By Christiana Ufomba


The Central Bank of Nigeria (the “CBN”) on 3 May 2023 released a Guideline for the regulation of Representative Offices of foreign banks in Nigeria (the “Guidelines”). The Guidelines were issued by the CBN pursuant to the provisions of the Banks and Other Financial Institutions Act 2020 (“BOFIA”) prohibiting foreign banks from operating branch offices or representative offices in Nigeria without the prior approval of the CBN.[1]

The Guidelines set out (i) the requirements for obtaining the approval of the CBN to set up a Representative Office and (ii) guidance to stakeholders (such as existing representative offices and foreign banks seeking to operate such offices in Nigeria) on the operational and management terms for representative offices.

This article highlights key takeaways from the Guidelines and the potential effect of the Guidelines on Foreign Banks and investors in the Banking industry, seeking to operate representative offices in Nigeria.


The Guidelines define an approved Representative Office (“RO”) of a foreign bank in Nigeria as “a liaison office of a foreign bank licensed by the Central Bank of Nigeria, whose sole object is to market the products and services of its foreign parent as well as serve as a liaison between its foreign parent and local banks, an affiliate of the foreign parent, other financial institutions, private companies, and the general public”[2].

The Guidelines apply to banks licensed under any foreign law, with a registered head office outside Nigeria. It also applies to any financial institutions licensed under any foreign law, whose primary business includes the receipt of deposits, granting of loans, and/or provision of current savings.

Further, any foreign-owned operating bank/ financial holding company that is foreign-based, that owns controlling interest in one or more banks or institutions whose primary business includes the receipts of deposits, granting of loans, and provision of current and savings accounts, fall under the ambit of institutions that the Guidelines applies to[3].

Some of the notable provisions in the Guidelines are highlighted below:

  1. Prohibition from Banking business:

The Guidelines prohibits ROs from carrying out banking business or any other regulated activity in Nigeria[4]. Thus, any investor interested in operating within the banking industry in Nigeria should note that banking activities cannot be carried out with a RO. Also, in conducting due diligence exercises prior to embarking on an investment, investors should consider the scope of operations of a RO to ensure there is compliance with the Guidelines.

  1. Permissible Activities of ROs:

The Guidelines provide a detailed list of permitted activities for foreign banks’ ROs. In addition to other businesses that the CBN may specify, ROs are permitted to:

  1. carry out research activities on behalf of the foreign and parent and serve as a liaison between foreign parent and local banks, private institutions in Nigeria and other customers of the foreign parent based in the country;
  2. pursue business opportunities for the foreign parent or affiliated institutions regarding the availing and/or syndication of foreign currency-denominated loans as well as connect banks and other financial institutions to its foreign parent;
  3. assist exporters in Nigeria with information related to the laws and markets of target countries in which the foreign parent or any of the Group’s affiliates has a subsidiary; facilitate seminars, forums, and other activities within Nigeria through which a foreign parent may meet with and hold further discussions with existing or potential customers in Nigeria;
  4. collate and distribute economic and financial information or country reports to its foreign parent for use by customers of the foreign parent; and
  5. assist customers of the foreign parents that desire to invest in Nigeria or do business with Nigerian companies subject to the extant data protection regulations[5].
  1. Requirement for the grant of the CBN License:

Foreign banks desirous of establishing a RO in Nigeria are required to apply to the CBN for a license. The procedure for obtaining such a license is in stages[6]. The Guidelines contain specific details of the procedure for obtaining the said license from the CBN. However, it should be noted that ROs are required to pay a non-refundable application fee of Five Million Naira[7] (NGN5,000,000) (which is approximately $10,500) and a non-refundable licensing fee of Ten Million Naira (NGN10,000,00) (which is approximately $21,000).[8] However, the fees are susceptible to review by the CBN.

  1. Reporting Requirements:

Further to obtaining the requisite license, ROs are required to, not later than 28 February every year, submit a certificate evidencing that no income was earned or accrued to the Nigeria office as well as a written confirmation by its head office that the RO has complied with all the requirements in its approval document which must be submitted before 31st January of the following year and a quarterly report on all the ROs activities (if any) which must be submitted within 14 days from the end of the quarter.[9]

  1. Variation in shareholding

In the event of a variation of the shareholding structure of a RO that changes the control and /or majority ownership in its foreign institution, the RO must immediately or in any case within seven (7) days of the change notify the CBN.[10]


With the new Guidelines in force, foreign entities intending to set up a Representative Office in Nigeria must now comply with all the requirements contained in the Guidelines or risk facing appropriate sanctions from the CBN,[11] ranging from the suspension of the license issued and the imposition of a fine. As a matter of fact, representative offices already operating in Nigeria, must comply with the requirements in the Guidelines on or before 30 October 2023.[12] It is likely that there would be enhanced regulatory oversight of Representative Offices in a bid to streamline the entry process and provide transparency and fairness to foreign banks seeking to establish presence in Nigeria.

Further, CBN regulated entities found assisting, supporting or facilitating the presence and the operations of unlicensed international financial institutions, now stand the risk of facing severe sanctions from the CBN.[13]


Before the issuance of the Guidelines by the CBN, there were no clear-cut requirements regarding the operation of Representative Offices of foreign banks in Nigeria, irrespective of numerous clamors in that regard. The Guidelines represent a significant milestone in the Nigerian financial services industry as it provides clarity for foreign banks considering setting up representative offices in Nigeria. This, in turn, encourages Foreign Direct Investment (FDI) by connecting capital to various investment opportunities.

In addition, through periodic reporting requirements and on-site inspections, the CBN can identify any potential risks or misconduct and take appropriate measures to mitigate them thereby contributing to the overall stability of the financial services industry.

About the Writer

Christiana Ufomba is a double-first class legal practitioner. She is currently a Trainee Associate in one of the leading law firms in Nigeria. She can be reached at: or

[1] Section 6 (1) and 8(1) of the BOFIA 2020

[2] Paragraph 2.0 of the Guidelines

[3] Paragraph 1.1 (a-c)

[4] Paragraph 2.0 of the Guidelines

[5] Paragraph 3.1 of the Guidelines

[6] Paragraph 4.0 of the Guidelines

[7] Paragraphs 4.1 (b) and 4.5 of the Guidelines

[8] Paragraphs 4.2(i) and 4.5 of the Guidelines

[9] Paragraph 5.1 of the Guidelines

[10] Paragraph 5.2 (i) of the Guidelines

[11] Given that the Guidelines is to be read in conjunction with the provisions of the BOFIA and the CBN Act, and other relevant laws, the BOFIA’s provision on the failure to comply with CBN Guidelines is read in conjunction with this Guidelines.

[12] Paragraph 1.0 of the Guidelines

[13] Paragraph 6.0 of the Guidelines

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