Financial Technology (FinTech) – Goldsmiths Solicitors Nigeria

Nigerian Open Banking: The Legal Framework All Banks and FinTechs Need to Know

Colin Egemonye — Wed, 10 Jun 2026 09:30:12 +0000

The Central Bank of Nigeria (CBN) framework on open banking has now transitioned from a policy document to a phased implementation. Nigeria has a comprehensive history of open banking; with the Central Bank issuing Africa’s first Open Banking Regulatory framework in February 2021, followed by the Operational Guidelines in March 2023. In April 2025, the CBN provided August 2025 as the launch date for an operation that would have seen Nigeria emerge as the first African country to launch national open banking. However, the initial launch date was deferred as the CBN stressed that a wholly automated system that offers robust data protection and stringent consumer protection mechanisms should first be in place.

By May 2026, Nigeria’s phased rollout, the implementation dates are now spread across mid-2026, confirmed in CBN’s FinTech Report which was released in February 2026. The implementation workstreams comprise 5 key areas, namely:

Governance & Regulation;
Legal & Compliance;
Technical & Infrastructure;
Data Security; and
Stakeholder Engagement.

Stakeholders have finalized and submitted their various deliverables in September 2025 and are currently pending review by the CBN. The Nigeria Inter-Bank Settlement System (NIBSS) has been nominated as the Open Banking Registry and will hold the public repository for all registered participants in the framework. All institutions that intend to participate will need to obtain a CBN license.

Legal and Regulatory Considerations for Intending Open Banking Participants

Here, we consider 5 legal questions that all banks and FinTech’s in Nigeria should now be seeking answers to, and which compliance gaps organisations in general have not addressed.

Do Application Programming Interface (API) Agreements meet CBN Data sharing obligations?

The legal and technical standards that apply to the application programming interfaces that allow for the sharing of financial information under Nigeria’s Open Banking framework are not guidelines; they are mandatory requirements and should not be treated as optional. The API agreements in place between banks and technology suppliers that existed prior to the extant open banking regime were not designed with this framework in mind and most of these will not satisfy the CBN framework.

All organisations with existing API agreements should re-examine them and ensure they meet all extant requirements. The relevant questions to ask regarding every API agreement include: whether it adequately defines the categories of data allowed to be accessed and if those are consistent with the tiers prescribed by CBN data access framework; whether the security levels required of the third party supplier meet the CBN’s minimum technical specifications; what the third party supplier’s obligations would be should data breach occur, including details on notification timelines and remedies, and whether the agreement’s terms for termination effectively allow the data supplier to cease data access if the third party supplier does not comply with their obligations under the framework.

Are Customer Consent Frameworks Updated for Open Banking?

All data sharing arrangements under the CBN Open Banking framework will be contingent on customer consent which must be informed, specific, granular, and withdrawable. CBN has clearly stated that the open banking initiative should operate with customer ownership and control of personal data; which means that customer should dictate who gets access to it, for how long, and must be able to revoke access at any time. Customer ownership and control over data was one of the key reasons given for the August 2025 delay.

A compliant open banking consent framework should outline; the specific data categories accessible to the third-party supplier; the purpose for which the third-party supplier would be utilizing the data; duration and frequency of third-party supplier’s access to data; customer’s right to revoke consent at any time, how that is done; and ramifications to the customer’s relationship with both bank and third-party supplier if the customer withdraws consent or withholds it.

A consent framework review should involve examining all customer-facing terms and digital interfaces where the company currently captures customer data and assesses its suitability for open banking. Where consent is not suitable for this purpose, new consent needs to be collected from existing customers before the institution’s data is shared under the open banking regime.

Read the full update or download the PDF here.

DFI Lending in Nigeria: What Every Borrower Must Know Before Signing

Kingsley Anyiam — Mon, 18 May 2026 10:33:30 +0000

Lending from development finance institutions such as the International Finance Corporation, African Development Bank, Proparco, and German Development Finance Institution, DEG, and other multilateral and bilateral development finance institutions is becoming more accessible to Nigerian businesses across sectors. There may be longer tenors, attractive pricing, or even a strategic partnership that adds credibility and capital.

However, borrowers should be aware that DFI loans are not commercial bank loans. They come with conditions, obligations and consequences that many Nigerian borrowers are not prepared for when they enter the facility agreement.

In this article, we identify the five most critical areas where DFI lending most often cause problems for Nigerian borrowers and what every borrower should know before signing.

ENVIRONMENTAL AND SOCIAL COMPLIANCE

Every major development finance institution lends under an Environmental and Social (E &S) framework – IFC Performance standards are the most common and most widely used directly (for IFC loans) or by reference (for many bilateral DFIs and funds that use IFC Standards as their benchmark). Respecting the applicable E & S framework is an obligation that goes beyond drawdown alone – it is an ongoing obligation throughout the life of the facility.

Specific E & S obligations that Nigerian borrowers most commonly fail to meet are: preparation and maintenance of an Environmental and Social Management System (ESMS) meeting the relevant performance standard; community and stakeholder engagement in accordance with DFI requirements; and reporting of adverse E1and1S incidents to the lender within specified timeframes.

Breach of E & S covenants is a default under most DFI facility agreements and DFI lenders have accelerated loans on E & S grounds. This is not a theoretical risk. By signing DFI facility agreements without understanding the E & S obligations, they are taking on a material default risk that is unrelated to their financial performance.

REPORTING OBLIGATIONS

Many times, DFI facility agreements place reporting obligations that are far more stringent than equivalent provisions in Nigerian commercial bank facilities. The typical requirements for borrowers are: an annual audited financial statement prepared under specific accounting standards (usually IFRS); quarterly management accounts are included within specified periods of each quarter; annual E & S compliance reports based on the applicable performance standard, verified by an independent E & S consultant; annual conformity certificates from the directors of the borrower show compliance with all financial and non-financial covenants. Events of default, material adverse change, or material litigation shall be made promptly known.

This creates a significant management burden that is often not realised until the first annual report cycle when the borrower is already in breach of its reporting obligations. More management time, external audit costs, and consultant costs related to DFI reporting should be budgeted by Nigerian businesses using the facility for the first time.

RESTRICTIONS ON DIVIDENDS AND RELATED-PARTY TRANSACTIONS

Restrictions on dividends and related-party transactions are typically contained in financial covenants in the loan facility agreements. Those restrictions protect the lender and they prevent value being stripped from the borrower in ways that impair its ability to service its debt obligations but they also have big commercial implications for borrowers and their shareholders.

These are some of the restrictions that Nigerian borrowers should pay attention to: dividend lock-up provisions – which may stop dividend payments entirely or limit them to a percentage of distributable profits; related-party transaction restrictions – typically, DFI approval is required for all transactions between the borrower and its affiliates that exceed a certain threshold; restrictive capital expenditure rules that may prevent the borrower from making new investments without lender consent; and they place restrictions on debt incurrence that prevent the borrower from taking on additional financial indebtedness above some level.

Read the full update or download the PDF here.

