Over the last decade, Dubai, along with the entire UAE, is witnessing exponential growth – both in terms of infrastructure and capital.
The country is becoming home to over 30,000 new businesses every few months.
Even though the 9% tax and ease of company setup are attractive for business owners from all over the world, there are still a variety of anomalies involved in opening a business in the UAE.
This is more relevant when it comes to opening a business bank account in the UAE – which is why we wanted to dedicate ourselves to an important process like this.
This guide contains all the information you need to open a business bank account in the UAE.
Let’s get started.
Introduction
Before you start looking for a step-by-step method to open a business bank account in the UAE, start by understanding the ins and outs of this process first.
And that won’t be possible without understanding the different types of business regions in the UAE and their functionalities first.
So let’s talk about them.
The Business Regions in the UAE
The UAE is a unique place, especially in terms of business.
It consists of various economic zones, each catering to specific business needs. Before you start a business in the UAE, you should be acquainted with these regions.
These areas are Free Zones, Mainland, and Offshore.
1. Free Zones
Free Zones are specialized economic areas within the UAE that offer a range of benefits to businesses looking to establish a presence in the country.
These zones are designed to attract foreign investment, promote economic diversification, and foster innovation.
Free Zones provide a business-friendly environment with simplified procedures and regulations, making it easier for companies to set up and operate.
- Companies established in the Free Zones are typically exempt from corporate and personal income taxes for a specified period, which can be extended.
- Additionally, businesses in Free Zones often enjoy full ownership rights, meaning that foreign investors can own 100% of their company without the need for a local partner.
Free Zones are the main attraction for almost every business owner shifting to the UAE.
2. Mainland
Mainland businesses are subject to the laws and regulations of the UAE – including those related to foreign ownership restrictions.
So what’s the benefit of working in the mainland?
- Businesses can trade directly with the local market without any kinds of restrictions.
- Businesses also have the flexibility to operate across the entire UAE and engage in government projects.
3. Offshore
Offshore regions in the UAE, such as Ras Al Khaimah (RAK) International Corporate Centre (RICC) and Jebel Ali Offshore, offer a unique set of advantages for international businesses.
Offshore companies are typically used for holding assets, wealth management, and international trade.
They are not allowed to conduct business within the UAE but can engage in activities outside the country.
These entities are popular choices for individuals and businesses looking to structure their international holdings and enjoy a favourable tax environment.
- Offshore companies in the UAE benefit from tax exemptions, confidentiality, and simplified regulatory requirements.
- Offshore companies also provide a high level of privacy and asset protection, making them attractive for wealth management purposes.
What You Need to Know Before Opening a Business Bank Account in the UAE?
Now that you’re aware of the business regions in the UAE, the next step is to understand the impact of these regions on your business bank account opening.
Here’s what you non-negotiably need to know:
1. Company Type and Eligibility
The UAE offers different business structures.
These include Limited Liability Companies (LLCs) in the Mainland, Freezone entities, branches, or subsidiaries.
The type of business you operate will dictate which banks you can approach for a corporate bank account.
Freezone businesses often have specific regulations and benefits, and banks within these zones may cater to businesses registered there.
Mainland businesses, on the other hand, may have a broader range of banks to choose from.
2. Bank Signatory Requirements
During the initial stages of the account opening process, it’s usually important to physically be present for the process.
There’s a need for verification of documents and to establish you as a signatory for the business account.
It’s essential to confirm with the chosen bank whether your presence is mandatory or if there are alternatives, such as appointing a local representative or using a power of attorney.
We’ll talk about this more down in this guide.
3. Document Submission
The documentation required for opening a business bank account in the UAE is comprehensive.
It typically includes information about the company’s operations, the number of shareholders, details on the management team’s qualifications, and a well-structured business plan for the new entity.
You’d usually be asked for certified copies of your company’s legal documents, including the Memorandum and Articles of Association, Certificate of Incorporation, and licenses.
4. Privacy Considerations and Compliance
While the UAE values privacy, recent agreements with other countries to combat tax evasion have resulted in increased transparency and compliance measures.
Ensure that your business operations and financial activities align with local regulations and international standards.
This includes understanding the implications of tax agreements and providing accurate financial information to the bank.
5. Additional Services and Fees
Inquire about the range of services offered by the bank, such as online banking facilities, credit facilities, and support for international transactions.
When we at AB Capital facilitate a business bank account opening for you, we make sure to give you a detailed pricing structure that involves every cost during the process of bank account opening.
Also, be aware of any associated fees, including account maintenance charges and transaction fees.
Types of Bank Accounts in the UAE
For your business, there are a variety of bank account types that you can settle with.
However, the option that you settle with ultimately depends on the requirements of your business.
1. Current Account
A current account is one of the best choices for businesses that are engaged in daily financial transactions.
It offers easy access to funds, enabling seamless withdrawals and payments without stringent restrictions.
This account type is ideal for enterprises with a high volume of regular financial activities, providing the flexibility needed for daily operations.
2. Savings Account
Businesses looking to earn interest on surplus funds often opt for a savings account.
