UAE corporate bank accounts in 2021
Since 2003, Healy Consultants Group PLC helps multi-national Clients open multi-currency corporate bank accounts in UAE for both local and overseas companies.
Our UAE team will project manage the multi-currency corporate bank account opening process, including preparing a quality business plan for our Client’s business.
We recommend our multi-national Clients read this web page to avoid bank surprises later!
UAE banking problems and solutions
No. UAE banking problem Solution 1.
UAE banks are choosy about onboarding non-UAE registered entities, and the process is difficult and costly. UAE banks prefer customers with a local presence and economic substance.
UAE banks will ask foreign registered companies to legalise corporate KYC documents with the UAE embassy in the country of origin. This can be very costly as embassy fees are as high as US$800 per document.
Since 2003, Healy Consultants Group PLC has built quality banking relationships with UAE banks. Local banks trust and welcome our multi-national Clients. A quality business plan is a big help.
As back up, Healy Consultants simultaneously contacts multiple banks, to minimise completion timeframe.
Healy Consultants Group PLC has a guaranteed corporate bank account approval policy.
Healy Consultants Group PLC Client travel policy will apply (click link). Our staff will organise the bank meeting in our Dubai office and assist our Client during the bank interview(s).
Before bank account numbers are issued, our Client must travel to UAE for a one-hour interview with the bank officer. No exceptions.
Our staff will organise the bank meeting in our Dubai office and assist our Client during the bank interview(s).
Global banks continue to tighten corporate bank account opening procedures, their internal compliance departments completing more thorough due diligence of Clients. Consequently, our Clients should expect bank account approval to take on average eight weeks.
If our Client requires a bank account at short notice, we recommend an immediate UAE solution (ready-made UAE company plus already-approved UAE corporate bank account).
UAE bank deposits are not insured. In the event of a bank failure, our multi-national Clients may lose their funds with the bank. That said, the UAE government would almost certainly step in to prevent a local bank from failing.
To diversify financial risk, we recommend multi-national Clients deposit their funds with multiple banks in multiple different countries.
Depending on the business activity, banks now require proof of business in the UAE, including sales contracts or lease agreement.
Healy Consultants will help our Client meet UAE Economic Substance Requirements.
UAE banks consider tax haven entities to be high risk customers, and do not welcome corporate bank account applications from these potential Clients.
The majority of UAE banks only provide telephone support during UAE business hours. This is inconvenient for multi-national Clients in Asia Pacific or the USA.
Healy Consultants Group PLC staff assist our multinational Clients with bank communication, regardless of time zones.
Just like the majority of international banks, it is common for UAE banks to close corporate bank accounts, without giving an open, transparent reason to their customers. To close a customer bank account without giving the bank signatory an opportunity to explain ‘unusual transactions activity in the corporate bank account’ is an unfair, unreasonable action which places our multi-national Clients' business under stress.
We recommend our multi-national Clients open multiple multi-currency corporate bank accounts for their entity. It is unwise to open one corporate bank account and have your business be dependent on one bank.
As we advance deeper into a global depression, it will become more common for banks to experience financial difficulties. Consequently, multi-national Clients should expect i) small banks to go bankrupt and ii) small to medium-sized banks to be bought over by top tier banks. The number of banks operating in each country will get smaller, exposing our multi-national Clients to financial risk. UAE bank deposits are not insured to protect depositors’ money.
For each of their entities, we recommend our multi-national Clients open multiple multi-currency corporate bank accounts across multiple countries. Spread your funds across multiple corporate bank accounts in multiple top-tier banks in multiple different countries. Avoid small banks including PSPs FSPs and digital banks. Ensure each bank offers customer deposit insurance.
The UAE banking sector
Healy Consultants Group PLC’s summary view
- The UAE is a global financial centre, with a well-regulated, stable banking system. Historically, the UAE is seen as a ‘safe haven’ for capital flows from volatile areas of the Middle East, Africa and West Asia, Russia and India. The UAE Central Bank has a reputation for maintaining UAE financial system stability. The UAE dirham has been pegged to the US dollar since 1980.
- The UAE economy and banking system is vulnerable to i) regional conflict and uncertainty and ii) international efforts to combat terror financing and money laundering and iii) low oil prices.
- UAE banks are well capitalised, comfortably exceeding minimum regulatory requirements. Total assets of the 18 listed UAE national banks rose to around US$816 billion in the first half of 2020, up 8.2% on the same period of 2019. However, bank asset quality will deteriorate in 2021.