Embedded Finance in Nigeria – What Every Bank-Fintech Partnership Needs

Emmanuel Amadi — Wed, 13 May 2026 10:57:31 +0000

By integrating financial services products into non-financial platforms and business models, embedded finance is changing the Nigerian financial services landscape faster than the regulatory and legal frameworks that govern it. Several banks are distributing financial products through digital channels using FinTech. The fintechs are leveraging bank APIs to deliver services that were once available only to licensed financial houses. Retailers, logistics companies and software companies are integrating payments, lending and insurance into their customer experiences.

This has huge commercial potential. Legal risks are also real and not adequately managed in most bank-finance partnership arrangements we review. Five key legal requirements that every embedded finance partnership in Nigeria must meet before the arrangement goes live are laid out in this article.

REGULATORY APPROVALS

The CBN must sign off on every bank-financed arrangement in Nigeria. As well as the Central Bank of Nigeria’s framework for the regulation and supervision of FinTech companies and its guidelines on third-party service provider arrangements, there are bank-finTech partnerships that operate outside these requirements and are subject to regulatory sanctions for both parties.

Before any embedded finance arrangement is structured, the key regulatory questions are: Should it have its own CBN license for what it does in the partnership, or is it using the bank’s license? When is the bank authorised to operate the FinTech? So has the arrangement been disclosed to the CBN as required by those guidelines? Which party has ongoing reporting obligations in relation to embedded finance activity?

A partnership agreement that leaves these questions unanswered or that fails to get regulatory approvals does not create regulatory exposure. It may also be unenforceable in Nigerian law if it requires either party to do something that is not permitted by its licence.

LIABILITY ALLOCATION

The most commercially sensitive and often overlooked element of bank-finance partnership agreements in Nigeria is liability allocation. Whether or not a transaction fails, a customer is damaged, or a regulation is broken, the question of who pays has to be settled before the event, not during it.

So the specific liability scenarios that need to be covered in every embedded finance partnership agreement are: technology failures; who is liable for system downtime, failed transactions and data errors that affect customers? Who is responsible for customer harm caused by embedded financial products? AML/KYC failures; Who should be vetting the customer and checking that the transaction is not being used for money laundering or terrorist financing? If the embedded finance arrangement breaches CBN guidelines; who pays the regulatory and financial costs?

The right answer to each of these depends on who controls the technology, interacts with customers, holds the license, and can prevent the failure. Not acceptable is an agreement that is silent on these questions or that places liability resolution in a post-event dispute process.

DATA SHARING & NDPA COMPLIANCE

Embedded finance relationships necessarily involve sharing customer financial and personal data between the bank and the non-financial platform. All such sharing is governed by the Nigeria Data Protection Act 2023 (NDPA) and specifically facilitated by the CBN’s Operational Guidelines for Open Banking in Nigeria (2023) which states a clear legal basis before the partnership launches and each data sharing arrangement must have a legal basis before the partnership goes live.

Specifically, embedded finance partnerships require a lawful basis for each type of data shared – consent, contract, legitimate interest, or other basis appropriate to the data and sharing arrangement; a data processing agreement between the bank and the FinTech outlining the processing, security requirements, data retention, and obligations in case of data breach – the bank will be a data controller for regulatory reasons, but the contractual relationship must be clear; and a customer disclosure framework that informs customers at the point of engagement what data will be shared and used under the arrangement.

In embedded finance arrangements data ownership becomes a commercial issue as well as a regulatory one. Data generated by embedded finance is of great commercial use – for product development, credit risk assessment, and targeted offers. Clauses regarding who gets to own, use, and commercialise the data are among the most commercially critical elements of any bank-finance partnership agreement.

Read the full update or download the PDF here.

Nigerian Lending – Perfection. Banks and Borrowers Keep Making These 5 Mistakes

Colin Egemonye — Wed, 15 Apr 2026 10:37:52 +0000

There is no loan facility stronger than the security that underlies it. Any bank that doesn’t properly secure its assets is not a secured creditor. And a borrower that does not understand its perfection obligations might find that its representations to its lender were false. These are five security perfection mistakes we see often and every party involved in a Nigerian credit transaction needs to know about them.

Unregistered Charges at the CAC

Charges by a Nigerian company over its assets must be registered with the CAC within 90 days under the Companies and Allied Matters Act 2020. An unregistered charge is void against a liquidator, administrator, or any other creditor, so the secured lender is essentially on par with all other unsecured creditors in an insolvency or enforcement situation.

We know this is a requirement, but it is often not met, especially in transactions where several parties move very quickly, where the borrower’s lawyers are doing all the perfecting without the lender being involved in the process, or where post-closing perfection undertakings are given but never enforced.

A documented perfection checklist, under lender counsel supervision, with CAC registration evidence gathered and verified before drawdown – that’s the solution. The principle is simple: There is no registration and there is no drawdown.

Missed or Incorrect Stamp Duty

Loan agreements, debentures and mortgages in Nigeria are subject to Stamp Duty. In Nigerian courts, an unstamped or inadequately stamped document is not admissible as evidence. The document does not disappear; the parties remain obligated to each other. It removes the possibility that those obligations can be enforced in courts.

In many cases, the stamp duty position on complex instruments such as debentures with multiple asset classes, syndicated facilities with multiple lenders, and cross-border security packages is not clear, and Nigerian stamp duty law has not kept up with the pace of modern lending transactions. Lenders and their advisers should not rely on precedent or think that what was accepted in a previous transaction will be accepted here. Specific advice on the position of each instrument before execution is the standard.

DEFECTIVE DEBENTURES

Debentures with defects create both fixed and floating charges on a company’s assets. But the scope and enforceability of those charges depends entirely on how the debenture is written – and badly written debentures are very common in Nigerian lending transactions.

The most common defects are:

It fails to mention the asset classes that bear the primary security value.
Use of ambiguous descriptions of charged assets.
Not including important provisions for the crystallization of the floating charge into a fixed charge.

Debenture provisions that violate the company’s articles of association are unlikely to be fit for purpose. That goes for FinTechs, technology companies and businesses whose assets are intangible.

Read the full update or download the PDF here.

CBN Fintech Licensing 2026 – It’s The Nigerian Founder Who Keeps Confusing The World With Their 3-Licenses

Colin Egemonye — Fri, 10 Apr 2026 08:53:01 +0000

Most FinTech founders are aware they need a Central Bank of Nigeria license. But very few know which one to apply for – and the difference between applying for the wrong license and the right one is huge. A rejected application, wasted time, and regulatory exposure – and sometimes even a breach of existing commitments to clients and investors – are all examples of wasted time and regulatory exposure.

And in 2026, the revised payments framework makes the distinctions between license categories easier to understand and the consequences of operating in the wrong category more severe. Here are the three most commonly confused license categories for Nigerian FinTechs and the key questions to ask when choosing one.

License Category 1: Mobile Money Operator (MMO)

FinTechs that sell mobile wallet services and e-money directly to end users need a mobile money operator license. In an MMO, customers load money onto their wallets, which are held in trust by the MMO and are returned on demand.

Key characteristics:

You are providing direct financial services to consumers.
You hold customer funds temporarily or in trust.
Your product involves issuing or redeeming e-money.
You are responsible for full KYC and anti-money laundering obligations for your end users.

Currently, the minimum capital requirements for Tier 1 MMO licenses is N2 billion. This makes the MMO licence unobtainable for most early-stage FinTechs and many opt for the PSSP route instead – though their product technically needs an MMO licence.