This account type is suitable for companies seeking to enhance their idle capital, as it offers a lower interest rate on the amount held in the account.
While not intended for frequent transactions, a savings account provides a secure avenue for businesses to accumulate interest on their unused funds.
3. Fixed Deposit Account
For businesses that have surplus funds that won’t be immediately utilized, a fixed deposit account presents an attractive option.
This account type offers higher interest rates over a predetermined period, making it a prudent choice for companies looking to maximize returns on their idle capital.
The fixed nature of these deposits provides stability and predictability for businesses in managing their financial resources.
4. Multi-Currency Account
Businesses engaged in international trade or requiring the management of funds in multiple currencies benefit from a multi-currency account.
This account type allows companies to hold various currencies within a single account, streamlining financial operations and minimizing currency conversion costs.
The flexibility of a multi-currency account is particularly advantageous for enterprises with global reach, simplifying transactions and reducing complexities associated with fluctuating exchange rates.
In addition to these types of business bank accounts, a lot of banks in the UAE also offer specialized accounts that are tailored to your business’s needs or the size of your operation.
One of the best ways to ensure you’re making the right choice is to consult a professional first.
Documents Required For Business Bank Account Opening in the UAE
Almost every bank account that you’re planning to open a business bank account with, will require a set of documents.
Here is an expanded overview of the required documents for opening a business bank account in the UAE:
1. Resolution from the Board of Directors
Typically, a resolution from the board of directors of the company is a prerequisite.
This document formally approves the decision to open a corporate bank account in the UAE. It should also specify the authorized signatories on the account.
2. Business License
A copy of the organization’s current business license is mandatory.
This serves as proof that the company is duly registered and authorized to conduct business in Dubai.
The business license is a critical document that establishes the legality of the enterprise.
3. Share Certificates
Copies of share certificates detailing the ownership structure of the company are required.
This documentation provides clarity on the distribution of shares among partners and shareholders.
4. Passports of Authorized Signatories
Copies of the current passports of individuals authorized to sign on behalf of the company are necessary.
This includes identification documents of all Partner/Shareholder/Authorized Signatory which includes Passport, emirates ID and VISA copy.
5. Memorandum of Association and Articles of Association
Submission of the company’s Memorandum of Association (MOA) and Articles of Association (AOA) is a standard requirement.
These documents outline the organizational structure, objectives, and governing principles of the company.
6. Additional Documentation Requirements
Depending on the specific bank chosen, there may be additional documentation requirements.
Some banks in Dubai might request invoices, letters of recommendation from business partners, a comprehensive business plan, and details about the proposed lines of operation.
Entrepreneurs should be prepared to fulfil any supplementary requests from their chosen banking institution.
It’s important to know all the specific requirements of the bank you choose, as these may vary.
Ensuring these documents’ accurate and timely submission streamlines the business bank account opening process in the UAE, contributing to a smoother establishment of a business presence in the region.
Fee Structure for Corporate Bank Accounts in the UAE
Different banks have different fee structures when it comes to business bank accounts.
This is why we will be using averages in the section – to mention what the fee structure for certain accounts is like.
1. Current Accounts
Current accounts are the most common and versatile type of business bank account in the UAE. They provide easy access to funds, allowing businesses to carry out daily transactions efficiently.
Account opening comes at different costs, but maintaining a minimum average balance is crucial.
Monthly penalties may apply if the minimum balance requirement is not met.
2. Foreign Currency Accounts
For businesses engaged in international transactions, foreign currency accounts allow them to hold funds in different currencies. This helps mitigate currency exchange risks.
Opening fees and minimum balance requirements for foreign currency accounts may vary. Some banks may charge additional fees for currency conversion.
3. Islamic Business Accounts
Compliant with Islamic finance principles, Islamic business accounts operate on a profit-sharing basis. Instead of interest, account holders share profits and losses with the bank.
Islamic business accounts may have unique fee structures, emphasizing ethical and Sharia-compliant practices.
Fee Structures for Corporate Accounts in Dubai
Activity | Fees |
Minimum Balance Requirement | Banks in the UAE often require a minimum average balance, ranging from AED 5,000 to AED 500,000, depending on the institution. |
Not Maintaining Minimum Balance | Failure to meet the minimum balance may result in non-maintenance charges – typically AED 50. |
ATM Charges | A nominal fee, usually around AED 2, may be charged for using another bank’s ATM. |
Cheque-related Fees | Fees for new chequebook issuance, manager’s cheque issuance, and bounced cheques are standard, with amounts ranging from AED 25 to AED 100. |
Account Closure Fee | You can close your bank account in Dubai for free. However, your bank might require you to pay a fee if you close the account within six months of opening it. |
Open a Business Bank Account With AB Capital
We understand that so many details and formalities in opening a business bank account seem like a daunting process.
But we simplify all this for you.
With careful navigation and complete transparency along the way, we at AB Capital help you open a business bank account in just 7-10 working days.
Yup!
JUST 7-10 WORKING DAYS!
Book a free consultation call with us and let us help you successfully open a business bank account in the UAE.
