What are the difficulties in opening a bank account in Dubai and the UAE? Why don’t bank in the Emirates open business accounts? What causes failures?
UAE BANK ACCOUNT FOR UAE RESIDENTS
Both residents and non-residents can open a bank account. In the former case, it is possible to open a current income and savings account. In the latter case, banks will only open savings, deposit, or demand accounts. In practice, banks often refuse to open current accounts in the UAE, even for residents. This is because banks try to avoid customers from high-risk countries. Each bank has its own internal nationality rating. Therefore, if you decide to open a bank account in the UAE, it will be efficient to submit documents to several banks at the same time.
CORPORATE BANK ACCOUNT IN UAE
You can open bank accounts in the Emirates for different types of companies. They can be offshore companies, on the mainland or in a free trade zone. In practice, we observe that in 50% of cases companies are refused a corporate bank account in the Emirates. It does not matter whether you apply to a local or an international bank.
There are several options that will quickly solve the problem. Each has its pros and cons.
- Buy a ready-made company with an existing bank account
- Prepare the documents for the bank in a way that minimizes problems and meets the requirements
If in the first case you will carry out the verification, in the second case you will be checked.
WHAT DO UAE BANKS CHECK?
As mentioned above, banks check the reality of the business, i.e. the economic substance. The bank makes sure that your company has a real office and real operating costs in general. Some banks send an employee to check the availability of an office at the address stated in the documents. The bank may request information about employees. The size of rent and salary costs allows a quick understanding of the economic substance of the business. In addition, the bank will be keen to see audited accounts, biographies of the founders, a financial plan for the company opening the bank account, its potential suppliers and intended customers, etc.
WHY DO UAE BANKS REFUSE TO OPEN CORPORATE BANK ACCOUNTS?
Emirati banks are strict with customers because of pressure from regulatory and control authorities. The UAE is doing most of this to comply with European Union requirements and to get off the blacklist of non-cooperative tax jurisdictions. In other words, if an Arab bank sees that a company’s bank account in the UAE is being opened for tax optimization purposes, there is a high risk that the bank will not open the account because of the risk of losing its license.
WHAT IS THE MOST DIFFICULT PART OF NEGOTIATING WITH UAE BANKS?
The most uncomfortable and, in our opinion, the most difficult part of dealing with banks in the Emirates is that they are laconic with their customers. This is due to
