Your bank is your friend in need indeed, helping you monitor your transactions, loaning you funds when required, and taking care of your deposits!
Congratulations, you’ve got your trade licence! Way to go! So much to plan and tons of things to do! You are almost there! And now it’s time to focus on priority tasks towards making your newly-established firm a full-fledged operational company. And one of them is defo opening a corporate account in the bank that’s right for you. The ease of banking offered by UAE banks, without a doubt, facilitates foreign entrepreneurs while establishing a company in Dubai, UAE. Plus, a business without a corporate bank is pointless anyway! So, let’s know how you can accomplish the task of starting an account with a bank of your choice in the UAE.
The banking system in the UAE
The UAE comes with all mod cons and the banking system is no exception! Banking activities are highly regulated in the States, and customers’ safety comes first on the list of their priorities. Armed with digital and mobile banking and unfailingly embracing emerging technologies such as AI and Blockchain, Emirati banking industry is advanced and efficient enough to provide favourable conditions for businesses to operate and enhance the economic growth of the country. The country boasts about 51 commercial, locally incorporated banks, where the lion’s share of total domestic assets is held by the banks in Abu Dhabi and Dubai.
Benefits of having a corporate bank account in the UAE
The UAE is every bit safe, and banking in the UAE is more than safe! Thanks to the UAE Government which is vigilant 24×7 to protect its residents and nationals from the prying eyes. Opening a corporate bank account is not just important and meaningful for businesses operating in the UAE, but also advantageous in many ways. Let’s check out below, what are they:
- Complete privacy for foreign investors and entrepreneurs
- Business persons are allowed to open their corporate bank accounts in most currencies, which simply means easy & effortless exchange of currencies
- Keeping track of cash flows and transactions becomes easy with a business account
- Investors can access tax liabilities with their corporate business accounts in the UAE, which is helpful in maintaining transparency in tax payments
- With a business account, business owners can readily gauge their spending, which is important for efficient cost management
- Entrepreneurs can avail of loans to fulfil their business needs and credit cards for difficult times
- Corporate banking keeps the business owners from any possible maltreatments on the web and telephone banking frameworks
- The assistance to worldwide banks and their administration is also skillfully done here
Major banks for corporate banking in the UAE
Some of the most prominent local banks in the UAE are:
- Emirates National Bank of Dubai (ENBD)
- Abu Dhabi Commercial Bank (ADCB)
- Dubai Islamic Bank
- Standard Chartered
- Abu Dhabi Islamic Bank (ADIB)
- Mashreq (An associated company of the HSBC Group)
- First Abu Dhabi Bank (merger of the National Bank of Abu Dhabi and First Gulf Bank)
- Abu Dhabi Islamic Bank
- RAK Bank
- Commercial Bank of Dubai (CBD)
- National Bank of Fujairah (NBF)
Things to know before opening a current bank account in UAE
- The Emirati banking system welcomes every entrepreneur. Whether you have a company in Mainland or Free Zone or a branch office or subsidiary, you are eligible to apply for a corporate bank account in the UAE.
- Startup or SME owners have to be present as a bank signatory for a day or a few hours for successful submission of the application & verification of passport
- New entities in the UAE must present to the bankers the documents communicating their business activity, number of shareholders, business background, and business plan
Challenges on the way to opening a business bank account in the UAE
There might be several hiccups on your way to opening a corporate bank account in the UAE. It is only prudent to know them in advance. Ahead, we are talking about almost all the difficulties that might bother you if you are not prepared.
- Stringent regulatory requirements and compliance pressure
- Entrepreneurs are required to prove their credibility at the time of corporate bank account application. They have to convince the bank that they have a sound knowledge of the industry in which they are planning to start a business and therefore, need a bank account
- Business owners must possess a residence visa if they’re a resident, applying for a bank account in addition to a local UAE address
- The requirement of physical office space must be met. You might get cross-checked by an Inspection Officer
- The business person who is applying for a corporate bank account in the UAE must be up-to-date about all information about their business and be ready to present it to the banker when asked for. Insufficient information can result in hardships during the corporate bank account opening process. Banks in the UAE urge the applicants on knowing the complete economic substance of their business.
- Opening a corporate account in the UAE can be a tough nut to crack if you are planning to execute business in high-risk areas or countries
- Starting a bank account in the UAE is not easy at all for those who come from a high-risk country
- You might be required to maintain a minimum balance in your current account that can range from AED 10,000 to AED 50,000, depending on the bank you choose to open an account in. However, there are banks in the UAE that provide several zero balance accounts on understanding their customer’s needs, such as NBF Onestop Business Account and Mashreq Neobiz Lite.