License Category 2: Payment Solution Service Provider (PSSP)

So a Payment Solution Service Provider (PSSP) is an independent payment Solution Provider.

Those who provide payment infrastructure, gateway, and processing services mainly to merchants require a payment service provider license. And a PSSP does that without storing customer money the way an MMO does.

Key characteristics:

KeepsThe key difference between an MMO and a PSSP is that you are providing financial services to end consumers (MMO) versus payment infrastructure to businesses (PS).
Your KYC and AML obligations are for your merchant clients, not for the end consumers making payments through your platform.

There are many Nigerian FinTechs that have product features that have quietly moved them into the MMO territory without needing a license change.

Read the full update or download the PDF here.

Goldsmiths Solicitors – Legal Recap for the Year 2025

Colin Egemonye — Fri, 19 Dec 2025 12:27:42 +0000

Introduction

2025 was a very exciting year and saw significant changes in Nigeria’s legal and regulatory landscape. Series of laws were enacted by the National Assembly and regulatory guidelines were also issued by regulators including the Central Bank of Nigeria, Federal Competition and Consumer Protection Commission, the Nigerian Communications Commission, etc. There were also some important judicial decisions from the courts in Nigeria which shaped the legal and regulatory space in the country. This recap is divided into four parts representing the four quarters of the year, highlighting what we think are the most impactful laws and regulations, reforms, and judicial decisions in 2025.

1st Quarter (January – March 2025)

The first quarter was significantly marked by the issuance of guidelines and regulations from regulators and key judicial decisions by the courts. The Central Bank of Nigeria issued guidelines to suspend the extension of export proceeds and also announced the approval of the Nigerian Foreign Exchange (FX) Code. Key decisions which shaped the tax landscape and also affirmed the multi-sectoral regulatory authority of the Federal Competition and Consumer Protection Commission 9FCCPC) were delivered by the courts. The Investment and Securities Act, 2025 was also signed into law by the Nigerian President.

• The implementation of the Deduction of Tax at Source (Withholding) Regulations, 2024 began on 1st January 2025 requiring corporate entities, statutory bodies, public authorities, etc. to deduct withholding tax at source from 1st January 2025.
• On 8 January 2025, the Central Bank of Nigeria (CBN) issued a circular on the Suspension of Extension of Exports Proceeds on Behalf of Exporters for the immediate suspension of approvals for the extension of repatriation of export proceeds on behalf of exporters mandating that proceeds for non-oil exports must be repatriated and credited to the exporters’ domiciliary accounts within 180 days and for oil and gas exports, within 90 days from the date of the bill of lading.
• On 11th January 2025, the Presidential Enabling Business Environment Council announced that it would establish commercial courts and Ease of Doing Business Councils across all 36 states and the Federal Capital Territory as part of its effort to improve the country’s business climate.
• On 22nd January 2025, the CBN announced the approval of the Nigerian Foreign Exchange (FX) Code as a guideline to the banking industry to promote ethical conduct of Authorised Dealers in the Nigerian Foreign Exchange Market.
• 0n 24 January 2025, in a circular titled “Waiver of Non-Refundable Annual License Renewal Fee for Existing Bureaux De Change”, the CBN announced the waiver of payment of annual renewal fee for existing bureau de change (BDC) operators due to transition into the new BDC regulatory structure required by CBN.
• On 27 January 2025, the Federal High Court (FHC) in the appeal between Federal Inland Revenue Service v. MTN Nigerian Communications Plc (FHC/L/1A/2024), set aside the judgement of the Tax Appeal Tribunal (TAT) which awarded the sum of $71 million against MTN while declining the reliefs for penalties and interest sought by FIRS. The FHC increased the liability and ordered MTN to pay $87.9 million as penalties and interest.
• On 28 January 2025, the Collective Management Regulations, 2025 was issued by the Nigerian Copyright Commission and repealed the Copyright (Collective Management Organisation) Regulations, 2007. The Regulations provide for the approval and supervision of companies seeking to operate as a Collective Management Organisation (CMO) and their relationships with users and other CMOs, etc. The Regulations impose administrative fines ranging from N200,000 t0 N500,000 for unethical practices and non-compliance with the Regulations. Other sanctions include caution, suspension or disqualification.
• On 3 February 2025, the National Pencom Commission issued the Revised Circular on the Operations of Branch Offices and Service Centres by Licensed Pension Fund Administrators. The circular was issued to give effect to section 72 of the Pension Reform Act, 2014 and provides the metrics for requiring the opening and operation of branches and service centres by Pension Fund Administrators in Nigeria.
• On 7 February 2025, the Federal High Court in Emeka Nnubia v. Minister of Industry, Trade and Investment, Federal Competition and Consumer Protection Commission & Anor in Suit No: FHC/L/CS/1009/2024 affirmed the Federal Competition and Consumer Protection Commission (FCCPC) as the primary regulator for competition and consumer protection issues in all sectors in Nigeria including the telecommunications sector.
• On 12 February 2025, the Federal Ministry of Interior issued a circular on the Review of Approving Authority for Expatriate Quota and Citizenship Applications. The review was done to enhance transparency and accountability in the administration of Expatriate Quota and Citizenship applications.
• On 4 March 2025, the first Mobile Virtual Network Operator (MVNO) to be licensed by the Nigerian Communications Commission (NCC) launched and commenced operations in Nigeria.
• On 13 March 2025, the Court of Appeal in Kuda Microfinance Bank Ltd v. Amarachi Kenneth Blessing (CA/EK/48/2024) held that a bank may lawfully restrict a customer’s account upon receiving reports of fraudulent or suspicious activity without the need to first obtain a court order.
• On 20 March 2025, the Nigeria Data Protection Commission issued the Nigeria Data Protection Act General Application and Implementation Directive, 2025 (hereinafter “the GAID). The GAID was issued to provide clarity and practical guidance on the implementation of the NDPA. It repealed the Nigeria Data Protection Regulation, 2019 and the Nigeria Data Protection Regulation Implementation Framework, 2020.
• On 29 March 2025, the Nigerian President, signed the Investment and Securities Act, 2025 into law. The Act repealed the Investment and Securities Act, 2007 and it is aimed at strengthening the legal and regulatory framework for investments and capital market activities in Nigeria. The Act classified exchanges into composite and non-composite exchanges and also legally recognised virtual assets bringing an end to the uncertainty concerning transacting virtual assets in Nigeria.

2nd Quarter (April – June 2025)

The second quarter saw a lot of regulatory actions from regulators in the exercise of their regulatory powers and functions. Laws were also enacted in this quarter. The Securities and Exchange Commission issued a circular on the transmutation of executive directors and the Nigerian Immigration Service (NIS) issued guidelines for the purpose of implementing e-visa system, automated landing and exit cards in Nigeria. Four Nigerian tax laws were enacted to unify tax laws and revolutionize tax collections and enforcement in Nigeria.

