As an incentive, banks operating in free trade zones in the country will be exempted from stamp duties on all its documents, withholding tax deductions on interest payable on deposits, dividends and royalties as well as corporate and capital gains taxes.
According to the Guidelines for Banking Operations in the Free Trade Zones in Nigeria just released by the Central Bank of Nigeria, banks operating in the zones will also enjoy the benefit of being exempted from import duties on furniture, office equipment and other facilities necessary for its operations as well as Value Added Tax.
The banks will also enjoy freedom to move funds in and out of the zone on all eligible transactions as well as “any other incentives as may be approved by the authority, from time to time” according to the guideline.
The CBN also set a minimum paid up capital of $10 million (about N2 billion) for any bank which want to operate in the free trade zone having paid a $20,000 license fee and received approval from the apex bank.
The free trade zone banks are however prohibited from sourcing foreign exchange from the official foreign exchange market of the country, insurance underwriting or opening an account for a customer in contravention of the Know-Your-Customer (KYC) principles.