It should come as no surprise that some of the most powerful financial institutions in Africa are located in Nigeria, given that Nigeria is the nation in Africa with the greatest population and the highest nominal Gross Domestic Product, or GDP. Access, GTB, and Zenith are at the forefront of the new generation of Nigerian banks that are establishing themselves as active participants in regional markets.
Because of the growing prevalence of digital technology, the Nigerian financial system has undergone a true metamorphosis and undergone a revolution. Digitization, mobile and SMS banking, payment services, artificial intelligence or chatbots for customer care, fintech businesses, and digital-only banks are some of the most recent developments to emerge in this industry. These things have made certain that these banks are always on their toes in terms of the rivalry, and of course, they have made them more efficient.
According to a publication by African Business titled “Africa’s Top 100 Banks 2020: West Africa and Central Africa,” Nigeria’s Zenith Bank continues to be one of the most successful financial institutions in the region, Access Bank was named Banker of the Year at the African Banker Awards, and First Bank continues to maintain a solid capital base. Thirteen of the top 20 banks on this list are commercial banks based in Nigeria, making them the most represented country.
The Banks and other Financial Institution Act is the primary piece of legislation that regulates and directs the affairs and operations of banks in Nigeria. This act gives the Central Bank of Nigeria the power and authority to supervise and regulate the affairs of all banks and financial institutions. The CBN Act of 1958 created the Central Bank of Nigeria as Nigeria’s central bank and the supreme monetary authority. The CBN is also known as the Bank of National Currency.
There are at least 41 different types of banks operating in Nigeria as of the year 2021. These banks include commercial banks, non-interest banks, microfinance banks, merchant banks, and online-only banks. These financial institutions are categorised based on the kind of authorisation they have. Just a small fraction of these commercial banks have been granted permission to operate internationally. These include the Access Bank Plc, the Fidelity Bank Plc, the First City Monument Bank Limited, the Guaranty Trust Bank Plc, the Union Bank of Nigeria Plc, the United Bank for Africa Plc, the Zenith Bank Plc, the CitiBank Nigeria Limited, and the EcoBank Plc. Other banks are either regional or national in scope.
It is not difficult for a foreign individual to open a business bank account in Nigeria so long as all of the regulatory criteria are satisfied. The following is standard procedure for all of these banks when it comes to creating new bank accounts, despite the fact that each of these institutions has its own set of guidelines for the establishment of new bank accounts:
- A Nigerian business that has been properly organised and can provide proof that it is registered with the Corporate Affairs Commission (CAC). This is the first and most crucial prerequisite in the process of creating a bank account, and it is also perhaps the single most important document. The company’s name, the number and date of its incorporation, the address of its registered or operating business, its tax identification number, the biographical information of its directors and shareholders or beneficial owners, and the nature of the business must all be included in the documents that are filed to incorporate the company.
- The Process of Notarizing Documents Banks are going to require that non-Nigerian Directors and Shareholders or Beneficial Owners provide a notarized copy of external documents that have been submitted to them. These documents include identification documents like the data page of a national passport, as well as the incorporation document of a foreign company that is listed as a shareholder or beneficial owner.
- Your Bank’s Unique Identification Number (BVN). The Bank Verification Number (BVN) is an 11-digit identification number that is exclusive to each person in the Nigerian banking system. Every director (and in certain cases, shareholders and beneficial owners) that is named on the incorporation papers will be needed to register for a BVN in accordance with the law. This is a legislative obligation. To apply for a BVN number, non-Nigerian citizens must visit one of the several enrollment facilities that are located outside of Nigeria.
- Documentation of the Location Where the Company Is Currently Registered or Running Companies are obligated to provide a copy of evidence that may verify the location of their place of business. Lease or rental agreements, as well as utility bills for the company address that are no more than three months old, are examples of acceptable papers.
- A resolution from the board and a letter of set-off The financial institution will ask for a resolution from the board of directors that has been signed by at least two directors or by one director and the company secretary. Here is an excerpt from your board meeting in which it was decided that an account should be created in the bank and that various persons, directors, or signatories should be granted certain levels of access over the account.
- Expatriate Residence Permit and Aliens Card Integrated into One Document (CERPAC). Signatories on a bank account must be Nigerian citizens or have a valid residency permit in order to be a foreign national. CERPAC certifications are good for at least a year and may be renewed. There are some foreigners who would want to retain control of their online banking while appointing a local director to serve as a bank signatory, provided that the local director is subject to specific decisions.
- Recommendations from two different Nigerian businesses that have active bank accounts It is necessary for you to be presented by two Nigerian businesses, each of which must have a business bank account at one of the country’s financial institutions. It is taken for granted that the people who are recommending you are familiar to you and able to witness to your capabilities and good standing.
- Compliance with the requirements of the Standard Control Unit for the Prevention of Money Laundering (SCUML). In accordance with the Money Laundering (Prohibition) Act ML(P) Act 2011 and the Prevention of Terrorism Act (PTA) 2011, this agency is tasked with the job of monitoring, supervising, and regulating the operations of Designated Non-Financial Institutions (DNFIs).
- First Bank Deposit. The majority of financial institutions require customers to make a “minimum account opening deposit,” which refers to the minimum amount of money that must be paid into the account at the moment it is opened in order to guarantee that the account will be operational. In most cases, a certain proportion of these money will be deducted in order to cover the costs of verification searches as well as the issue of bank checks and tokens, if such services are required.
How long does it take to have a business checking account opened at a bank in Nigeria?
After you have completed all of the necessary documentation and depending on how quickly the bank can verify all of the information that was submitted, some banks may proceed to open your bank account within 24 to 72 hours. However, the bank account will remain inactive until the verification process has been completed. It is possible that the verifications will take two weeks or perhaps longer depending on how complicated the procedure is. You have the option of opening accounts in the country’s native currency, the Nigerian Naira, as well as accounts in other foreign currencies, such as the United States Dollar or the British Pound. By establishing a bank account in a foreign currency, it will be easy to move money across international boundaries.
When you open a bank account, it is common practise for you to be assigned an Account Manager, an Account Officer, or a Relationship Manager who will be in charge of following up with the process of opening the account, managing your accounts with the bank, and attending to you whenever you have a need for assistance with the bank while your bank account is in use. This is in addition to the fact that it is standard practise for you to be assigned an Account Manager.
Is it possible to register a bank account for your company in Nigeria even if you do not plan to visit there or make it your permanent home?
Absolutely, you should discuss the formation of your new Nigerian business and the creation of a bank account with your expert.
Citizens & Expats Agency Limited’s Chief Executive Officer is Ayokunle Bankole (CompanyFormation Nigeria). His company assists both Nigerians and foreigners in the process of establishing businesses in the country.