Steps to open a corporate bank account in the UAE
For business account opening, each bank has its own internal method and timeline. The process of opening a bank account for an LLC or a Free Zone firm usually completes in 2-4 weeks. Let’s look at the procedure:
- Know the application process: Consult the advisor or the bank branch to have clarity on the process of applying for the corporate bank opening.
- Collect your business licence: Having a business licence is the first and foremost requirement to open a corporate account in the UAE. The bank has to recognise you as a business to start your account with them.
- Have other legal and corporate documents in place: The next step is of course providing the bank all legal and corporate documents in a well-organised manner. The folder of documents consists of complete application form, copy of the Emirates ID and shareholder representatives, detailed business plan, MoA, and AoA, amongst others.
- Select the bank: In the UAE, you have numerous local and international banks with different account opening requirements and eligibility criteria at your disposal to choose from. After you have gathered all the required documents for corporate bank account opening in the UAE, you should pick the bank that checks all the boxes.
- Meet the visa requirements of the bank: Not all banks ask for a proof of residence of your business shareholders. You must check with your bank if they do need one, and be ready with the residency visa of at least one shareholder.
- Wait for the application approval: Once all the above-listed documents are submitted along with the duly-filled application form, it to the officials, the bank will review your application and authenticate every detail to verify upon approving or disapproving the application.
- Expect the background check: Upon approval, the bank gathers background information about the applicant’s management team, shareholders, and directors.
- Be interviewed: In the last step of the process,the bank will interview you to establish your account.
List of documents required to open a corporate bank account in the UAE
Your bank needs a certain set of documents to consider the request of opening a corporate bank account, which can vary depending on the scope of business activity and the bank’s criteria. The list of documents required by the bank (for residents and non-residents) includes:
- Identity Card: A copy of Emirates ID card and a valid passport of the shareholder representative and company director, plus the residence visa of the shareholder representative.
- Comprehensive CV: Your CV must demonstrate that you possess 5 to 7 years of professional and business experience for the bank to ensure that the chosen commercial activity squarely fits your personal technical expertise before opening a business bank account.
- Utility Bill: A copy of utility bill (generated in the last 3 months) as proof of your current address.
- Company Business Documents: A copy of trade licence, complete set of certified company incorporation documents and other company-related documents such as copy of MoA, AoA, company incorporation certificate, company share certificate, commercial lease agreement, shareholders registry, etc.
- Corporate Bank Statement: The previous 6 months of bank statements from the shareholder’s current company (if applicable).
- Personal Bank Statement: A personal bank account statement of each shareholder featuring transactions from past 6 months.
- Corporate Document for Proof of Ownership: A corporate document that acts as evidence of ownership for your current business, such as Certificate of Incumbency. You may also present a similar type of document granted by the authority within the last six months.
- Detailed Business Plan: A business plan with detailed information about the company’s business activities, potential clients, a concise business development plan, financial plan, suppliers (for a trading firm) and partners, as well as the background of the management team.
- Board Resolution: A Board Resolution authorising a Company Officer to open the account.
You may be asked for below-listed documents (at the sole discretion of the bank) as well:
- Comprehensive CV
- List of the names of at least 5 suppliers and 5 customers
- Disclosure of the source of funds
- Existing contracts
- Company extract
- Certificate of good standing
Cost of opening a corporate bank account in UAE
There is no fee for opening a business bank account in the UAE’s local banks, however each national bank has to keep a monthly minimum average balance and operate in the UAE with its own set of minimum average monthly balance categories. This balance swings between AED 50k and AED 500k. For instance, to maintain a corporate account in Emirates NBD you must meet the minimum average monthly balance i.e., 50,000 AED, failing which every month a penalty of 250 AED will be imposed on you. Below are the standardized fees and charges in connection with operating a bank account in the UAE, as of the most recent update in 2018:
- Account opening fee: Nil
- Minimum balance: AED 5,000
- Monthly penalty for not maintaining minimum balance: AED 50
- Charges for using third-party (local) bank’s ATM in the UAE: AED 2
- New chequebook issuance fee: AED 25 (the first one is free)
- Manager’s cheque issuance fee: AED 30
- Charges for furnishing Account Balance Letter: AED 50
- Service fee for providing No Liability Certificate: AED 60
- Release Letter charges: AED 50
- Bounced cheque charges: AED 100 (no charge if written to yourself)
- Account closure fee: AED 100
For corporate bank account opening assistance in Dubai… meet us @ Adam Global!
Whether it’s about business formation or bank account opening, the most difficult and hectic part in starting anything is having the relevant documents in place. Thankfully, there are experienced business setup consultants in Dubai, UAE such as Adam Global who you can outsource the gruelling task. By working with a business formation specialist, not only you will save your valuable time and energy, but also minimise the possibilities of the bank disapproving your application to opening an account. And the joy of joys is that you will know what’s right for you. Because your business setup advisor knows what’s on the way!