Financial services and banking in Dubai

Banking in Dubai has been steadily developing since 1980 when the Central Bank of the UAE was established in the country. Rating agency Moody's classifies the banking system of the United Arab Emirates as stable due to high liquidity and the preservation of bank capitalization levels.

Due to the region's investment attractiveness, many companies are opening bank accounts here, allowing them to conduct business both domestically and internationally. The process of opening an account may seem complex and confusing to those unfamiliar with local rules and requirements. In such cases, consulting agencies come to the rescue, taking on much of the functions associated with this procedure.

Types of bank accounts

The banking sector in Dubai offers services for opening both corporate and personal accounts.

Personal accounts – for residents

Residents of the country receive many benefits when opening a deposit bank account, including:

• accelerated procedure;
• access to all available banking products;
• free issuance of checkbooks;
• personal manager support.

Corporate

When opening a corporate account, the bank takes into account the jurisdiction, meaning where the company is registered: in a free zone or on the mainland.

Financial institutions pay special attention to the following factors:

• company type – preference for offshore;
• residency of shareholders in the UAE;
• type of activity;
• company structure;
• nationality – there are nationalities for which it is more difficult to open an account, and stricter requirements apply to them;
• lack of convictions;
• turnover on the account in the bank of the country of residence;
• amount of funds – minimum balance requirement.

The readiness of the company to use additional financial services of the bank, such as insurance, is also taken into account.

Banking in Dubai and other emirates has several peculiarities. There is a requirement to maintain a minimum balance. Violation of this condition leads to penalty sanctions.

Opening a personal account for residents requires a passport, visa, Emirates ID, salary certificate, and proof of residence in the country (property ownership certificate for a house or apartment Title Deed, Ejari lease agreement, and utility bills).

Another necessary condition is providing proof of address. This can be done by providing a copy of the Ejari lease contract for housing and utility bills.

It is also worth mentioning that some banks conduct a check on the client's financial reputation and credit history. Having debts or financial problems can negatively affect the bank's decision.

For a company opening an account, the following documents must be provided:

• passports, resumes, Emirate ID, visas of shareholders;
• company memorandum and articles of association;
• license;
• registration confirmation (certificate);
• contracts confirming the organization's activities;
• three clients and three suppliers;
• confirmed legal address of the company in the UAE and Ejari lease agreement;
• bank statements for shareholders' accounts (for a six-month period).

It is also important to note that when opening an account in Dubai, the company must provide documents confirming the source of financial funds. These measures are taken to combat money laundering and terrorist financing.

How long does it take to open a bank account

The processing period depends on several factors:

• residency status;
• company activity type;
• account type – deposit or current.

The timelines range from three weeks to four months (for companies registered in free zones). Residents can expect a period of 1-4 weeks.

Special Features of Selection

When choosing a bank in Dubai, its reputation, service conditions, fees, and online banking capabilities are important factors.

One of the most popular banks in Dubai is Emirates NBD. It is a state-owned financial institution offering a wide range of services and products for both individuals and corporations. The bank has a well-established network of branches and ATMs.

Dubai Islamic Bank (DIB) is the first fully Sharia-compliant bank in the UAE. DIB offers an impressive range of financial services without using interest rates, as well as convenient online banking, including in English.

For those interested in investments or asset management, Mashreq Bank is worth considering. This semi-governmental banking structure provides portfolio management services and investment opportunities through its subsidiary, Mashreq Capital.

One of the most reliable banks in the UAE is the Commercial Bank of Dubai (CBD). The bank operates 26 branches in the country, and its total assets exceed 10 billion dollars.

The largest bank in Dubai is Emirates Islamic Bank. Its total assets amount to 500 billion AED, and its net profit is 10 billion AED.

Opening an Account in the UAE by a Foreign Company

Opening a corporate account requires the presence of a branch or representative office in the UAE. Tightening control in banking has led to the fact that since 2017, it is impossible to open an account for a classic offshore company or a European onshore one if there is no identical company in the country of residence.

However, nothing prevents owners from registering a representation of their company in the UAE and opening a current account for it if there is an identical company in the country of residence. In this case, it is desirable for the company's activities to be related to the Middle Eastern region. Otherwise, the bank may have questions during checks.

If the company is registered in one of the free economic zones or has a license to provide services in the UAE, there should be no special problems.

The Level Consulting company will assist at all stages of opening a current account, starting from collecting documents and ending with a meeting with a bank manager. The agency's employees will select not only a bank for opening an account but also optimal banking products that will stimulate the development of your business.

Advantages and Disadvantages of the Process

Dubai is the center of technical and financial innovations in the entire region. Individuals and companies can choose from a large number of banks, allowing them to find the most suitable option that meets all client requirements.

Banks in the UAE offer clients a high level of service, innovative technologies, and a variety of financial products.

It is also worth mentioning the following obvious advantages:

• no restrictions on the withdrawal of funds;
• no currency control;
• support for IBAN work;
• deposit interest rates outperform inflation;
• no income tax in the free economic zone and capital gains.

Another competitive advantage of opening an account is the high level of confidentiality and data protection. The country has strict laws on protecting customers' personal information, ensuring security. In addition, the UAE does not exchange information on bank accounts with countries under automatic information exchange, making them attractive to clients from high-tax countries.

Among the drawbacks, it is worth mentioning the limited financial products for non-residents and the need to maintain a minimum balance on accounts.

Opening a bank account in Dubai is an important step for those who want to develop their business or invest in the local economy. The right choice of bank and assistance from The Level Consulting agency will streamline the account registration process and create new opportunities for successful business conduct in the UAE.