• On 6 April 2025, the Registrar General of the Corporate Affairs Commission, announced the launch of an AI-driven Intelligent Company Registration Portal (ICRP) to revolutionize business registration in Nigeria and improve ease of doing business in Nigeria.
• On 25 April 2025, the Competition and Consumer Protection Tribunal upheld the $220 million penalty imposed on Meta platforms Incorporated (Facebook and WhatsApp) by the Federal Competition and Consumer Protection Commission (FCCPC) for data discriminatory practices in Nigeria and ordered for the payment of $35,000 as reimbursement for FCCPC’s investigation expenses. Part of the orders made by the Tribunal against Meta Platforms Incorporated include to immediately reinstate the rights of Nigerian users to determine how their data is shared and submit a compliance letter by 1 July 2025.
• On 2 May 2025, the Nigerian Immigration Service released the Guidelines for the Implementation of the e-Visa Application System and Automated Landing and Exit Cards. The Guidelines introduced e-visa which replaced visa on arrival. The e-visa application system also introduced thirteen (13) short-visit visa categories for eligible foreign travellers and imposed penalties for overstaying visas effective from 1 September 2025. Electronic landing and exit cards were also introduced to replace the manual processes of embarking and disembarking travellers.
• On 29 May 2025, the Nigerian President approved the establishment of the National Credit Guarantee Company Limited (NCGC) and the appointment of its board and management team. The NCGC is backed with an initial capital of N100 billion for the purpose of expanding access to finance for Micro, Small and Medium Enterprises (MSMEs), manufacturers, large businesses, etc. across Nigeria.
• On 11 June 2025, the Lagos State Electricity Regulatory Commission (LASERC) issued Order No. LASERC ORDER/001/2025 establishing the regulatory framework for electricity market operations within Lagos State. The issuance of the Order marked the conclusion of the transition for transfer of regulatory oversight from Nigerian Electricity Regulatory Commission to LASERC. The Order requires individuals and entities to obtain licenses from LASERC to legally undertake regulated electricity activities within Lagos State.
• On 17 June 2025, the Corporate Affairs Commission (CAC) announced the review of its service fees effective from 1 August 2025. The fees for company incorporation and post-incorporation services were therefore reviewed upward. The implementation date was also subsequently postponed to 1 October 2025.
• On 19 June 2025, the Securities and Exchange Commission (SEC) issued the Circular to All Public Companies and Capital Market Operators on the Transmutation of Independent Non-Executive Directors and Tenure of Directors. SEC directed the immediate discontinuance of the transmutation of Independent Non-Executive Directors (INEDS) into Executive Directors within the same company or its group structure by public companies and significant capital market operator. SEC also introduced a 3-year cool off period for Chief Executive Officer or Executive Director upon stepping down from a company before being eligible for appointment as Chairman.
• On 26 June 2025, the Nigeria President signed four tax reform bills into law. The four laws are: the Nigeria Tax Act 2025, the Nigeria Tax Administration Act 2025, the Nigeria Revenue Service (Establishment) Act 2025, and the Joint Revenue Board (Establishment) Act 2025. The Acts repeals certain tax laws and also reduced the multiplicity of taxes with the aim harmonising tax collection and enhancing the ease of doing business in Nigeria.
• On 30 June 2025, the Nigerian President ordered the temporary suspension of the implementation of the Financial Reporting Council (Amendment) Act, 2023 which imposed new annual dues on large private companies classified as Public Interest Entities.

3rd Quarter (July – September 2025)

The third quarter was also significantly marked by regulatory actions through issuance of Guidelines and regulations. Sanctions and penalties were also imposed for regulatory breaches. The Federal Inland Revenue Service (FIRS) announced the discontinuance of the issuance of tax exemption certificates. The Nigerian Communications Commission issued a license framework for licensing and regulating international Application to Person (A2P) messaging in Nigeria.

• On 6 July 2025, the Nigeria Data Protection Commission (NDPC) imposed a fine of N766,242,500 on Multichoice Nigeria who are the owners of DSTV for breaching the Nigerian Data Protection Act through unlawful cross-border data transfers and violation of Nigerian data subjects’ personal data.
• On 8 July 2025, the Nigerian Communications Commission (NCC) issued the License Framework for International Application to Person (A2P) Messaging in Nigeria. The framework was issued by NCC in a move to regulate Application to Person services in Nigeria through the introduction of the International A2P Messaging Aggregator License.
• On 25 July 2025, the Federal Competition and Consumer Protection Commission (FCCPC) issued the Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations, 2025. The regulations provide for the registration of digital and traditional money lenders with the exception of licensed microfinance banks. It also imposes obligations including filing of bi-annual and annual reports, etc. on money lenders with sanctions and penalties provided for the breach of any of the provisions of the Guidelines.
• On 29 July 2025, the Federal Inland Revenue Service (FIRS) in a public notice announced the discontinuance of issuance of tax exemption certificates to all taxpayers including pioneer status companies, non-governmental organisations and free zone entities. Subsisting tax exemption certificates would not be renewed by the FIRS.
• On 30 July 2025, the National Insurance Commission (NAICOM) issued the Guidelines for Insurtech Operations in Nigeria. The Guidelines became operational on 1 August 2025 providing a regulatory framework for the safe and responsible deployment of Insurtech solutions by licensed insurance operators. The Guidelines provide the minimum capital requirements for Insurtech operators as well as the permissible and non-permissible activities.
• On 5 August 2025, the Nigerian President, signed the Nigerian Insurance Industry Reform Act, 2025 into law. The Act repealed the Insurance Act 2003 and consolidated several insurance laws including the Marine Insurance Act, Motor Vehicles (Third Party Insurance) Act, etc. into a unified and streamlined legal framework for the insurance industry. It also revised the minimum capital requirements for insurance companies across various insurance categories to reflect a risk-based capital approach in alignment with current international standards and practices.
• On 6 August 2025, NCC announced the release of the Guidelines on Corporate Governance, 2025. The Guidelines are applicable to all communication companies in Nigeria and provides for the composition of the board of directors, board committees and appointment processes, etc.
• On 16 September 2025, the Central Bank of Nigeria (CBN) issued a circular on the Appointment and Announcement of Successors to Managing Director. The CBN requires Payment Service Banks (PSBs) to obtain the regulatory approval of the CBN of the successor of a Managing Director (MD/CEO) no later than six months to the expiration of the tenure of the incumbent MD/CEO.
• On 18 September 2025, the Federal Government issued a directive mandating all mining and quarrying companies licensed since 2024 to finalize their Community Development Agreements with host communities before 31 December 2025.
• On 21 September 2025, the Minister of Solid Minerals Development announced the revocation of 1,263 mineral licenses in Nigeria following failure by the licensees to comply with the mandatory payment of their annual service fees.
• On 29 September 2025, the National Pension Commission (PENCOM) issued a circular which reviewed the minimum capital requirement for Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs). The circular directs PFAs to increase their capital base to 20 million Naira from 5 million Naira while PFCs are to increase their capital base to 25 billion Naira from 2 billion Naira.

4th Quarter (October – December 2025)

Key regulatory activities especially in the Nigerian financial services and oil and gas sectors occurred in the fourth quarter. The Central Bank of Nigeria (CBN) issued guidelines to regulate agent banking activities in Nigeria. A draft Guidelines for handling Authorized Push Payment Fraud was also issued by CBN to preserve the integrity of Nigerian payment system. The Nigerian Investment Promotion Commission also put a stop to applications for Pioneer Status Incentive in view of the Economic Development Tax Incentive (EDTI) to commence from 1 January 2026.

