Issues That Arise When Opening a Company Bank Account in the UAE

offshore company bank account uaeWhen pursuing company formation in the UAE, or anywhere in the world, opening a bank account is fundamental for carrying out the day-to-day transactions for your enterprise. The steps for opening a bank account for your company in the UAE may not have everything clear. What issues could arise that could make it challenging to open an account? Fortunately, we have the details about what you might expect to avoid any potential headaches in you getting on and commencing operations. 

Details about UAE bank accounts for company formation 

The process for opening an offshore or standard bank account for your company in the UAE first depends on your residency status in the country. First, you have to consider the type of bank you need. Along with the standard commercial banks (the kind you will most likely want for this purpose), you can also opt for bank accounts at financial institutions operating under Islamic Finance principles. The country’s banking system also has industrial banks and investment/merchant banks. There are many institutions to choose from, ranging from Emirati branches of global entities like HSBC or Standard Charter to top local ones like Emirates NBD (National Bank of Dubai). Every bank has requirements and benefits for each of the accounts on offer, but a lot depends on your residency status. 

Why is the question of residency such a crucial one, you ask? As the country implemented stricter Economic Substance Requirements to align with international anti-money laundering regulations and more robust international financial reporting standards, banks followed suit by tightening their rules. If you have residency in the Emirates, you have many more business banking company account options for you to choose from in the UAE. Plus, since having a compelling story for why you would like to open a UAE bank account is a crucial part of your company formation process, pursuing residency demonstrates your commitment to the country’s business growth. Many UAE banks only allow non-residents to open savings accounts with very high minimum deposit requirements, making residency status crucial. 

The stricter compliance rules also mean that some people may not have “resident” status in the eyes of financial institutions, even if you have an Emirates ID and a visa. A prior article has some of our top recommendations, including having a residential address in the UAE, a robust business plan. If you are the signatory, consider bearing some of your entity’s shares in your name to open the account. Plus, if you know you want an offshore bank account for your company in the UAE, you may find more stringent conditions as these institutions only want to work with local offshore entities that meet particular requirements. 

Finally, you’re going to want to have all the required documents at your disposal before travelling to the UAE. Most banks need you to open your account in-person, and non-residents cannot open bank accounts online. For non-residents, this is especially important because they will want a letter from a foreign banking company to serve as a reference for a client wishing to open an account in the UAE to vouch for you. You’ll also need six months worth of bank statements from one of your accounts (but rest assured that it does not have to be from your home country). 

The paper trail is not exclusively for non-resident clients because UAE banks will also need your employer to provide a confirmation letter from the company to the bank as you look to become a client to prove your employment status. Since residency in the UAE for foreigners is most often tied to a labour opportunity, that is crucial. If you’re self-employed, however, you present a copy of your trade licence instead. The employment verification letter can also serve as proof of residency in this process. 

 

How to open a company bank account in the UAE

If you’re looking to avoid the hassle of navigating the Emirati banking system on your own, rest assured that Europe Emirates Group’s suite of bank account opening and introduction services has you covered. We help you procure the required documents and evaluate which of our partners best fits your business and financial goals. Would you like to open a bank account in the UAE with us? Contact us for your initial consultation today. 

 

 

Written by
Adrian Oton
Adrian Oton

CEO, Europe Emirates Group 

Offshore Companies
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