The challenges of opening a bank account in Dubai have proven to be a serious roadblock for foreign investors. The intense Know Your Customer (KYC) scrutiny to prevent money laundering and terrorist financing (ML-TF) is often cited as the top reason for the difficulty in opening a bank account in Dubai.
The constant delays and fears of potential rejection may dishearten the foreign business owners in Dubai. However, it is nearly impossible for companies to operate without a corporate bank account in Dubai. Providers of bank account opening services in Dubai have come up with a new solution to address this grave challenge: “an international bank account”.
In this blog, let’s discuss some of the hurdles of opening a business bank account in Dubai and how an international bank account can be a robust solution:
Difficulties in opening a bank account in Dubai
Foreign investors often struggle to open a bank account in Dubai for the reasons listed below:
Need for Economic Substance
Economic substance is one of the reasons for the rejection of bank account opening applications in Dubai. The local banks want to make sure that your business has a real physical office in Dubai at the address specified in the documents.
The bank may ask you to share information on employees, the magnitude of the cost of rent and wages, audited reports, founders’ biographies, financial plans, potential suppliers and planned customers etc. Many companies, especially offshore companies may find these requirements practically impossible to meet.
Residency Requirements
Having a UAE residency visa is a key requirement for opening a bank account in Dubai. Banks may ask you to provide the Emirates ID as well. Some banks may even ask to submit proof a local address in the UAE. Talk to companies providing bank account opening assistance in Dubai if you find this requirement tough.
High-risk business activities
If your company’s business activity is categorized a high-risk activity, your UAE bank account opening process will be delayed. High-risk activities are among the top reasons for bank account opening application rejections in Dubai. The inclusion of the following high-risk activities can be among the reasons why your bank account applications get rejected by banks in the UAE:
- Insolvency services
- Investment business
- Trust & corporate services
- Aggressive tax schemes
- Real estate management
- Payroll services
- Consultancy services
- Activities that can be used to conceal the real beneficiary owner’s identity
Business with High-Risk Countries
If your company has business relations with some high-risk countries, banks may deny your bank account opening application in Dubai. Bank account opening services providers in Dubai can advise you in such cases.
Politically Exposed Persons
Banks will check if you are a Politically Exposed Person (PEP) or you are related to one. PEPs are a high-risk in terms of banking requirements in Dubai as they can influence government policies, determine the outcome of public funding or procurement decisions, or obtain access to public funds.
Background history of hareholders
Banks in Dubai may check the financial background and history of the business owner and shareholders. This requires you to demonstrate to the banks your knowledge about your industry. The local banks may also check your credit worthiness. Physical presence of business owners or shareholders is one of the key requirements for opening a bank account in Dubai while signing the documents.
How an International Bank Account can Solve your Troubles?
The delay in opening a bank account in Dubai can put pressure on your business dreams. However, opening an international bank account in Dubai is a robust solution to this problem. The following are the key benefits of opening an international bank account in Dubai:
- Available to mainland, free zone and offshore companies
- Online KYC verification; no need for physical presence of shareholders in the UAE
- Global payment facility
- Link with e-commerce platforms & payment gateways
- Ability to perform payment between business & personal accounts
- One-on-one online customer service in many languages
- Debit cards that can be used locally in the UAE as well
JBC can Offer you Bank Account Opening Assistance in Dubai
You may have always wondered why opening a bank account in Dubai is difficult. Hopefully, you might have found a satisfying answer to that question and a solution to the difficulties in UAE bank account opening process. Providers of corporate bank account opening services in Dubai such as Jitendra Business Consultants (JBC) can help you mitigate such challenges through the internal bank account facility.
JBC’s highly consultants can assist you in opening an international bank account in Dubai. Our international banking solution is available to mainland, free zone and offshore entities registered in the UAE. Book a consultation with JBC to simplify the process of bank account opening in Dubai, UAE.
