3 steps to set up a corporate bank account in the UAE

Worried about setting up a corporate bank account in the UAE? Admittedly it can be a tricky process.

If you try and do it alone and have your account declined, it could delay opening your business. Banks are also becoming increasingly stricter on who they let open accounts – meaning the process is now harder than ever.

But, with the right support from a trusted local business partner, your UAE business could be officially up and running in no time.

Here are three steps to walk you through setting up your UAE corporate bank account.

Step 1: Get your business license

Before you start even thinking about setting up a corporate bank account in the UAE, you’ll first need to incorporate your business. While this can be a relatively straightforward process, there are a few key decisions you’ll need to make first.

For example, will your company be based on the UAE mainland, or in one the country’s many free zones? Both types of companies can be 100% foreign-owned, but incorporating does come with some conditions: incorporating in a free zone means you can’t directly trade with UAE companies.

However, regardless of your business’ location, as long as your company isn’t engaged in banking or the oil and gas industries, you won’t have to worry about paying corporate tax or personal income tax.

But in order to obtain your trade license, you’ll need to be clear about the business activities you intend to carry out; the number of shareholders there will be; and if you choose to start up in a free zone you’ll need to know which of the 35+ possible areas you want to be based in.

Until all of this is sorted out, your business banking application won’t even get looked at.

The advice and support you need

The vast number of options and possibilities can appear daunting – regardless if you’re new to the country or have already been here a few years. That’s why it’s best to work with a reputable company formation expert from the very outset.

Ensuring you set up your business correctly in the first place can save a lot of time and effort further down the line.

Step 2: Choose your bank wisely

One of the great things about opening a business in the UAE is the fact there are so many different reputable banks.

Local banks include Emirates NBD, Abu Dhabi Commercial Bank, Mashreq Bank, United Arab Bank, First Gulf Bank, and Commercial Bank of Dubai. However, familiar international and Western banks are here in abundance too – including HSBC, Barclays, and Citibank.

All offer varying degrees of customer service and support, different financial products, as well as differing rates, fees, and charges. So it’s important to research which ones offer the services that are right for your business.

For example, if you’re regularly sending or receiving money from overseas, you’ll want to select a bank that offers favourable transaction fees and decent currency exchange rates. Similarly, if you’ll be operating a high cash flow operation, you should consider opening a business account with a bank that offers low overdraft fees.

There are different types of banks in the UAE: commercial, investment, merchant, and Islamic banks – the latter offering financial products that are compliant with Shariah law. And while the overall outlook for banking in the UAE is stable, it still pays to research the market thoroughly.

The advice and support you need

Understanding the overall business environment you’ll be operating in is a huge concern for those new to the UAE. That’s why it’s important to have local support from an incorporation partner who can advise you on the best type of bank account for businesses like yours.

They can identify service level agreements, payment terms, access to online banking, and other necessary features that are easy to overlook.

Step 3: Round up the necessary documents

If choosing a bank that suits your company’s needs wasn’t challenging enough, the criteria you need to satisfy in order to set up a business bank account is something else you’ll need to navigate.

The administrative process shouldn’t be overlooked. In the wake of recent global recession, banks need additional assurances that your business is legitimate, viable, and won’t be used for any criminal activities such as money laundering.

That’s why they’ll typically ask you to produce the following – in addition to your business’ incorporation documents:

  • Passposts with residency visas
  • Emirates ID cards
  • Information about trading activity and the source of funds
  • References from business partners
  • A business plan
  • A certificate of good standing

In addition, if one bank suspects you of anything untoward, they’re obliged to share this information with all of their local competitors. Compliance is a tricky business. But once you have the necessary documentation, everything will be a lot easier moving forward.

The advice and support you need

Simply having an incorporated company and the correct business license isn’t an automatic guarantee you’ll be accepted as a customer by all – or any – of these banks. Plus, the documentation needed relates to you, the business owner, as much as it does the company you incorporate.

A good incorporation agent can help you easily satisfy the administrative criteria. Not only can they help you acquire the necessary items, they can help you complete application forms, book you a face-to-face appointment with your bank’s customer service team, and brief you on everything you’ll need to do at each meeting.

Do everything by the book

Although the UAE has a very favourable business climate and the government actively encourages foreign investment and entrepreneurship, the compliance and due diligence criteria that local and international banks must satisfy make the process seem long-winded.

That’s why working with an established, successful incorporation agent is a good move – they know exactly what banks will ask you for.

All things considered, there’s no cutting corners here, so by making sure you do everything asked, you’ll be in a much more advantageous position than many foreign entrepreneurs who choose to ‘go it alone’ when setting up shop in the UAE.

Worldwide Formations helps entrepreneurs in the UAE with all their company setup needs. For more information, call us now on 800 FREE ZONE (800 3733 9663). 

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