Nigeria has become one of Africa’s most active markets for fintech and digital assets, shaped by a youthful population, deep mobile penetration, and a strong appetite for innovative financial solutions. While the market is dynamic, entering the Nigerian fintech or crypto space requires a grounded understanding of the regulatory landscape. Foreign companies often discover that licensing, particularly for crypto-related operations, is not a fast or mechanical process. It demands patience, strategy, and an evident appreciation of how Nigeria’s regulators approach emerging financial technologies.

Unlike some jurisdictions that operate a single, consolidated “fintech licence,” Nigeria regulates fintechs based on the nature of services they intend to offer. Payment companies fall under the Central Bank of Nigeria (CBN), while the Securities and Exchange Commission (SEC) regulates digital asset and virtual asset businesses. This means that foreign companies may need to engage with different regulators depending on whether they offer payments, digital wallets, mobile money, crypto exchange services, token issuance, or brokerage activities.

For crypto-focused firms in particular, the SEC’s “Rules on Digital Assets and Virtual Asset Service Providers” form the core regulatory framework. Under these rules, a company intending to operate as a Virtual Asset Service Provider (VASP) must register with the SEC. However, this process is evolving. To date, the SEC has issued only a limited number of VASP registrations, and most applicants remain in preliminary stages of engagement, incubation, or assessment. Rather than opening the floodgates to mass licensing, the SEC has taken a cautious, measured approach, preferring to vet applicants more deeply and coordinate closely with other financial regulators before issuing additional approvals. For foreign companies, this means that compliance preparedness and understanding of local regulations are more important than ever.

The licensing journey typically begins with establishing a legal presence in Nigeria. Most companies incorporate a Nigerian subsidiary through the Corporate Affairs Commission (CAC), as this simplifies regulatory engagement, banking arrangements, and local compliance. Some seek approval to operate as a foreign entity, but for fintechs and VASPs, a local company structure is generally the smoother path.

Once the corporate structure is in place, the real work begins. A fintech looking to operate as a payment processor, mobile money operator, switching company, or payment solution provider must engage the CBN under clearly defined licensing categories, each with its own capital requirements, technology standards, and governance expectations. These requirements often include maintaining a minimum paid-up capital, implementing strong cybersecurity controls, submitting operational manuals, and demonstrating the ability to carry out AML/CFT monitoring.

For crypto and digital asset companies, interaction with the SEC is more detailed. The regulator requires robust documentation: governance structures, thorough risk management frameworks, cybersecurity protocols, internal policies, AML/KYC procedures, descriptions of digital asset offerings, technology architecture, and disclosures on cross-border arrangements. The SEC also conducts a “fit and proper” assessment of key personnel, which is consistent with global standards for virtual asset regulation.

Foreign companies should be aware that Nigerian regulators are not only focused on compliance paperwork. They assess whether applicants understand the risks associated with digital assets, whether their systems can withstand cyber threats, and whether they can demonstrate a clear commitment to consumer protection. Nigeria has seen an uptick in digital fraud and platform vulnerabilities, and regulators are increasingly sensitive to operational resilience and customer safeguarding.

Tax compliance is another critical element of market entry. Depending on the structure, companies may be subject to corporate income tax, VAT, withholding tax, stamp duties, and sector-specific levies. Engaging a local tax adviser early helps avoid structural mistakes that could affect repatriation of profits or overall operational efficiency.

It is also important to recognise that the regulatory landscape has shifted in recent years. The CBN’s earlier restrictions on crypto-related transactions were softened in 2023, allowing banks to open accounts for regulated VASPs. Meanwhile, the SEC continues refining its digital asset rules and supervising the regulatory incubation of potential VASP applicants. For now, only a handful of companies have secured SEC registration, and most of the market is watching closely for the next phase of approvals.

Given these dynamics, many foreign companies adopt a phased market entry strategy. Some partner with existing licensed Nigerian fintech operators to begin operations more quickly. Others engage consulting and legal teams early to lay the groundwork for licensing, knowing that regulators expect thorough internal systems before approval. A well-prepared application stands a far stronger chance in Nigeria’s selective licensing climate.

Conclusion

Nigeria remains one of the most promising fintech markets on the continent. For foreign companies, obtaining a crypto or fintech license is possible, but it requires time, clarity of purpose, and strong regulatory alignment. With the right strategy and compliance foundation, foreign entrants can establish a sustainable presence in a market that continues to evolve and attract global attention.

For further enquiries, contact Olawunmi Ojo via ooo@cms.trustedadvisorslaw.com. +2348038954988

Written by Olawunmi Ojo for The Trusted Advisors

Email us: info@cms.trustedadvisorslaw.com

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