The IMTO licence in Nigeria is directly connected to international remittances, which constitute a significant source of foreign exchange inflows into Nigeria and play an important role in supporting households, businesses, and investments across the country. To ensure the integrity, transparency, and security of international remittance transactions, the Central Bank of Nigeria (CBN) regulates all entities engaged in international money transfer services.
Any individual or entity seeking to provide international money transfer services in Nigeria must obtain an International Money Transfer Operator (IMTO) licence from the Central Bank of Nigeria before commencing operations. Operating an international money transfer business without the requisite regulatory approval is unlawful.
This article explains who may establish an IMTO in Nigeria, the licensing requirements, the costs involved, and the step-by-step procedure for obtaining an IMTO licence under the CBN's revised regulatory framework.
What Is an International Money Transfer Operator?
An International Money Transfer Operator (IMTO) is a licensed entity authorised to facilitate the transfer of funds from individuals or entities outside Nigeria to beneficiaries within Nigeria.
IMTOs serve as intermediaries in cross-border remittance transactions and play a critical role in facilitating diaspora remittances, international family support payments, and other approved cross-border money transfer services.
The CBN maintains a register of licensed IMTOs operating in Nigeria and supervises their activities through its Trade and Exchange Department.
Why Is an IMTO Licence Required?
The licensing requirement exists to ensure that operators within the remittance industry satisfy minimum standards relating to:
Financial capacity;
Corporate governance;
Consumer protection;
Anti-money laundering compliance;
Counter-terrorism financing measures;
Operational integrity; and
Foreign exchange regulations.
Accordingly, no person or institution may lawfully provide international money transfer services in Nigeria without obtaining approval from the Central Bank of Nigeria.
Who Can Establish an IMTO in Nigeria?
The revised CBN Guidelines permit the following categories of applicants to establish an IMTO:
Individuals;
Groups of individuals;
Corporate entities;
Foreign-licensed International Money Transfer Operators.
The regulatory framework allows both indigenous and foreign operators to participate in the sector, provided they satisfy the applicable licensing requirements.
Who Cannot Obtain an IMTO Licence?
Under the revised regulatory framework, the following entities are generally prohibited from obtaining an IMTO licence:
Deposit Money Banks;
Fintech companies;
Other institutions prohibited by the CBN from engaging in international money transfer operations.
Applicants should therefore carefully review the eligibility requirements before commencing the licensing process.
Licensing Requirements for an IMTO
Before submitting an application, prospective operators should ensure that they satisfy the minimum regulatory requirements prescribed by the CBN.
Minimum Share Capital Requirement
The CBN requires:
Foreign IMTOs to maintain a minimum share capital of US$1 million; and
Indigenous IMTOs to maintain the Naira equivalent of US$1 million.
The share capital requirement demonstrates the financial capacity of the applicant to undertake international money transfer operations and meet regulatory obligations.
Corporate Structure Requirement
Indigenous applicants must be incorporated in Nigeria and have an object clause authorising the provision of money transfer services.
The incorporation documents submitted to the CBN must accurately reflect the intended nature of the business.
Step-by-Step Procedure for Obtaining an IMTO Licence in Nigeria
The licensing process is divided into two principal stages:
Approval-in-Principle (AIP); and
Final Approval.
Step 1: Incorporate the Company
An indigenous applicant should first incorporate a company with the Corporate Affairs Commission (CAC).
The Memorandum and Articles of Association should clearly state that the company intends to engage in money transfer services or related financial services activities.
Step 2: Meet the Minimum Capital Requirement
The applicant should ensure that it satisfies the prescribed minimum share capital requirement before submitting its application.
Evidence of compliance with the capital requirement forms part of the licensing documentation reviewed by the CBN.
Step 3: Pay the Application Fee
The applicant must pay a non-refundable application fee of ₦10,000,000 to the Central Bank of Nigeria.
Evidence of payment must accompany the application for Approval-in-Principle.
Step 4: Apply for Approval-in-Principle (AIP)
The application for Approval-in-Principle is submitted to the Director of the Trade and Exchange Department of the Central Bank of Nigeria.
The application should be accompanied by the prescribed documentation and supporting information.
