Opening bank accounts in the UAE

If you are planning to relocate to the UAE or open a business there, you will require a country specific bank account. Therefore, it is important to understand the peculiarities of the UAE`s banking sector. Here's an overview on how to choose the right financial institution, open an account for either a legal entity or an individual, what difficulties may occur and what should be considered when opening an account for non-residents.

Banking system specifics and types of accounts in the UAE

According to the country’s legislation, all expats over the age of 18, including non-residents, can open accounts in the UAE. Bank accounts opened by individuals can be used strictly for personal needs. If you are planning to run a commercial business, you should establish a company, obtain a relevant license and open a corporate account afterwards.

Personal accounts

UAE residents have the right to open any type of account, while foreigners who do not have a resident visa may only apply for an investment or savings account. Additionally, the latter will need to keep to dedicated limits on a minimum cash balance. In some cases it might be necessary to purchase specialized investment products in advance. In general, the entire account opening procedure can last from 3 to 14 working days.

A current account can be used for money transfers and other financial operations. Generally, a chequebook and a debit card are provided. It is also possible to link a credit card to a current account.

Payroll accounts are current accounts opened for employees working in local companies. In this case, the bank sets a minimum amount of monthly payments depending on the client's employment contract.

The main objective of opening a deposit (investment) account is to receive a passive income in the form of interest on the deposit. The interest can be fixed or floating. In most cases, after opening a deposit account, the applicant cannot use his/her assets until the contract expires without being charged a corresponding penalty. Some banks suggest the possibility of limited use of finances, but the profit will be significantly lower. The account is opened on the basis of an investment agreement concluded for a period of 1 to 10 years. Depending on bank terms and conditions, the balance should also be replenished on an annual or monthly basis.

A savings account is intended for the accumulation of funds. Fixed or floating interests can be earned on this account, but the rate will be noticeably lower compared to investment products. Access to savings can be partially limited, and sometimes withdrawals are subject to penalties. The savings account can be opened not only in dirhams, but also in other global currencies, including dollars and euros.

More often local banks give preference to resident legal entities. If your company is registered in another country, it is likely that you will be denied to open an account in the UAE. Besides, you will need to open a deposit account first. The easiest and most reliable way to do this is to establish a branch or company based in the United Arab Emirates, choosing a local jurisdiction or a free economic zone.

All business activities in the UAE require an obligatory license. The type of license your company obtains will also affect the bank's decision to open a corporate account. Because of the risk of inappropriate use of funds, many local banks are more aware of holders of General Trading and Management Consulting licenses.

Most recently banks have been paying attention to the existence of a company's actual office. It will be extremely difficult to open a company bank account with a virtual office.

Another major factor is the residency of not only the legal entity, but also of its owner. For example, if the founder of the company does not have the status of an UAE resident, it would almost be impossible to open a corporate account here.

This list can be extended depending on the bank's requirements. All statements and resumes must be translated to English. In case there is more than one founder of the company, each of them should submit the relevant documents. It is also important for the manager to have an UAE resident visa.

Note that the bank pays attention to the previous and current experience of the applicant.

For other types of personal accounts, expats can choose a suitable financial institution based on its rates, requirements and advantages. All information needed to make this decision can be found on the bank's official website. Another option is to apply through the consultant, who will select the best financial products for you and prepare all the necessary documents. Upon solving all the organizational issues you will have to schedule an appointment with a bank representative.

To open a corporate or personal account the applicant must personally provide the original of their passport, Emirates ID and meet the representatives of the bank. Individuals can count on more favourable conditions. Some UAE banks have even begun to introduce online services such as Mashreq Neo and Emirates NBD, allowing applicants to remotely open a bank account. All you need is to enter an Emirates ID number and provide confirmation of your monthly income which should be no less than AED 5,000 (USD 1,360).

It is important to understand that citizenship of any applicant is not considered as a significant basis for denial of any service. In order to clear all doubts, the internal inspection department of the bank may demand additional information about the future client's income, personal information, business reputation and other specific questions. Thus you should be prepared for the long-term procedure of account opening.

Document preparation and legalization require special attention and thoroughness. To avoid mistakes, it is recommended to involve an experienced lawyer from a consulting company. A specialist with relevant experience will help to create a correct set of documents and may perform as an agent in the communication with representatives of the bank if needed.

Non-resident clients with a monthly income of more than USD 14,000 within the last six months are considered as reliable ones. The minimum balance of the applicant's account must be at least USD 100,000. Some banks may also require the client to join an investment programme for a period of 1 to 10 years. Note that the bank has the right to cancel the service without explanation.

To avoid disclosure of information and future problems, it would be appropriate to obtain a resident visa.