- In a challenging operating environment post-COVID-19, we predict more UAE bank mergers. This is likely to result in greater short-term instability, but greater long-term stability, in the country’s financial system.
- In January 2021, foreign currency reserves in UAE were US$99.94 billion, 3% higher than in July 2020. The UAE government’s sovereign credit rating is Aa2 (Moody’s), AA with stable outlook (Standard & Poor’s) and AA- with stable outlook (Fitch).
Key information on the UAE banking sector
- The UAE Central Bank regulates and supervises 45 commercial banks, along with investment banks, Islamic banks, money changers, financial intermediaries, financial investment companies and investment companies.
- Healy Consultants Group PLC works with internationally-recognized banks such as HSBC, Barclays, Standard Chartered, Citibank and major UAE banks such as Emirates NBD, Emirates Islamic, Noor Bank, Mashreq Bank and United Arab Bank. These banks offer the best internet banking and customer care.
- As well as UAE dirham accounts, local banks offer accounts in multiple currencies, including US$, Euros, Sterling and other global currencies.
- UAE banks offer savings, deposits and checking accounts, online banking, currency exchange, foreign currency banking, wire transfers, ATM services, wealth management, loans, LCs, treasury, hedging and advisory services.
- Most banks in the UAE charge an account opening fee and have minimum balance requirements. If the balance falls below the minimum requirement, fees apply.
- For both onshore and offshore companies, UAE banks require each signatory and director to have a one hour face-to-face interview with a bank officer as part of bank AML/CFT obligations. Unfortunately, even if our Client travels to UAE to meet the bank, there is no guarantee that the account will be opened.
- On average, UAE banks take on average eight weeks to issue corporate bank account numbers after a face-to-face meeting with the bank signatory.
- Even the smallest transactions can be completed in UAE by local and international debit and credit cards, as well as methods such as Apple Pay and an array of other payment gateways. Nearly all ATMs in UAE accept international cards, many offer withdrawals in US dollars, and some have high daily withdrawal amounts of at least Dhs5,000.
- Most UAE bank branch staff speak English, and correspondence and online banking etc is available in both English and Arabic. Bank officers are friendly and respectful and want to serve. It is possible to communicate with bank officers by email.
- If you open a foreign currency account along with a UAE dirham account, transfers can easily be made between the two. In 2021, UAE banks pay up to 1.6% interest on UAE dirham fixed deposits.
- The UAE is a signatory to the Common Reporting Standard (CRS), a global initiative to clamp down on tax evasion. UAE banks share information on accounts and account holders with tax authorities where the company/individual is tax-resident.
- Under the Foreign Account Tax Compliance Act (FATCA), since 2015 UAE banks report information on US account holders to the US Inland Revenue Service (IRS).
- The UAE is also a signatory to the Basel Committee, which regulates global banking practices.
- There are no foreign exchange controls in UAE. Funds for remittances of profits, dividends, debt service, capital, capital gains, branch profits, royalties, and returns on intellectual property or imports flow freely. Foreign individuals and companies are also free to open personal or corporate multicurrency bank accounts in UAE.
- That said, all travelers entering the country must fill a declaration when bringing cash amounts equivalent to or higher than US$27,226.
Healy Consultants Group PLC fees to help open a corporate bank account in the UAE
Healy Consultants Group PLC guarantees UAE company bank account approval.
UAE banking task Our Client travels US$ UAE bank account for a foreign company Yes 5,950 UAE bank account for a UAE offshore company Yes 4,950 UAE bank account for a UAE company Yes 4,950 UAE private personal bank account Yes 2,950 UAE brokerage account Yes 4,950
The fees above do not include i) expenses to cover our Client’s trip to UAE ii) notarization and attestation fees or iii) bank charges and opening fees (if any).
Our UAE multi-currency corporate bank account opening fees cover the following support services:
- Creating a quality business plan for UAE banks, explaining the purpose of the business and future banking transactions.
- Simultaneously submitting bank applications to multiple UAE banks;
- Securing a welcome email from at least one UAE bank, inviting our Client to submit a multi-currency corporate bank account application.
- Healy Consultants Group PLC’s Banking Team completing, on our Client’s behalf, the multi-currency corporate bank account application forms and collating Know Your Customer (KYC) due diligence documents.
- Healy Consultants Group PLC’s staff meeting our Client in UAE and accompanying our Client to face-to-face meetings with multiple local banks to open multi-currency corporate bank accounts.
