Bank Account Opening in the UAE: Difficulties and Benefits

PUBLICATIONS / Articles / 2018 / Bank Account Opening in the UAE: Difficulties and Benefits
The modern times push us to involve more in international businesses, which in turn challenge us with difficulties in international transfers and unacceptable conversion rate expenses. Every business person knows how difficult it is to work internationally without a proper business account in relevant currency. This has led people opening foreign accounts, and eventually, UAE became one of the best places to open the bank account. Foreign investors and businesses were enjoying the excellent business environment of the UAE. All went well until Central Bank put restrictions on the banks and business comers saw a stop sign for the bank account opening. Let’s see how this have affected current accounts, new investors, and the future of banking for foreigners in the UAE.

What happened to the banks exactly?
The first effect was on the compliance approvals. The approvals were more difficult to get especially for international companies. Few banks have stopped offering accounts for foreign companies. Then the approval was more difficult to obtain for Offshore and IBC companies. The banks required proof of existing business in a home country or anywhere out of the UAE. Also, there was an issue with high minimum balances to open the accounts. Nevertheless, meeting the criteria did not ensure successful bank account opening. There were too much delay in account opening, and the majority of account openers were experiencing few months to get an approval.

Is it the same now?
For onshore entities the requirements are the same and it is easy to open the bank account. For offshore companies the situation as of normal practice has slight alterations. There are two group of bank players at the moment. Those which require residency for offshore accounts and those which do not need such. The last group still requires existing business or matching profile of the customer with the business line.
Within two years there was a massive change in bank accounts functioning for offshore/IBC companies. Some banks massively closed down the accounts and some restarted of opening accounts once again.

If the new amendments are still there, what are the chances to open the bank account?
Well, new amendments are useful not only for the bank but for the clients as well. Those who do not meet the requirements would consider the new changes as bad. However, the conditions filter the clients improving the quality of the services and the safety of the bank. Hence, increasing the chances of ‘good clients’ to open the bank account. Opportunities are always equal, same as in the past. Nothing has changed in this regard. With an average timeframe of opening account in 3-4 weeks, there are different cases. Some clients open bank accounts in 1-2 months. Some clients get approval in 1-3 days. This is impressive for UAE bank account but still possible. The specific case is indeed important. The way the client is ready to present the documentation is also important.

Then what should the candidate for the bank account do?
First, be patient. An opening of account in the UAE is worth it especially if you plan to keep funds and your business is properly planned. The candidate needs to be sure about the activity of the company. Make sure your running business is transparent and match the activity you are about to start with offshore/IBC company. Have all company documents in hand and latest corporate bank statements clear with matching invoices for transactions. If the candidate is clear on the business, the bank account will be with no question.

What are the benefits of opening UAE bank account?
The major benefit is the status of the UAE banks. Opening of the bank account in Dubai is always a good idea especially if the company plans to keep assets in the UAE. The banks offer multicurrency accounts with good exchange rates and fixed rate with USD. The bank accounts in foreign currency are mainly based on USD, EUR, GBP. There are also other currencies available depending on the bank. All banks have perfect and secure online banking solutions. Transfers are made secure and easy with correspondent banks and branches across the world. The majority of the banks have branches in Europe and Asia helping to significantly reduce the transfer fees. The banks also have special offers and different account levels. We would consider UAE banks as reliable as Swiss banks had image in the past. Now keeping funds in the UAE is more secure than anywhere in the world. There are also many private international banks with headquarters in Liechtenstein and Switzerland.

What if we are Start-up Company and have no existing business?
If you refer to UAE banks, you need to have matching experience profile and readiness to go with investment plans form the bank.

What if we are complete start-ups with no same experience in the same field of the planned company?
In this case, our team will advise you other business banking/payment solutions. Modern business is formed in such way when you do not need to follow traditional business paths. If you have new business, being an IT Company as an example, perhaps you should consider new payment solutions. There are many banking solutions for start-ups outside the UAE. Freemont experts will be happy to advise you on the options to ensure your business grows fast and smooth.

Then why come through Freemont DXB? How can we be of assistance?
We are engaged in the UAE since 2006. So we have the necessary experience, capacity and know how to ensure that you will get a truthful answer and advice on how to get your bank account application successful. If the UAE is not the destination for you; we have the capacity to open accounts worldwide. We have the know-how for this as well. Bank representatives and client managers visit our offices so you can have your application prepared in the comfort of our conference rooms. Why should you hassle anyway? We are here to help you; not annoy you further.  

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Thank you for your interest in Freemont Group, the specialists in company formation, asset protection and legal and advisory . Feel free to contact us with any inquiry you might have. We will provide you with a free initial consultation, and a customized solution for your personal situation.