Time for reading: 10 min
More and more often, business representatives and private investors select United Arab Emirates’ banks, primarily the ones from Dubai, to save and multiply their capitals. The reasons for this are evident: Dubai is one of not just the richest cities and leading tourist destinations of the world, but as well holds top and, what’s even more important, firm positions on the global real estate and finance market. Generally, the UAE is distinguished by powerful national economics, and they virtually don’t depend on international financial organizations. About fifty local and foreign banks (and their branch offices) function across the country. All of them receive funding mostly by way of deposits. All the while, the banking activity scheme in the Emirates is drastically different from the typical European system: the funds are being invested in reliable projects that provide a constant profit, while the received earnings are then divided between investors.
All of these advantages take on particular importance in the conditions of today’s global crisis when the economic and political environment of the world is extremely unstable and unpredictable. UAE’s financial sector’s popularity continues to grow on the background of the ever-increasing pressure on offshore jurisdictions and European and Asian countries from the side of the strongest countries in the world. Thereby, even Swiss and Singaporean banks are incapable to provide one-hundred-percent confidentiality of client accounts today due to the introduction of the CRS – Common Reporting Standard. The situation is different in the UAE, and particularly in Dubai.
Dubai is the most preferable option for starting a bank account in the UAE – it is the most evolved emirate and the largest financial center of the Middle East. Many banks function here, including the local ones as well as foreign branches. Its financial system has obvious advantages even compared to the country’s capital – Abu Dhabi. Dubai has reached the highest possible level of data confidentiality: data about clients’ bank accounts are not subject to disclosure. All financial organizations operating on the emirate’s territory are carefully selected at the licensing stage, thus ensuring their reliability. Ultimately, Dubai is a multi-national territory and is distinguished by high loyalty towards foreigners.
Both residents and those, who don’t have a residence permit or a resident visa, can start an account in a Dubai bank. In both cases, it is possible to open accounts for various purposes, private use, international business development, or a privately owned company that functions on the Emirates’ territory.
An important condition: regardless of account type, its future owner must be personally present in the bank. This is an obligatory condition in all the banking organizations of Dubai. It’s enough to come just for one day to meet a manager.
The process of application review and account creation can take from several days to 2-3 weeks.
Central Bank of the UAE regulates the activity of all the financial organizations functioning on the country’s territory. In order to ensure compliance with the international standards and requirements, the Central Bank has developed a special policy known as KYC (Know Your Customer). In terms of this concept, UAE banks ask customers particular questions and comment on ongoing transactions both before and after the creation of a personal or corporate account.
If the bank considers an applicant suspicious, the former can refuse to start and maintain the account. Reasons for refusal can include:
In order for the account to not be transferred into the inactive accounts list, it is necessary to use it at least once in six months.
The procedure of starting a bank account for personal needs is simpler than for business objectives. At the same time, foreigners-residents have wider opportunities, than people without this status.
First of all, residents can create both a savings account and expense account (for example, for salary accounting purposes). Secondly, the bank provides applicants from this category both a debit card and a checkbook (this is a preferred way of paying for purchases in the UAE).
Recently, residents have obtained one more advantage. Two banks – Emirates NBD and Mashreq – provided them with a possibility of starting accounts through Liv and Neo mobile applications.
Regularly, in order to start a physical entity account, a resident has to provide:
Non-residents of the UAE also have the right to start both a private and corporate account in Dubai, but they have certain restrictions. This also concerns the selection of banking organizations and the services they provide.
Most banks allow non-residents to open an account with them, but only a deposit one. The creation of a current account for this client category is unavailable. For money extraction, banks provide a credit card, but one cannot get a checkbook without a resident visa. Besides, they introduce restrictions on the minimum and maximum amounts of money on the account. Regularly, the minimum balance is between $800 and $1,500.
In order to start a personal account, a non-resident has to provide the following things to a financial organization:
These requirements can slightly differ in different financial organizations.
It is necessary to personally be present in the bank only when starting the account (it’s enough to fly to the UAE on a tourist visa), but further on, all the operations can be conducted remotely, using a convenient, simple, and reliable internet banking system. All the possible questions can be easily solved by calling the bank’s managers by phone. It’s best to call from Sunday to Thursday since Friday and Saturday are weekends in the Emirates.
For the implementation of business objectives, it’s necessary to have a corporate account: the country’s laws forbid the use of personal accounts for entrepreneurial activity. There are two ways of obtaining a permit for its opening:
In both cases, organizations are going to be fully owned by a foreign country. But there are still going to be differences in the process of account creation.
An account for an off-shore company is a cheaper option, but it’s harder to start. Due to the fact that this is a non-residential account, the bank applies strict demands to its creation and further condition. In particular, this considers a larger minimum balance that has to always be present on the account.
Account registration for an on-shore company requires more resources but opens greater possibilities to its owner. First and foremost, this includes the receipt of a residential visa and resident status along with all the other accompanying advantages: a larger selection of banks and a low limit for the remaining balance.
The applicant has to provide their banking manager the following document suite:
The process of corporate account creation normally takes from one week to one month.
Starting an account in Dubai banks is regularly free, but its maintenance can be named free only notionally: each service has its own price. Payments are going to be charged for the use of other financial brands’ ATMs (averagely, $0.5 or AED 2), receipt release ($8 or AED 30), balance sheet ($14 or AED 50). If the average monthly sum on the account is less than the established limit, the owner will have to pay a fine of about AED 50 ($14). Internet banking averagely costs from $100 to $200 annually (AED 367-735). Termination of an account is also paid and costs about $27 or AED 100.
The process takes about 5 days. Before closing an account, it is necessary to liquidate all debts, including loans, and request the bank’s confirmation about the absence of any remaining liabilities. The remaining funds can be personally taken by the owner from the bank or preliminarily transferred to another account.
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