- Following successful completion of the above, the bank officer submitting a complete potential customer file to the bank Legal and Compliance Department. Note that the bank In-house Legal and Compliance Department may revert multiple times for additional documentation and information from i) each bank signatory / director / UBOs of the companies as well as ii) our Client’s business and transactions).
- If a bank declines to board our Client’s business, Healy Consultants Group PLC immediately inform our Client and action back-up banking solutions.
- In an average of two months following application submission, Healy Consultants Group PLC securing multiple multi-currency corporate bank account numbers for our Client’s UAE company.
- Thereafter, Healy Consultants Group PLC, or the banks, couriering mails, and e-banking tokens to the bank signatory, who is expected to activate the internet bank account, with Healy Consultants Group PLC’s assistance if needed.
- After corporate bank account numbers are secured and, if required, Healy Consultants Group PLC assisting our Client to appoint more new shareholders and directors. However, the banks will usually only approve them as bank signatory after a face-to-face meeting and the review and approval of a bank signatory application.
Considerations when opening a bank account in UAE
- UAE banks have tightened their account opening procedures, especially for foreign companies.
- The UAE government requests local banks to implement strict ‘Know Your Client’ procedures. Therefore prior to bank account opening, our Client will be required to submit i) detailed information on the company’s activities (including proof of business in the UAE such as examples of contracts, invoices etc) ii) information on the company’s Clients and suppliers iii) background information on shareholders and directors and iv) financial projections. Our corporate banking team will assist in preparing the necessary company documents to the bank’s satisfaction.
- Every UAE bank will request our Client to submit legalized and attested company documents before the corporate account can be opened. Therefore, to save our Client’s time, Healy Consultants Group PLC will preliminarily confirm with our preferred bank the documentation our Client needs to attest. A local company should budget approximately US$2,000 for attestation fees. For a foreign entity, budget US$5,600 for attestation fees (seven documents @ US$800 each). If the company (local or foreign) has a complex structure, then the Client should budget for over US$7,000 in attestation fees.
- In addition to the information required by the bank, Healy Consultants Group PLC requires additional Client due diligence documents to better assist our Clients with their UAE banking requests.
- The bank must receive the complete set of documents requested by the bank within three weeks of the Client’s trip to UAE. Failing to timely supply the same means the bank will cancel the application and we will need to re-apply for bank account opening. Our Client will need to travel again to UAE for a one-hour interview.
- It will take two weeks for our corporate banking team to prepare the complete UAE account opening application/proposal for submission.
- Some UAE banks prefer to communicate directly with our Client and will not put Healy Consultants Group PLC in the loop for security purposes. In this case, our team will assist our Client to prepare quality answers to the bankers’ questions and requests.
UAE brokerage account
- A UAE brokerage account is popular among Clients seeking a trading platform in the Middle East. Although Middle East stock exchanges are less developed than those in Europe, the US or Asia, there has been an increase in turnover volumes and demand for UAE brokerage accounts.
- Setting up a brokerage account in UAE also enables Clients to trade on European and American stock exchanges.
- Some of the most dynamic emerging markets are in the Gulf. Fund managers are seeking investment opportunities in UAE, Bahrain, and Qatar. Setting up a brokerage account in UAE is, therefore, an excellent strategy for our Clients to tap into these markets.
- Services offered when setting up a UAE brokerage account include equities trading in the Middle East, an optimal cash account, a margin trading account, FX and futures margin trading, securities borrowing and lending, funds and unit trusts, fixed income investments, research products including daily and weekly updates, company research reports, and sector focus reports.
- A UAE brokerage account will be subject to charges including i) brokerage commissions ii) data fees iii) stock transfer charges iv) value-added services such as charges for real-time price quotes and research tools, interest rates for margin loans, and management fees for discretionary accounts.
- UAE banks are willing to provide finance to local companies if the following conditions are met: i) submission of a good business plan ii) availability of security iii) experience of the business owners iv) auditing of the financial statements of the last three years v) availability of a realistic feasibility study and vi) report of the project’s strength and weaknesses analysis (SWOT).
- Trade finance includes i) bank guarantees ii) letters of credit iii) finance against trust receipt as well as iv) document against payment and against acceptance.
- Corporate finance in the form of a loan, overdraft or simply preferential credit terms.
- Some multinational Clients seek trade finance to i) boost working capital ii) better manage cash flow iii) benefit from economies of scale by buying in volume and iv) reduce bankruptcy risks.