• On 6 October 2025, the Central Bank of Nigeria (CBN) issued the Guidelines for the Operation of Agent Banking in Nigeria. The Guidelines provides for the permissible and non-permissible agent banking activities, appointment of agents, agent qualification and due diligence requirements, rules on agents’ locations and geo-tagging of agents’ devices, etc.
• On 9 October 2025, CBN issued the Exposure Draft Guidelines on the Operations of Automated Teller Machines (ATMs) in Nigeria to provide additional guidance on the operation of ATMs and provide clarity of security requirements of ATMs, resolution of failed transactions, etc.
• On 10 November 2025, the Nigerian House of Representatives ad hoc committee on the economic, regulatory and security implications of cryptocurrency adoptions and Point of Sale Operations discussed the opportunities, challenges and future of Nigeria’s digital finance ecosystem with cryptocurrency operators and digital asset innovators.
• With effect from 10 November 2025, the Nigerian Investment Promotion Commission (NIPC) stopped receiving applications for Pioneer Status Incentive in a bid to fully transition to the new Economic Development Tax Incentive (EDTI) scheme which will take effect from 1 January 2025.
• On 13 November 2025, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) announced the suspension of the proposed 15 percent import duty on Premium Motor Spirit (PMS) and Automotive Gas Oil (AGO) which was initially approved by the President and announced by the NMDPRA on 21 October 2025.
• On 26 November 2025, the Securities and Exchange Commission (SEC) directed all capital market operators to state their compliance level and ensure that all tradable instruments are registered in line with the newly enacted Investments and Securities Act, 2025 no later than January 2026.
• On 26 November 2025, CBN issued the Draft Guidelines for Handling Authorised Push Payment Fraud. The draft Guidelines provides for reporting APP fraud, resolution and reimbursement and the roles of financial institutions in preventing, detecting and mitigating APP fraud. The Guidelines also mandates financial institutions to have an APP Fraud Policy and implemented by the Boards of financial institutions.
• On 28 November 2025, the Nigeria President approved the establishment of the National Tax Policy Implementation Committee to oversee the implementation of Nigeria’s newly enacted tax laws which would take effect from 1 January 2025.
• On 1 December 2025, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) launched the 2025 oil licensing round through digital bids of the 50 oil and gas blocks approved for bidding. The oil licensing round is expected to deepen investment in the Nigerian upstream sector.
• On 10 December 2025, the Joint Revenue Board (formerly Joint Tax Board) placed a nationwide ban on road taxes, levies and related charges in a bid to sanitize Nigeria’s tax administration and improve the ease of doing business.

Conclusion

2025 has been a remarkable year of significant changes and reforms in Nigeria’s legal and regulatory landscape. Key regulatory guidelines and regulations were introduced by regulators including the Central Bank of Nigeria, the Federal Competition and Consumer Protection Commission, the Nigeria Data Protection Commission, etc. The CBN introduced the guidelines for agent banking to regulate agent banking activities. The CBN guidelines for handling APP fraud was also issued to preserve the integrity of the financial services sector. The Nigerian tax landscape was also reshaped with the enactment of four new tax laws which repealed some existing tax laws and consolidated several tax laws. The Investments and Securities Act, 2025 ushered in a new regime for the recognition of virtual assets. Key judicial pronouncements were also made by the courts. The Competition and Consumer Protection Tribunal imposed fines on Meta Platforms incorporated for violating the Nigeria Data Protection Act and unlawful cross-border transfer of data of Nigerian data subjects. The Court of Appeal also delivered a judgement authorizing financial institutions to freeze customers’ bank accounts on suspicion of fraudulent activities without the need to first obtain a court order.

As we approach the new year, we extend our sincere gratitude to all our clients for their continued trust in us and wish you a Merry Christmas and a prosperous New Year 2026.

Please note that the contents of this Article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com or contact:

Contracting in the Digital Finance Ecosystem: How to Manage Legal Risks in Nigerian FinTech Partnerships

Colin Egemonye — Thu, 11 Dec 2025 07:51:26 +0000

Introduction

The emergence and continued growth of Financial Technology (FinTech) companies in the Nigerian financial services sector has redefined how financial services are delivered, with technology driven solutions that enable faster payments, lending and wealth management. These innovations often lead to complex collaborations between FinTech startups, traditional banks and third-party service providers. These partnerships may inevitably expose the parties to legal and regulatory risks if not properly managed.

As FinTechs and banks increasingly depend on one another to provide innovative financial solutions, products and services to customers, poorly drafted agreements can expose the parties to regulatory breaches, penalties, data protection violations, commercial disputes, etc. To manage legal risks in FinTech contracts, the contracting parties must first conduct thorough legal and other due diligence on prospective partners, establish a robust compliance framework, and develop a robust partnership agreement that allocates roles and responsibilities and anticipates potential risks.

Nature of FinTech Partnerships

FinTechs do not operate in a vacuum. They depend on strategic partnerships/collaborations to launch and provide their products and services to customers. Partnerships and collaborations enable FinTechs that may not hold the necessary financial license from the Central Bank of Nigeria (CBN) to partner with licensed financial institutions so as to leverage its financial license to provide products and services to customers.

Through collaborations and partnerships, FinTechs are for example able to provide services to e-commerce platforms offering point-of-sale lending or payment processing for e-hailing providers or sharing infrastructure such as Application Programming Interface (API) with other technology service providers who require it.

Legal Risks in FinTech Partnerships

Partnerships and collaborations stimulate innovation in the FinTech industry but can also expose parties to unique legal, regulatory, reputational and operational risks. The success or failure of a FinTech partnership often depends on how well these risks are identified, allocated and addressed within a contract. Below are some of the most common legal risks that arise from such partnerships.

1. Regulatory Risk: FinTech product offerings in Nigeria such as payment processing, digital lending, crowdfunding, and wealth management are all regulated by specific regulatory agencies including the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) under specific license categories with terms and conditions attached to each license category. Regulatory approvals are usually required for most partnerships before a financial institution can legally enter into any such partnerships. Failure to obtain the appropriate regulatory approval for proposed partnerships may result in regulatory sanctions and penalties including fines, revocation of license, etc.

2. Data Protection and Cybersecurity: Fintech operations are heavily data driven, involving the collection and processing of sensitive personal and financial information. Under the Nigeria Data Protection Act 2023 (NDPA), both parties in a partnership may qualify as joint data controllers or processors, sharing equal responsibilities for compliance. A data breach affecting one party can expose both to liability, enforcement actions by the Nigeria Data Protection Commission (NDPC), and reputational damage.

3. Intellectual Property and Technology Ownership: Most FinTech solutions depend on proprietary software, mobile applications, and digital interfaces. Disputes may arise over ownership of intellectual property developed or used during a partnership, especially when one party customizes a platform or co-creates a product, if intellectual property is not properly protected and ownership defined.

4. Liability and Risk Allocation: When digital transactions fail due to systems failure or downtime, unauthorised transfers, or service interruptions, customers may suffer losses. The question then arises: who bears the liability? If not properly defined, both parties could be held jointly and severally responsible under consumer protection or other laws. There is therefore a need to include clear indemnity provisions, caps on liability, and mechanisms for loss allocation in any contract.

