Up to mid-2018 the UAE was still on what was referred to as the “blacklist” as monitored by the Financial Action Task Force (FATF). The leadership of Dubai has taken drastic measures ensuring they were removed from this “black” listing and transferred to the “greylist”. Measures taken include the signing of numerous double taxation agreements, implementing of Economic Substance Regulations as well as forcing the banks to improve on their KYC procedures.
No business can operate without a bank account and therefore the requirement to open an account is extremely important.
In Dubai banking is still very relationship orientated and the streamlined opening of an account would require introductions to a banker. In recent years online options for the opening of a business bank account have been launched but the final approval and account release still requires physical presence and signature in person.
A google search reveals that there are 23 local and 26 foreign banks operating in the UAE. You, therefore, have numerous options to choose from. But, be careful when you choose. The smaller banks have fewer branches and very few ATMs compared to the more established banks such as EmiratesNBD, Abu Dhabi Commercial Bank, Noor Bank, and HSBC for example.
The opening of a business bank account requires, in one form or another, at least the following information:
- Business plan
- Bank statements of either the shareholder if it is a new company or business bank statements from other accounts
- Degrees of directors and/or shareholders
- Directors’ authority letters
- Shareholders CV’s
- Utility bills as proof of address
- Company registration documentation and lease agreement
- Emirates ID cards, establishments cards, Visa
Once all these documents have been submitted, you can expect numerous clarification questions from the compliance division within the bank. Being successful in answering and clarifying all the information you will be issued with a business bank account. You will have to put in a request for a debit card and do not expect to get a business credit card unless you have build up a solid history with the bank.
Innovation in the banking industry has led to the forming of what is referred to as E-Accounts. These include companies such as Wise, Ebury, or Revolut. Although these institutions still require KYC it is much easier to open an account with them as everything is online and physical presence is not required. Wise and Ebury was operating the UAE until very recently when Wise had its license suspended and had to cease its operations. For now, it would seem that Ebury is still going strong and is providing a viable alternative to the more traditional banking solutions. Before opening an account at one of these Fintech companies, ensure that they are trading in the region and secondly, that they can receive the currency in which you wish to transfer to them. There are numerous exclusions and limitations to take into account.
Opening a personal bank account is however much easier. If you have your Emirates ID card and your Visa, the best option would be to make use of an online option through an app on your phone. You simply download the app and process your application. If all goes well, you will receive your banking details in no time. You will also be informed about the delivery of your debit card via a courier.
Once you have your accounts opened it is imperative that you ensure no suspicious activity is noted as part of your transactions. For instance, it is not advisable to transact any business-related transactions through your account. Compliance and anti-money laundering divisions in the bank will simply block your account and then engage as to clarification. This process is tedious and cumbersome.