Documents Required for Approval-in-Principle
The CBN requires the following documents:
Evidence of payment of the application fee;
Approval to operate in other jurisdictions or agency agreement (where applicable);
Certificate of Incorporation and incorporation documents;
Memorandum and Articles of Association;
Evidence of tax clearance;
Ownership structure of the company;
Board approval to operate international money transfer services;
CAC Forms relating to directors and shareholders;
Company profile;
Details of directors and management personnel;
Information relating to beneficial owners;
Credit reports on shareholders and key officers; and
Evidence of compliance with the minimum share capital requirement.
The CBN may request additional information where necessary.
Step 5: Obtain Approval-in-Principle
Where the CBN is satisfied that the applicant has complied with the initial requirements, it may issue an Approval-in-Principle.
The Approval-in-Principle permits the applicant to undertake pre-operational activities but does not authorise the commencement of money transfer operations.
An IMTO may not begin business solely on the basis of an Approval-in-Principle.
Step 6: Establish Operational Infrastructure
Following the issuance of the Approval-in-Principle, the applicant should establish its operational framework.
This typically includes:
Internal control systems;
Compliance structures;
Technology infrastructure;
Risk management procedures;
Customer onboarding systems;
Record management systems; and
Relationships with authorised dealer banks.
Step 7: Apply for Final Approval
After satisfying the pre-operational requirements, the applicant must apply for Final Approval.
The application should generally be submitted within three months after obtaining the Approval-in-Principle.
Documents Required for Final Approval
The CBN may require:
Names of authorised dealer banks serving as local agents;
Agency agreements with participating institutions;
A detailed business plan;
Internal control policies;
Information technology policies;
Risk management framework;
Compliance procedures;
Financial projections; and
Project implementation plans.
The exact requirements may vary depending on the nature of the applicant and the scope of proposed operations.
Step 8: Obtain the IMTO Licence
Where the CBN is satisfied that all licensing requirements have been fulfilled, it will issue the Final Approval authorising the applicant to commence IMTO operations in Nigeria.
Only after receiving the Final Approval may the company lawfully begin providing international money transfer services.
Cost of Obtaining an IMTO Licence in Nigeria
Applicants should budget for the following major regulatory costs:
Item
Cost
Application Fee
₦10,000,000
Minimum Share Capital
US$1 million or Naira equivalent
Annual Renewal Fee
₦10,000,000
These figures exclude professional fees, technology infrastructure costs, office setup expenses, compliance costs, staffing expenses, and other operational expenditures.
Annual Renewal of an IMTO Licence
An IMTO licence is subject to annual renewal.
The revised CBN Guidelines require operators to pay an annual renewal fee of ₦10,000,000 or such amount as may be prescribed by the CBN from time to time. Renewal is generally required within the first quarter of each year.
Failure to renew may result in regulatory sanctions and the suspension of operations.
Common Mistakes IMTO Applicants Make
Prospective operators frequently encounter delays due to:
Incomplete application documents;
Insufficient capitalisation;
Weak compliance frameworks;
Inadequate internal controls;
Failure to disclose beneficial ownership;
Incomplete business plans; and
Delays in satisfying post-AIP requirements.
Careful preparation before submission can significantly improve the likelihood of regulatory approval.
Frequently Asked Questions
How Much Does It Cost to Obtain an IMTO Licence in Nigeria?
The application fee is ₦10,000,000, while applicants must also satisfy the minimum share capital requirement of US$1 million or its Naira equivalent.
Can a Company Operate with Only an Approval-in-Principle?
No. An Approval-in-Principle does not authorise operations. The company must obtain Final Approval before commencing business.
How Long Does the Licensing Process Take?
There is no fixed timeline. Processing depends on the completeness of the application, regulatory review, and the applicant's ability to satisfy the requirements for Final Approval.
Can Banks Obtain an IMTO Licence?
No. Under the revised CBN Guidelines, banks are not eligible to operate as IMTOs.
Is an IMTO Licence Renewable?
Yes. IMTO licences are subject to annual renewal and payment of the prescribed renewal fee.
Conclusion
Obtaining an IMTO licence in Nigeria involves a rigorous two-stage approval process administered by the Central Bank of Nigeria. Prospective operators must satisfy stringent requirements relating to capitalisation, corporate structure, ownership disclosure, governance, compliance systems, and operational readiness before receiving regulatory approval.
Given the strategic importance of diaspora remittances and cross-border financial flows, the CBN maintains a high level of regulatory scrutiny over IMTO operators. Businesses seeking to enter the sector should therefore ensure that their licensing application, compliance framework, and operational systems are properly structured from the outset to facilitate a successful approval process.
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