5. Consumer Protection and Dispute Resolution: Fintech partnerships often involve multiple parties receiving or processing customers’ transactions, making accountability complex when issues arise. Consumers protection regulations require that consumers know which entity is responsible for handling their complaints. Agreements should define the customer-facing entity, procedures for addressing complaints, refund obligations, and timelines for resolution. Establishing a clear dispute resolution process whether internal escalation, mediation, or arbitration helps preserve business relationships and avoid reputational damage.

6. Cross-Border and Jurisdictional Issues: Some partnerships involve cross-border data transfers or offshore service provision. In such cases, questions may arise regarding applicable laws, tax, jurisdiction, dispute resolution and enforcement of judgments. It is therefore advisable that the governing law, jurisdiction, mechanisms for settling disputes and enforcing foreign arbitral awards or judgments be clearly specified.

Essential Tips for Managing Legal and Regulatory Risks in FinTech Partnerships

Effectively managing legal and regulatory risks in FinTech partnerships/collaborations begin with having a contract that clearly sets out the rights and responsibilities of the parties. While regulations may provide the overall compliance framework, the contract is usually what sets out responsibilities, clarifies liabilities, and ensures both parties operate within legally acceptable limits. A clearly set out agreement not only protects the parties but also signals to regulators that the relationship is grounded in proper governance and accountability. Below are some essential tips for managing legal and regulatory risks that may arise from partnerships in the FinTech services sector:

A. Choose the Right Contract Type: FinTech projects and services may require different types of contracts and agreements to formalize relationships and transactions. Service Level Agreements (SLAs) set the quality and performance standards of any FinTech service, like availability, reliability, security, compliance, as well as the penalties and remedies for any breaches. Data Sharing Agreements (DSAs) detail the terms of how data is collected, stored, processed, and shared between the parties. Software Licensing Agreements (SLAs) grant the rights and obligations of using a FinTech software or platform, such as scope, duration, fees, and limitations. Lastly, Partnership Agreements (PAs) establish the roles, responsibilities, contributions, and benefits of each part to a FinTech collaboration or joint venture. Additionally, they define the governance, decision-making, dispute resolution, and termination mechanisms of the partnership. It is important to understand the nature of the FinTech project, the parties involved, and the regulatory environment, as these factors determine which agreements are necessary, their specific terms, and how they should be structured to protect all stakeholders and ensure legal and operational compliance.

B. Use Clear and Concise Language: Like in all contracts, one of the most important aspects of managing FinTech contracts and agreements is to use clear and concise language that leaves no room for ambiguity or misinterpretation. It is advised to consistently use accurate terminologies, definitions and references throughout the contract to ensure easy reading, understanding and interpretations.

C. Constant Review and Update of Agreements: FinTech agreements should be regularly reviewed and updated to ensure that they reflect current trends, future needs and expectations of parties and customers and that they also align with any regulatory or policy changes introduced from time to time by the regulators. There is also a need to keep abreast with technological developments and innovations in the FinTech ecosystem to ensure that contracts are updated to incorporate service provision with the use of advanced and innovative technology.

D. Seek Professional Advice and Support: Managing FinTech contracts can be challenging, especially if the parties do not have expertise or did not consult experts to deal with the legal, technical, or business aspects of the partnership arrangements. The best approach to avoiding potential pitfalls is to from the outset, seek assistance from professionals who can support and seamlessly guide through the process of negotiating, contracting, interpreting and enforcing these agreements.

In summary, a well-structured FinTech contract should amongst others specify which party bears regulatory responsibility for compliance; how customer data is stored, shared, managed and protected; how revenue, risk, and liability are allocated and shared; termination, jurisdiction, dispute resolution, etc. Without these, fintech relationships could easily breakdown and lead to regulatory breaches, contractual disputes, and reputational damage for parties. In essence, the contract is not merely a record of collaboration, it is the foundation that sustains trust, compliance, and operational success in FinTech partnerships.

Conclusion

As the FinTech industry in Nigeria continues to grow, strategic partnerships will continue to play increasingly pivotal role for FinTech companies seeking to scale their operations and penetrate new markets. This collaborative approach allows FinTechs to accelerate their growth while minimizing the risks and challenges typically associated with scaling and/or market entry.

FinTech partnerships are essential to driving innovation, inclusion, and competitiveness in Nigeria’s financial ecosystem. Without robust legal and contractual foundations, these partnerships can expose parties to significant regulatory, legal, operational, and reputational risks. Effective contracting in the digital finance ecosystem requires more than just template agreements. Well-structured contracts are not merely instruments of protection; they are robust tools for innovation and trust in the future of digital finance.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com or contact:

New Rules for Agent Banking in Nigeria

Colin Egemonye — Fri, 24 Oct 2025 13:46:00 +0000

On 6 October 2025, The Central Bank of Nigeria (CBN) issued the Guidelines for the Operations of Agent Banking in Nigeria (the “Guidelines”). The purpose of the Guidelines is the provision of the minimum standards for the regulations and operations of agent banking in Nigeria. They provide for the responsibilities and obligations of the parties to agent banking relationships and the general operational rules which must be adhered to by the parties in an agent banking relationship. The Guidelines became operational immediately upon its issuance on 6^th October 2025, however, the requirement for payment terminal devices such as Point of Sale (POS) devices to be geo-fenced or tagged is scheduled to be operational from 1^st April 2026.

Agent banking entails the provision of financial services by a third party (Agents) to customers on behalf of a licensed deposit-taking financial institutions (Principals).

This article therefore provides an overview of some of the key provisions of the new Guidelines.

Scope of Permissible Agent Banking Activities

The activities which are allowed or prohibited under agent banking relationships are set out in the Guidelines. Some of the activities that are permitted under agent banking are cash deposits and withdrawals, facilitating bill payments, local currency funds transfer services, providing account opening forms on behalf of principal, facilitating cheque book request and collection, etc.

Super Agents and Agents are however prohibited from carrying out banking services including account opening, loan underwriting, investment and foreign exchange services.

Agent Banking Arrangements

Agent banking arrangements or relationships could involve two or three parties as the case may be. Agent banking relationship could involve the Principal and the Agents or where the relationship is tripartite, include a Super Agent as an intermediary between the Principal and Agents.

The Principal is a duly licensed deposit-taking financial institutions authorized to carry out agent banking activities; the Super Agent is an incorporated entity licensed to carry out the activities of recruiting, aggregating and managing Agents, while Agents are individuals or non-individual entities appointed by Principals or Super Agents to carry out agent banking activities.

An agent banking relationship is formalized when a financial institution enters into an agent banking agreement with an Agent for the purpose of providing any of the permitted agent banking activities. An Agent cannot be engaged by more than one financial institution to provide agent banking services or be under more than one network of Super Agent at a time.

Mandatory Regulatory Requirements for Appointment of Agents

Financial institutions and Super Agents have very strict regulatory obligations in the appointment of Agents to provide permitted agent banking services to customers. These regulatory requirements are to be met by financial institutions or Super Agents prior to the appointments of Agents. The regulatory requirements include obtaining satisfactory documentations from Agents such as certificate of incorporation with the Corporate Affairs Commission (CAC), particulars and Bank Verification Numbers (BVN) of directors/promoters etc., conducting enhanced due diligence on Agents, and carrying out risk assessment obligations on Agents prior to their appointment and onboarding. The risk assessment could be carried out directly by the financial institution or through a Super Agent.

