The Central Bank of Nigeria (CBN) has said it would henceforth grant tax and duty waivers to banks operating in the Free Trade Zones (FTZs).
The incentives, contained in the guidelines for banking operations in FTZ include freedom to move funds in and out of the zone on all eligible transactions, exemption from stamp duties on all its documents, exemption from withholding tax deductions on interest payable on deposits, dividends and royalties and exemption from corporate and capital gains taxes.
According to the CBN circular on FTZ, the lenders operating in the zones will also get exemption from payment of duties on imports of furniture, office equipment and other facilities necessary for its operations; and exemption from payment of value added tax and any other incentives as may be approved by the Authority, from time to time.
CBN circular said the incentives will further the apex bank’s mandate for the development of banking operations in the country.
It said only banks or financial holding companies licensed under the Banks and Other Financial Institutions Act (BOFIA), or licensed foreign banks, shall qualify to apply to the authority for approval to establish presence to carry on banking business in Nigeria’s FTZs.
The CBN said the provisions of the Nigerian Export Processing Zone Authority (NEPZA) Act, Oil and Gas Free Trade Zone Act, BOFIA, CBN Act, and Nigeria Deposit Insurance Corporation Act and all guidelines and regulations issued pursuant to these Acts shall apply to banks operating in the FTZs.
“Without prejudice to the powers of NEPZA to grant Licenses, no enterprise shall carry on banking business in any FTZ in Nigeria without a prior approval granted to the parent bank and banking license granted to the subsidiary by the CBN. The required minimum paid-up capital to operate in FTZ of Nigeria shall be $10 million, or such other amount as the CBN may from time to time prescribe. In addition, a bank in the FTZ shall meet all the prudential requirements as may be specified from time to time by the CBN,” it said.
It said a bank in the FTZs shall disclose to the CBN, the equity interests of its directors and key officers in any enterprise in the zones within 14 days of acquisition of such interest.
He said a licensed bank in the FTZ may accept deposits; grant to any person, advance, loans, or credit facility, or give any financial guarantee, or incur any other liability on behalf of any person; make remittances of funds abroad or to Nigeria Customs Territory on behalf of any non-resident; undertake any other foreign exchange transaction as may be prescribed by the CBN, from time to time; and carry out any other activity that may be approved by the CBN.