The process of setting up a business in the UAE can include steps that not everyone may feel comfortable dealing with. One of these key steps is to open a corporate bank account for the company. The company may not be in a position to practically carry out any business transactions without the existence of a corporate bank account.
Opening a corporate bank account in the UAE may be a complex affair depending upon the business activity and the profile of the company and its shareholders. The process can be draining for some and can take many rounds of document and information exchange between you and the compliance department of the bank. It requires careful consideration and compilation of the relevant documents and information to be presented to the bank. This is an area where nearly all shareholders of new companies feel uncomfortable and may require guidance.
To make things easier for you, we have listed below the 4 key steps to opening a corporate bank account in the UAE:
1. Incorporate your Company
Incorporating a legal entity is the first key step to opening any corporate bank account. It is not possible to open a corporate bank account without a company fully incorporated with a business license issued by the relevant government authority. Depending upon the nature of the legal entity being incorporated, the company formation process can include the following:
- Choose the jurisdiction and company type: Choose whether you are looking to set-up mainland, free zone or offshore company in the UAE. Once decided, choose the relevant Emirate for mainland company, free zone for free zone company or corporate registry for the offshore company.
- Choose your company name: Be prepared with at least 2-3 alternate company names in order of priority in case the first-choice name is not approved by the relevant authority.
- Choose your business activity: This activity should be selected from the list of activities offered by the relevant government authority and the selection should match with the actual business activity you will carry out.
- Finalise and submit company documents: Prepare all documents required and submit them to the relevant authority for the issuance of your company licence.
- Licence issuance: Obtain your company licence from the relevant government authority.
2. Know the Criteria and Select Your Bank
Once you have obtained your new company licence, you will need to select your bank from the many banks offering corporate bank account opening in the UAE.
Banks Operating in UAE
You can select and reach out to any of 50 local and international banks present in the UAE for your corporate bank account application. The most common banks that new companies typically set-up corporate banks accounts with include RAKBANK, Mashreq Bank, Noor Bank, Emirates NBD, Emirates Islamic Bank, First Abu Dhabi Bank and Ajman Bank. Not every bank is likely to accept application from every new company incorporated in the UAE.
Generally speaking, it may be possible to open a bank account with almost all banks for mainland companies incorporated in the UAE.
The banks are selective in cases of the free zone companies depending upon the location of the free zone. Typically, banks such as RAKBANK, Noor Bank, Mashreq Bank, Emirates NBD, Emirates Islamic Bank and First Abu Dhabi Bank accept applications from these companies.
Bank accounts for offshore companies are usually offered by banks including Mashreq Bank, RAKBANK, Noor Bank, Emirates Islamic Bank and Ajman Bank.
UAE Residency, Address and Personal Attendance Requirements
It is important to note that most of the UAE banks require the shareholders to have UAE residence visas and local address. These shareholders are also required to meet the bank in person to sign the application forms. In the case of mainland and free zone companies, these requirements are mostly met by the shareholders. However, in cases where it is not possible to meet these requirements, some banks may provide exemptions on a case by case basis.
In the case of RAK offshore companies established in the UAE, some banks may also relax the requirements of UAE residence visas and address. However, the shareholder(s) are still required to visit the bank for signing the application forms unless the bank offers any specific alternate solution on a case by case basis.
Minimum Balance Requirements
The banks in the UAE require a minimum balance to be kept in the corporate accounts on an on-going basis. The minimum balance requirements vary from one bank to the other but range between AED 20,000 and AED 500,000.
Your selection of the right bank will depend upon you meeting the above requirements.
3. Prepare Your Documents
Once you have selected the bank, you will need to obtain the list of documents required by them. Although the documentation requirements vary from one bank to the other, here is a generalised list of documents and information which all banks in the UAE typically ask for:
- Bank account opening form
- Copy of company licence
- Copy of company’s certificate of incorporation (where applicable)
- Copy(ies) of share certificate(s)
- Copy of the company’s memorandum and articles of association
- Office lease/tenancy/rental agreement (the actual name of the document may vary depending upon the jurisdiction)
- Profile of the company
- Personal profile of shareholder(s)
- Personal 6 months bank statement(s) of shareholder(s)
- Copies of passport(s) and Emirates ID(s) of shareholder(s)
- Names of three (3) suppliers and three (3) clients
Where the shareholder of the company is a corporate entity, the bank will ask for the same documents of the shareholder entity. If the shareholder entity is based outside the UAE, the relevant documents may need to be legalized up to the UAE Ministry of Foreign Affairs. The documents from the parent company will also include a legalized resolution or power of attorney issued in favour of the signatory by the shareholder entity.
Once you have collected the documents required by the relevant bank, you can submit your application for account opening. You will be required to visit the relevant branch for the submission of your application and signing the relevant account opening forms. You may wish to make an appointment with the bank by calling the bank in advance. The visit may last for up to an hour depending upon the questions that the bank representative may have and the number of documents you may be required to present for verification. You will need to take the originals of all documents required by the bank.
In some cases, based on your existing relationship with the bank, the relevant relationship manager may also be happy to visit your office or home to have the application collected and documents signed by you.
The application is then reviewed internally through various departments within the bank, most notably the compliance department. The compliance department may revert to you with additional supporting documents/information based on their review of your application. The additional documents/information may typically include signed contracts with suppliers and clients, invoices, clarifications on issues, business plan of the company and any reference letters.
The bank account opening process may take between 5 to 20 working days depending upon the additional documents and information that may be required by the bank.
Seek Professional Help
While the above process can be completed by everyone on their own, it may make things a lot easier if you seek professional help. InZone has strong relationships with major banks in the UAE and can provide you with end-to-end assistance in opening your corporate account in a hassle-free manner.