Use of Dedicated Agent Accounts

Transactions by Agents within the scope of the permitted activities are required to be performed through a dedicated account or wallet maintained with the Principal and the POS device provided to the Agent shall be linked with the account or wallet only. Performance of transactions outside the dedicated account or wallet is a violation which attracts sanctions including liability for any misconduct or fraud arising from the transaction, termination of the agent banking agreement and blacklisting of the Agent.

List of Agents and Locations

Financial institutions are to publish a list of their Agents on their website. Each branch of the financial institution is also required to display the list of its Agents within its locality.

Agents are only allowed to provide agent banking services within their approved locations and may not relocate, transfer or close their operations at the approved locations without prior notification to the financial institution and/or Super Agent.

To prevent Agents from operating at multiple locations, devices provided to Agents in providing agent banking services must be geo-fenced or tagged to the operate only within the agreed registered Agent location. The requirement for the devices to be geo-fenced or tagged will take effect from 1^st April 2026.

Operational and Transactional Limits

Financial institutions are required to provide operational and transactional limits for Agents in line with the Guidelines and ensure that the limits are not exceeded in the provision of agent banking services. Accordingly, the mandatory transaction limits set by the Guidelines include N100,000 daily limit and N500,000 weekly limit for deposits and withdrawals. A daily and weekly limit of N100,000 apply to bill payments.

Sanctions and Penalties

The CBN may direct financial institutions to take remedial or corrective actions including taking actions that it may deem appropriate against erring Agents or terminating the Agent Banking Agreement. CBN may also impose sanctions and penalties against financial institutions, Super Agents and/or Agents as the case may be. The sanctions which CBN may impose include:

Suspension or prohibition from further engagement in agent banking business
Prohibition from onboarding new agents
Suspension or removal of the Board, Management and officers of the Principal
Revocation of agent banking approval
Revocation of operational license.

Conclusion

The issuance of the new Guidelines by CBN is to ensure the regulation of the operations of agent banking in Nigeria. Agents are restricted to transact only the permitted business activities within their approved locations. The devices of Agents are to be geo-fenced or tagged to prevent Agents from operating from multiple locations. Agent banking arrangements are to be formalized with the execution of agent banking agreements upon the satisfactory review of the documentations, conduct of enhanced due diligence and risk assessments. CBN has the power to direct financial institutions who are Principals in agent banking arrangements to take remedial or corrective actions, however, CBN has extensive powers to impose administrative penalties and sanctions on erring Principals and Super Agents.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com or contact:

How Virtual Assets Service Providers (VASPs) Can Obtain Licenses in Nigeria

Colin Egemonye — Tue, 26 Aug 2025 09:51:03 +0000

With the enactment of the Investment and Securities Act (ISA) 2025, virtual assets/digital assets including cryptocurrencies, Non-Fungible Tokens (NFTs), etc. can now be legally traded and transacted in Nigeria subject to satisfying applicable legal requirements.

Prior to the enactment of the ISA, the legality of trading or transacting in virtual/digital assets was uncertain especially following the Central Bank of Nigeria (CBN) circular of 2021 which directed all financial institutions to identify persons and entities transacting or operating cryptocurrency exchanges in Nigeria and ensure that their bank accounts are closed.

In 2022, the Nigerian Securities and Exchange Commission (SEC) issued the ‘New Rules on Issuance, Offering Platforms and Custody of Digital Assets’ (Digital Asset Rules) which set out the requirements for licensing and regulating different trading activities relating to virtual/digital assets including Virtual Assets Service Provider (VASP), Digital Assets Custodian (DAC), Digital Assets Offering Platform (DAOP) and Digital Assets Exchange (DAX) in Nigeria. Despite the issuance of these new rules by the SEC, the regulatory uncertainty on virtual/digital assets persisted until the enactment of the ISA 2025.

The SEC is the regulatory authority responsible for the registration and licensing of virtual assets including Virtual Asset Service Providers (VASPs). VASP is defined as an entity that conducts one or more of the following activities or operations for or on behalf of another person:

Exchange between virtual assets and fiat currencies;
Exchange between one or more forms of virtual assets;
Transfer of virtual assets;
Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets; and
Participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset.

Registration of VASPs is governed by the ISA 2025, Digital Assets Rules, and other applicable SEC rules and regulations.

Initial Assessment Filing and Accelerated Regulatory Incubation Program (ARIP)

All promoters of any initial digital asset offerings (including VASPs) within Nigeria or targeting Nigerians are required to comply with the SEC mandatory initial assessment filing before applying for Accelerated Regulatory Incubation Program (ARIP). To comply with the initial assessment filing, VASP promoters are required to complete and submit an assessment form and draft white paper providing the details of the digital assets offering, and information about the issuer. To fully comply with the initial assessment filing, the filing is required to be accompanied with a legal opinion providing the justifications for classifying the tokens to be sold through the digital asset offering as securities or not.

Upon the submission of an initial assessment filing, SEC would review it and notify the applicant of its eligibility to submit an application for ARIP. Participation in ARIP provides an applicant with an Approval in Principle to legally operate and provide its services in a regulated environment under supervision by the SEC. A successful participation in ARIP would entitle the applicant to apply for full registration with the SEC to provide its services to the broader public in Nigeria.

Requirements for the Registration of Virtual Assets Service Providers (VASP)

An applicant for a VASP license is required to be a company incorporated with the Corporate Affairs Commission (CAC) and must meet all the requirements stipulated by the SEC to obtain a VASP license in Nigeria. The requirements which a VASP applicant must meet include the following:

Evidence of incorporation of a local entity including Certificate of Incorporation, Memorandum and Articles of Association (MEMART) and Status Report with the Corporate Affairs Commission (CAC).
Latest audited accounts or audited statement of affairs of the company in the case of a new company.
A business model with a clear or unique value proposition.
Know Your Customer (KYC) procedures and risk management protocol.
Copies of the rules of the applicant for investor protection, conflict of interest, customer protection, dispute resolution, etc.
Evidence of sufficient financial, human and other resources for the operation of a VASP license
Evidence of appropriate security arrangements in compliance with SEC Technology Risk Management requirements.
A letter of no objection or approval letter issued to the applicant by regulator(s), where the applicant operates in other sectors.
An office in Nigeria managed by a director of the applicant company resident in Nigeria.
Sworn undertaking to maintain, keep proper records and render returns to the SEC.
Sworn undertaking to comply with applicable SEC Rules and Regulations and the Investment and Securities Act, 2005 by a director or company secretary.
Any additional requirements which the SEC may require.

Capital Requirements and Registration Fees

An applicant for a VASP license is required to have a minimum paid-up capital of N500,000,000 (Five Hundred Million Naira). The minimum paid-up capital could be bank balances, fixed assets or investment in quoted securities. A current fidelity bond covering at least 25% of the minimum paid-up capital is also required by the SEC.

The required registration fee payable to SEC for obtaining the VASP license is N30,000,000 (Thirty Million Naira). There are other fees payable to SEC for registration including application, processing and sponsored individuals’ fees.

Where the applicant complies with the registration requirements and pay the applicable registration fees, SEC may grant registration to the applicant and list the applicant in the list of its licensed capital market operators. However, the SEC may reject the application for registration if the proposed activity infringes public policy, is injurious to investors or violates any laws, rules and regulations implemented by SEC.

