UAE banking system overview

Being an international business hub, UAE has a big number of local and international banks. Almost all well-known global banks can be found here.

However, companies registered in the UAE will have better chances of bank account opening in big local banks, fully or partially owned by UAE government:

FAB (First Abu Dhabi Bank), Emirates NBD, Emirates Islamic Bank, ADIB (Abu Dhabi Islamic Bank), Mashreq (a semi-government bank), Dubai Islamic Bank, Sharjah Islamic Bank, RAK Bank.

Smaller UAE banks include such banks as Ajman Bank, National Bank of Umm Al Quwain, National Bank of Fujairah.

If you are not a large multinational company, opening a corporate account in an international bank based in the UAE is almost impossible. For this reason, the majority of business owners focus on local banks of the UAE.

All banks in the UAE are governed by the Central bank. The Central bank has to follow global standards and best practices, introduced by international organizations such as FATF, Basel Committee, and other standard setters.

The latest standards outlined the rules and regulations, which mostly focus on anti-money laundering, “know your customer” procedures, and identifying and mitigating potential risks connected with on-boarding and maintaining the accounts.

Under compliance review…

Bank account opening usually takes at least 1 month. The bank needs to do business approval, shareholder approval and other due diligence procedures within this time. Very often account opening takes longer - especially if your initial business setup solution in the UAE was wrong.

To sum it up, the right business setup is key to a successful bank account opening. How to create the right solution? You need to consider at least these few things:

your business activity
where the business will be conducted
your nationality and place of residency
jurisdiction of company incorporation (there are over 40 of them in the UAE)
expected turnover of your account
your clients and suppliers
source of initial funding of the account

High-risk factors

The challenges clients are facing when applying for a business bank account include various factors, to name a few:

high-risk business activities
high-risk nationalities and countries where the business is conducted
enhanced KYC requirements
unsuitable legal type of the company

For example, certain high-risk business activities, such as trading of gold or petroleum, in combination with a high-risk legal type of the company and unclear customer profile make account opening extremely difficult and increase chances of rejection. But if the same business is registered in low-risk authority and a client provides transparent background information, the account should be easily approved.

The types of companies seeking for account opening in UAE include:

Nowadays, Offshore companies are most vulnerable, because they are considered as the high-risk type of business by the banks. Mainland companies are the most favorable - they have a UAE citizen as a partner or agent, which gives certain confidence to the banks. Free Zone setups are the most flexible and suitable for expatriates, due to multiple ways of creating a setup solution, that would satisfy compliance officers of the bank.

Apart from the correct setup, the business and the client’s background should be transparent, the client should be ready to answer questions of the bank and provide supporting documents. Shortly, a client has to cooperate with the bank and be responsive.

How to open bank account in Dubai

First of all, choose 2-3 banks of your preference. It is better to apply to a few banks to avoid troubles and new applications in case of account rejection by one of them.

In order to apply for a UAE bank account, it is mandatory to meet the bank representative personally. At the moment it is impossible for a company to open bank account online.

However, some banks have started offering personal account opening online for UAE residents.

Here are the steps you need to follow to apply for the business account:

Meet the bank officer
Choose the account type (basic, premium, platinum)
Sign account application forms
Provide your personal documents: passport, Emirates ID and passport visa page (if you have UAE residence visa), utility bill, past 6 months bank statement
Provide corporate documents of your company
If you have other businesses abroad, provide evidence and bank statements

Once forms are signed and documents provided, your bank manager will submit the case for approval to a few departments: legal, business, and compliance.

Most likely, they all will come up with some questions or will ask clarifications from you. Be ready to reply and provide additional documents. The faster you do it, the quicker you will get the account.

After all the approvals are granted, the bank will generate your account number and will share it with you by email, which you provided at the time of the application.

It is time to fund your account. Usually, the bank expects a minimum balance to be deposited within 1-2 months from the day of your account opening.

Online banking and mobile banking are launched after the account number is generated, but it might take some time - a different department of the bank is taking care of that. While you don’t have online access to your account, you can initiate transactions and check balances through your relationship manager. He is assigned to you when the account is opened.

Packages and charges

First of all, all the banks have certain requirements for new clients in terms of minimum balance. Once the account is opened, it should be funded. If the deposited amount does not match the chosen package, the account will be charged monthly service fees of about 250-500 AED as average.

Typical packages of all the banks always include at least 3 categories. They differ in the minimum balance requirement, which the banks expect the client to maintain after the account opening. They start from 25 000 AED (7000 USD).

Usually, 2nd and 3rd categories of account type come with some added values, such as a dedicated relationship manager, who helps you to solve some banking issues without visiting the bank. It is very convenient in case you do not live in the UAE.

UAE bank account without minimum balance is not offered by any local bank.

The minimum balance money is not blocked on the account - you use it for your business needs, but if the monthly average is below the requirements of the account type you have opened, the bank takes its fee.

Apart from that, banks may charge for online banking or for account maintenance of certain types of companies, for example, offshore companies.

Account approval - result of a well-built solution

It is always necessary to find the best compromise between your requirements and your business needs and banks’ requirements and expectations, taking into account possible risk factors. Such compromise will enable you to focus on your business development rather than bureaucracy, will leave no regrets about chosen jurisdiction for your business registration and most importantly - will guarantee the UAE bank account opening.

This compromise is what we call a perfect “business setup solution” at Emirabiz. We enjoy creating such solutions and would love to make one for you.