Minimum KYC Requirements for Opening Bank Accounts for Nigerian Entities Offshore

Nigeria’s recent removal from the Financial Action Task Force (FATF) Grey List marks a significant milestone in the country’s efforts to strengthen its anti-money laundering (AML) and counter-terrorism financing (CFT) regime. This development signals that Nigeria has made substantial improvements in regulatory compliance and risk management, aligning more closely with international standards. Notwithstanding the removal of Nigeria from the FATF Grey List, foreign banks are still required to conduct full KYC and AML/CFT checks for Nigerian clients, as these obligations remain mandatory under global banking regulations. This article provides some local intel for foreign banks on the minimum requirements for safely and efficiently onboarding Nigerian clients while maintaining compliance with international AML/CFT standards.

1. Identity Verification (Know Your Customer)

For Nigerian clients, primary identification can typically be established using a Nigerian passport or the National Identity Number (NIN). Secondary identification may include a driver’s license or a voter’s card. It is useful to note that the National Identity Management Commission (NIMC) has repeatedly warned the public about fake NIN websites and unauthorised agents offering NIN services. These warnings are current and ongoing. Thus, it is often essential to verify that such documents are valid, authentic, and unexpired. In cases where clients are being onboarded remotely, banks should consider accepting notarized copies or conducting video-based KYC verification to ensure compliance with global regulatory standards.

2. Residential Address Verification

Banks are required to establish a client’s residential address to prevent fraud and comply with local regulatory obligations. For Nigerian clients, acceptable documentation may include recent utility bills, such as electricity, water, or telephone bills, issued within the last three to six months, tenancy agreements or lease contracts, and bank statements from a recognized Nigerian financial institution. It is often important to ensure that the residential address provided is consistent with the client’s identification documents. Post codes are not yet an integral part of a Nigerian address. Even though post codes exist, they are not consistently used or reliable for KYC or address verification in the way they are in the UK or the U.S.

3. Source of Funds / Economic Activity

Banks are generally required to understand the source of a client’s funds in order to prevent money laundering and the financing of terrorism. For Nigerian clients, documentation varies depending on whether the client is an individual or a business. Individual clients may be asked to provide payslips or employment contracts, as well as tax clearance certificates issued by the Federal Inland Revenue Service (FIRS). Business clients should provide a Certificate of Incorporation from the Corporate Affairs Commission (CAC), their Memorandum and Articles of Association, a board resolution authorizing the account opening, and bank statements from recognized Nigerian financial institutions. It is often important to document the client’s occupation, business activity, or source of investment, and any large or unusual deposits should trigger enhanced due diligence to ensure full regulatory compliance.

4. Politically Exposed Persons (PEP) Screening

Foreign banks are required to identify clients who are politically exposed persons (PEPs), as such clients pose a higher risk of involvement in corruption-related transactions. In addition to conducting independent PEP screening using recognized international databases, it is often advisable to also obtain a self-declaration form in which the client confirms their PEP status. 

It is useful to note that Nigeria now has a Beneficial Ownership (UBO) Register. Nigeria’s Beneficial Ownership Register was formally established under the Companies and Allied Matters Act (CAMA) 2020 and reinforced by the Money Laundering (Prevention and Prohibition) Act 2022. The Corporate Affairs Commission (CAC) is responsible for maintaining this register. Thus, foreign banks can now achieve AML/CFT compliance by reviewing corporate ownership structures to identify ultimate beneficial owners (UBOs). 

How We Can Help

Our firm provides comprehensive legal and compliance support to financial institutions seeking to onboard Nigerian clients while meeting global regulatory standards. We assist banks in designing and implementing robust KYC, AML, and sanctions compliance frameworks, including identity verification, residential address checks, source-of-funds assessment, PEP screening, sanctions monitoring, and transaction surveillance. We guide institutions through the complexities of remote client onboarding, including notarized documentation, video-based verification, and secure handling of sensitive client data.