Are you looking for a more secure way to save money while still protecting your privacy? Opening a business bank account in the UAE has become much easier in recent years. Also, it is highly recommended for any new business. However, many firms do not know where to start.
In this article, you will learn everything about the essential steps to get your new account up and running in no time. Every firm needs a bank account to do all the related transactions. Let us observe:
- The banking industry in the UAE
- What are the advantages of setting up a business bank account in the UAE?
- Features and benefits of business bank accounts in the UAE
- Considerations before applying for a UAE corporate bank account
- Documents required to open a business bank account in the UAE
- How much does it cost to open a bank account?
- Criteria for opening a business bank account
- How to open an account?
- How can Connect Group help you?
1. The banking industry in the UAE
A business bank account is required for a firm to be able to carry out its activities in the UAE, and in some cases is a required part of the incorporation process. As a result, it is an important consideration for any new business owner.
In the UAE, there are two types of commercial banks: locally incorporated banks and branches of foreign banks. Some of the most well-known are:
1.1. Banks with a local presence
- NBD (Emirates NBD)
- The First Abu Dhabi Bank
- The Islamic Bank of Dubai
- Mashreq Bank
- Dubai Commercial Bank
- ADCB
1.2. Foreign bank branches
- HSBC
- Citibank
- Standard and Poor’s
- The Deutsche Bank
- Credit Suisse Group AG
In total, the UAE has 23 locally incorporated banks and 28 foreign bank branches. Many of them are located in the Dubai International Financial Centre (DIFC), an independent free zone and recognized hub for financial activity in the Middle East.
2. What are the advantages of setting up a business bank account in the UAE?
You will require a business account to send and receive money, manage business activities, and make financial payments. This will be once your firm is established and active in the UAE. Then, you can use the business account to:
- Making transactions.
- Tracking spending.
- And obtaining loans, among other things.
For the following reasons, you must open a business account:
2.1. Obtaining access to business funds
A corporate account is required not only for accessing funds but also for managing and tracking transactions.
2.2. Making investments
As a business owner, you will have to make specific investments from time to time. Hence, a corporate account, which includes features such as standing instructions and reminders, makes this much easier.
2.3. Spending should be managed
A business bank account in the UAE helps you keep track of your firm’s expenses. It also aids in the growth of future investment strategies based on the firm’s current state.
2.4. Obtaining commercial loans
A business bank account can help you get a business loan and a corporate credit card. Plus, a business bank account is typically opened in the name of the firm. This aids in the acquisition of loans by setting up a legitimate presence.
2.5. Financial services
A corporate bank account includes a slew of features that make it simple to track incoming and outgoing funds in the account. It also serves as a reminder of the expenses that must be incurred to meet the needs of the business.
2.6. Record-keeping precision
They designed UAE company accounts to handle almost all types of business transactions, making it easy to keep track of a large amount of data. Because of these benefits, it is especially honest in terms of paying taxes, salaries, and other bills on time.
3. Features and benefits of business bank accounts in the UAE
Business accounts in the UAE include a slew of appealing features and benefits. Common examples are:
- Savings accounts
- Merchant accounts
- Merchant services accounts
- Credit card accounts
The following are some of the benefits and features offered by corporate bank accounts in the UAE to businesses.
3.1. Safety and security
The business account protects you from personal liabilities by keeping personal and business cash separate. As a result, the services available to business account holders ensure the safety of your data and transactions.
3.2. Purchase power
A business credit account makes it simple to obtain larger loans by setting up a good business credit score. This allows for larger initial purchases.
3.3. Account with a minimum balance
Many UAE banks have low minimum account balances, and some even have zero balance business accounts. This makes it easier for small businesses to thrive.
3.4. Appealing interest rates
UAE banks provide a great deal on interest rates for new businesses through their business bank accounts; making it a source of added value for the firm.
3.5. International business transactions
Banks in the UAE offer a platform for business owners to send remittances in foreign currencies at very low rates.
On the other hand, note that Connect Group offers tax consultancy services.
3.6. They accept multiple currencies
Banks in the UAE accept a variety of currencies in addition to the AED, including USD, GBP, EUR; and others, allowing international clients from all over the world to open a business account.
3.7. Access to internet funds
Business account holders can easily access the company’s funds while on the road thanks to an easy-to-use online banking site. As a result, you can access and manage your bank accounts at any time and from any location, saving you time and effort.
3.8. Checkbook facility
Every bank in the UAE offers a checkbook service in your company’s name, allowing for easy payment of a variety of items.
There is no doubt that opening a bank account in the UAE is a great opportunity. Banks offer a lot of benefits.
4. Considerations before applying for a UAE corporate bank account
4.1. The high level of privacy is one of the primary reasons for the high demand for UAE banks
This secrecy is one of the primary factors contributing to the success of the UAE banking industry, making it efficient and secure for your funds. Thus, as an investor, you can be confident that your privacy will be fully respected.