Conclusion

The enactment of ISA 2025 has put to rest the uncertainties surrounding virtual assets in Nigeria. This means that virtual assets are recognized in Nigeria as securities with SEC being the regulatory authority for these assets with powers to register Virtual Asset Service Providers (VASPs) and other digital assets service providers.

For a VASP to be registered, it must first submit an initial assessment filing to determine its participation in ARIP which is a form of Approval in Principle which allows the VASP to provide its services in a regulated environment under the supervision of SEC.

A successful participation in ARIP would further entitle the VASP to apply to the SEC for registration provided that it can meet the registration requirements and pay the fee stipulated by the SEC. If the SEC is satisfied it may grant registration to the applicant and list it in the list of registered capital market operators. However, SEC may also reject the application where the proposed activity is contrary to public policy or it is injurious to investors, etc.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com or contact:

All You Need to Know About Nigeria’s Newly Signed Tax Reform Acts

Colin Egemonye — Wed, 02 Jul 2025 09:01:06 +0000

Introduction

On 26^th June 2025, the President of the Federal Republic of Nigeria signed four landmark tax reform bills into law, marking a significant shift in the nation’s tax landscape. The laws are the Nigeria Tax Act (Ease of Doing Business), the Nigeria Tax Administration Act, the Nigeria Revenue Service (Establishment) Act, and the Joint Revenue Board (Establishment) Act. Once operational, these laws are expected to simplify tax administration, improve compliance, enhance revenue generation, and foster a more business-friendly environment. The implementation of the newly signed four tax fiscal reform laws will commence by 1^st January 2026.

This article outlines some notable highlights of the Acts that individuals and businesses should be aware of.

Key Highlights of Nigeria’s Newly Signed Tax Reform Acts

Some of the highlights of the newly signed Tax Reform Acts include:

Personal Income Tax Relief: Low-income earners earning NGN800,000 or less per annum are completely exempted from personal income tax under the Nigeria Tax Act (NTA). 25% personal income tax applies only to individuals earning above N50 million annually. The Act also increases the tax exemption threshold for compensation for loss of employment or injury from NGN10million to NGN50million.
VAT Exemptions on Essential Goods and Services: Essential goods and services including food items, medical equipment and services, pharmaceuticals, tuition fees, electricity, educational books and materials, exports (excluding oil and gas exports) etc., are exempted from VAT. The impact of this is that businesses selling these goods and services can recover their VAT costs, despite the zero rate.
Establishment of Nigeria Revenue Service (NRS): The Federal Inland Revenue Service (FIRS), the agency established to regulate the collection of tax in Nigeria has now become Nigeria Revenue Service (NRS). The Nigeria Revenue Service (Establishment) Act repeals the current Federal Inland Revenue Service Act and defines the NRS’ expanded mandate, including non-tax revenue collection of other agencies such as the Nigeria Customs Service, Nigeria Upstream Petroleum Regulatory Commission (NUPRC), Nigeria Ports Authority (NPA), among others. The Bill also lays out transparency, accountability, and efficiency mechanisms. The Acts also provide that State Internal Revenue Services (SIRS) will be autonomous in the running of their affairs.
Increase in Tax Exemption Threshold for Small Companies: Prior to the assent of the Acts, only small companies with an annual gross turnover of less than N25m were exempted from tax. Under the new Acts, there is an increase in the tax exemption threshold for small companies from annual gross turnover of N25m to N100m. Thus, small companies with gross turnover of N100m and below and total fixed assets not exceeding NGN250million are now exempt from Companies Income Tax (CIT), Capital Gains Tax (CGT) and the newly introduced Development levy.
Increased Capital Gains Tax (CGT) rate – The NTA increases the CGT rate from 10% to 30% for companies, aligning the CGT and CIT. For individuals, capital gains will be taxed at the applicable income tax rate based on the progressive tax band of the individual.
Introduction of Development Levy – Nigerian companies except small companies will pay a “Development Levy” at 4% of their assessable profits. The Development Levy consolidates the Tertiary Education Tax (TET), Information Technology Levy (IT), the National Agency for Science and Engineering Infrastructure (NASENI) levy and the Police Trust Fund (PTF) levy.
Introduction of Economic Development Incentive – The Acts replace the “pioneer” tax holiday with a new Economic Development Incentive (EDI), offering a 5% annual tax credit for 5 years on qualifying capital expenses made by eligible companies within 5 years from production start. Unused credits can be carried forward for another 5 years, after which they expire.
Minimum Effective Tax Rate (ETR) – Nigerian companies who are members of a multinational group with aggregate group turnover of EUR750million and above or have an annual turnover of NGN50billion and above, will now be subject to ETR of 15% of their “Net Income”. This rule does not apply to Free Zone companies on their exports out of Nigeria, provided that such companies are not part of multinational groups.
Introduction of the Office of Tax Ombuds: Under the new Acts, an Office of Tax Ombud has been introduced to protect taxpayers against arbitrary tax assessments. The Tax Ombuds office will liaise with the tax authorities on behalf of taxpayers and serve as an independent arbiter to review and resolve complaints relating to taxes, levies, duties or similar regulatory charges.
Increased penalties for non-compliance: There has been a significant increase in non-compliance penalties and the introduction of new penalties. Some of the updates include increase in the penalty for failure to file returns to NGN100,000 in the first month, and NGN50,000 for every month the failure continues, introduction of new penalties such as penalty of NGN5million for awarding contracts to individuals or entities that are not registered for tax, penalties for failure to grant access for deployment of technology, inducing a tax officer, etc.
Powers for AGF to Deduct Taxes: The new laws grant the Attorney General of the Federation (AGF) powers to deduct unremitted taxes by a government or MDA and pay to the beneficiary government.
VAT and CIT Rates Remain the Same: Under the new laws, Value Added Tax (VAT) remains at 7.5% and Company Income Tax (CIT) for large companies remains at 30%, without any increment. However, the 30% rate can be reduced to 25% effective from a date as may be determined in an Order issued by the President on the advice of the National Economic Council.
Tax Incentives for Agricultural Companies: Income generated by companies engaged in agricultural businesses, including crop production, livestock, aquaculture, forestry, dairy, cocoa processing and manufacturing of animal feeds will be exempt from income tax for the first five (5) years from commencement of business.

Other notable reforms introduced by the new Acts include; transfer of income from Electronic Money Transfer levy exclusively to states as part of stamp duties, ceding of 5% of VAT revenue to states by the federal government, tax break or incentives for employers to hire more people, tax exemption on personal effects not exceeding N5m, VAT exemption on purchase of real estate, amongst others.

Conclusion

The signing of the four landmark tax reform Acts in Nigeria marks a significant transformation in Nigeria’s tax regime. The reforms introduced by these Acts are expected to reduce the tax burden on vulnerable groups, encourage MSME growth, and stimulate foreign and local investments. Businesses are advised to reassess their compliance strategy and consult with legal or tax professionals to understand how the new laws affect their operations.

Please note that the contents of this article are for general guidance on the Subject Matter. It is NOT legal advice.

For further information or to see our other service offerings, please visit www.goldsmithsllp.com or contact: