP; hence it is unassuming that Nigeria host some of the most formidable financial institutions in Africa. The new generation of Nigerian banks led by Access Bank, Guaranty Trust Bank and Zenith Bank, are emerging as dynamic players in regional markets.
The Nigerian banking system has indeed metamorphosed and revolutionized due to the increasing use of digital technology. Some of the latest trends in the Nigerian banking and financial services include digitization, mobile and SMS banking, payment services, artificial intelligence or chatbots for customer services, fintech companies and digital-only banks. These have ensured that these banks continually be on their toes in terms of competition and of course more efficient.
In a publication by African Business – “Africa’s Top 100 Banks 2020: West Africa and Central Africa”, Nigeria’s Zenith Bank stays as a top performer; Access Bank won Banker of the Year at the African Banker Awards; and First Bank remaining ever strong in terms of capital base. Of the top 20 banks on this list, 13 Nigerian commercial banks were featured.
The primary legislation that regulates and directs the affairs and operations of banks in Nigeria is the Banks and other Financial Institution Act which empowers the Central Bank of Nigeria the power and authority to supervise and regulate the affairs of all banks and financial institutions. The Central Bank of Nigeria is the central bank and apex monetary authority of Nigeria established by the CBN Act of 1958.
As at 2021, there are a minimum of 41 Nigerian banks including commercial banks, non-interest banks, microfinance banks, online-only banks and merchant banks. These banks are classified according to their respective authorization. Of these numbers, just a few commercial banks have international license. These include: Access Bank Plc, 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, and EcoBank Plc; while others are either regional or national.
Opening a business bank account in Nigeria as foreigner is easy as long as all the compliance requirements are met. Although each of these banks have their individual policies with respect to bank account opening applications, however, basic to them all includes the following:
1. Duly incorporated Nigerian company with evidence of registration with the Corporate Affairs Commission (CAC). This perhaps is the single most important document and first requirement in the bank account opening process. The incorporation documents must show among other information, the company name, incorporation number and date, registered or operating business address, tax identification number, bio-data of directors and shareholders or beneficial owners, and nature of the business.
2. Notarization of Documents. Banks will require that non-Nigerian Directors and Shareholders or beneficial owners provide a notarized copy of external documents submitted to them such as identification documents e.g., data page of national passport, and incorporation document of a foreign company listed as a shareholder or beneficial owner.
3. Bank Verification Number (BVN). The BVN is an 11-digit unique identity for each individual across the Nigerian banking industry. As a statutory requirement, every director (and sometimes, shareholders and beneficial owners) listed on the incorporation documents will be required to be enrolled for BVN. There are BVN enrollment centers around the world that non-Nigerian residents can visit to apply for BVN.
4. Proof of Registered or Operating Business Address. Businesses are required to submit a copy of proof of the company’s place of business. Acceptable documents include utility bill (not more than 3 months old) of the business address, or lease/rent agreements.
5. Board Resolution and Letter of Set-off. The bank will request a board resolution signed by at least two Directors or a Director and the Company Secretary. This is an extract of your board meeting stating that an account be opened in the bank and certain level of controls be given to certain people, director or signatories.
6. Combined Expatriate Residence Permit and Aliens Card (CERPAC). Foreigners listed as bank account signatories must possess a valid Nigerian resident permit. CERPAC are valid for at least one year and renewable. Some foreigners would rather appoint a local director as bank signatory subject to certain resolutions while the foreigner take control of internet banking.
7. References from two Nigerian companies with existing bank accounts. You will be required to be introduced by two Nigerian companies who operate a business bank account in any of the Nigerian banks. It is assumed that your introducers are well-known to you and can attest to your capability and good standing.
8. Registration with the Standard Control Unit against Money Laundering (SCUML). The agency is charged with the responsibility of monitoring, supervising and regulating the activities of Designated Non-Financial Institutions (DNFIs) in line with the Money Laundering (Prohibition) Act ML(P) Act 2011 and the Prevention of Terrorism Act (PTA) 2011.
9. Initial Bank Deposit. Most banks have a minimum account opening deposit; i.e. the minimum amount of funds that should be deposited into the account at the time of opening to ensure the account is active. Usually, some portion of these funds will be debited to take care of verification search and issuance of bank cheques and tokens, if applicable.
How long does it take to open a business bank account in Nigeria?
Once all required documentation is completed, and depending on how fast the bank can verify all submitted information, some banks may proceed to open your bank account within 24 to 72 hours while the bank account remains inactive pending when verifications are concluded. Verifications could last two weeks or more depending on the complexity of the process. You can open a local currency (Nigerian Naira) account and accounts in other international currencies such as British Pound or United States Dollar. Opening a foreign currency account will make it possible to transfer funds across borders.
It is also a standard practice to be assigned an Account Manager, an Account Officer or a Relationship Manager who will be responsible for following up with the account opening process, managing your accounts with the bank and attending to you anytime you have need for assistance with the bank while your bank account is in use.
Can you have a business bank account opened in Nigeria without travel or being resident?
Yes, talk to us at Citizens & Expats Agency Limited (CompanyFormation Nigeria) about your next Nigerian company set up and bank account opening.