Note that several agreements have been signed-in recent years between the UAE and other countries; this was in an attempt to combat tax evasion. Plus, these agreements say that, while banks must protect their customers’ privacy, they must also cooperate with foreign authorities in certain circumstances.
4.2. Local banks
You may have a set up UAE company or own a registered branch or subsidiary company in the UAE. If you do, you can always apply for a corporate account with a local bank.
Furthermore, you can open your account on international banks such as:
- HSBC
- Standard Chartered Bank
- Citibank
However, for SME and startup businesses, a local bank account is preferable.
4.3. Your presence
Once you have decided which bank to apply to, the next question that may arise is whether your presence is required to submit the application. As previously stated, if you have a startup or SME company registered in the UAE, local banks are more recommended and appropriate for you.
To be more specific, your presence as the bank signatory is only required for a day or 1 to 5 hours for submitting the application and confirming the passport in the banker’s presence.
4.4. Documentation
In terms of documentation, you must consider the:
- Business activities.
- The number of shareholders.
- The management’s business background.
- Your business plan for the new entity in the country.
5. Documents required to open a business bank account in the UAE
The list of documents you must submit to open a business account is as follows:
- Identity card. The shareholder representative and firm director must provide a copy of their Emirates ID card as well as a valid passport (copy). A residence visa for the shareholder representative is also required. In addition, our visa services can be of great help. For example, with us, you can obtain a golden or investor visa.
- A comprehensive CV, as well as 5 to 7 years of professional and business experience. Before opening a business bank account, ensure that the company’s commercial activity corresponds to your personal technical expertise.
- Utility bill. A copy of your most recent utility bill is required as proof of your current address (issued in the last 3 months).
- Business documents of the company. You must bring your company’s business documents to open a business bank account in the UAE.
- Corporate bank statement. The shareholder’s current company’s bank statements for the previous six months (if applicable).
- Personal bank statement. Each shareholder also needs to provide a personal bank statement for the previous six months.
- Corporate document of proof of ownership. Bring a corporate document that serves as proof of ownership for your current business. It could be a Certificate of Incumbency or another document of a similar nature issued by the authority within the last six months.
- A business plan. It should include all information about the:
- Firm’s business activities.
- Potential clients.
- Business development plan.
- Financial plan, suppliers (for a trading firm).
- Partners.
- Management team’s background.
- Board Resolution. They require a Board Resolution authorizing a company officer to open the account.
5.1. Additional documentation
In addition to previous comments, the list of required documents may differ depending on the profile. We recommend that you provide exact and complete documents that contain all of the information. If you follow these guidelines and specifications, you should be able to open your UAE bank account within a month.
Again, to avoid delays, make sure your documents are properly prepared and filed before submitting them.
6. How much does it cost to open a bank account?
Investors may be wondering what the fees are for opening a corporate bank account. The good news is that, like most banks in other countries, UAE local banks do not charge any fees for opening a bank account. All local banks have to maintain a minimum monthly average balance. Plus, each bank has different minimum monthly average balance categories.
This balance ranges from AED 50k to AED 500K for local UAE banks, depending on which bank you apply to. For example, Emirates NBD requires an amount of AED 50,000. Hence, if you do not maintain this minimum monthly average balance, the penalty begins at 250 AED per month.
We will also mention that if you open a corporate bank account with a specific minimum maintaining balance at any local bank; we recommend that you always keep this balance. This is because you have to maintain a positive relationship with your bank from the very beginning.
Furthermore, you should also be aware that all banks provide excellent online banking services, ranking among the best in the world.
7. Criteria for opening a business bank account
To open one of the best business bank accounts in UAE, the corporation must meet specific eligibility standards as specified by the concerned bank. It is important to say that every bank has its own rules. Among these are a few of the following:
- Every month, the firm will need to maintain a certain minimum balance in its bank account.
- Several banks require the organization to have a savings or current account to qualify for a business account.
At the sole discretion of the bank, the applicant firm may need to meet additional eligibility criteria in addition to those listed above.
8. How to open an account?
Once the bank and account type has been selected, and all necessary documents have been prepared, you must go to the bank. Someone on your firm’s behalf should go in person to submit all required documents and sign all relevant documents.
The process for LLCs or FZ companies will typically take 2 to 4 weeks. This will be depending on the bank’s compliance and approval procedures.
9. How can Connect Group help you?
Opening a business bank account in the UAE is without a doubt one of the most important tasks to complete if you are an entrepreneur. This procedure has recently become more time-consuming, as you can only open a business bank account once you have received your trade license and your UAE residence visa.
However, if you work with Connect Group, you can get a stress-free process. Since we are an experienced agency, we can help you in your company formation process.
Would you like to contact us to obtain more information about opening corporate bank accounts? If you have any questions, call us on + 971 43 316 688. You can email us at contact@connectgroup.co as well. After that, you will talk to one of our representatives who will answer your questions.
Are you looking for a job in the UAE? You can visit thetalentpoint.com and apply for a variety of open positions. Another option is to send your resume to contact@thetalentpoint.com. You can grow with us, the best team in the country.
