The UAE (United Arab Emirates) has a booming economy, and is home to large populations of expatriates from around the world. Many people move to the regional hubs such as Dubai and Abu Dhabi for business, and may settle there for the long term. If you’re planning on doing business in the UAE, either by setting up your own company and moving there, or expanding an existing business into the region, you may want a local bank account.
This guide covers the facts you need to know about business banking in the UAE, including:
- The types of business structures used in the UAE
- Practicalities of setting up a business bank account
- The documents you may need to prepare and present
- Fees and charges you’ll want to consider when you choose an account
We’ll also cover an alternative to opening a local bank account - the borderless account for business from TransferWise. This multi-currency account is great if you need to hold a balance in different currencies, switch between them, and send and receive payments from around the world. Currency conversion is always done using the mid-market exchange rate so there no markup to pay - just a low transparent fee which can work out cheaper than traditional banks. More on that later.
Corporate law in the UAE is fairly complex. Different Emirates may do things differently, and there are also a number of Free Zones where the rules relating to company formation may vary. If you’re thinking of setting up your own business in the UAE you’ll probably need formal legal advice to make sure you’re covering all the bases.
That said, here’s a rundown of the most common business structures used¹:
- Sole proprietorship
- General partnership
- Limited liability company
- Foreign company branch or representative office (not in a Free Zone)
- Public joint stock company
- Private shareholding company
- Free Zone entities - which may be fully foreign owned but come with certain restrictions on activities allowed
It’s legal to open a business bank account in the UAE with a foreign registered company. However, there are quite a few hoops to jump through, to fulfil local legislation. Firstly, any documents you present may need to be translated and notarised both in the country the business is registered in, and again in the UAE. This is a costly and time consuming process.
You will then need to share a good deal of information with your bank, about yourself, your business and your future plans, to fulfil their duty to stop illegal activity or money laundering. Banking the world over is risk-averse, and the UAE is no different. Checking up on foreign owned businesses with no local credit history is tricky - but legally necessary. Prepare to need to answer a lot of questions to convince a local bank to allow you to open an account.
If this sounds off-putting, you have a few options. You can form a business in the UAE with local partners, which may make the checking process simpler. Or you may be able to get help from your local bank at home. If you already have an account with a global bank which operates in the UAE, they may be able to support some of the process to speed things along. Alternatively, consider a different approach, such as getting a multi-currency online account. More on that now.
Although setting up a local business bank account in the UAE might be your first thought, it pays to consider all your options. For example, depending on the situation you may also benefit from a multi-currency account which covers both AED and AUD so you can switch between currencies easily.
If that sounds good, a great option could be the TransferWise borderless account for business. You can hold over 40 currencies and open your account entirely online, with security and ID checks done remotely. That can make it more straightforward to get set up - and the intuitive app used to manage your money can also save you admin time thanks to business friendly perks like batch payment solutions and Xero integration.
Borderless accounts come with your own Australian bank details so you can still receive fee free payments in AUD from anywhere in the world. You can also send and receive international payments, and switch between currencies you hold in the account using the mid-market exchange rate with no markup. There are no hidden fees, just a low transparent fee per transaction.
It’s usually necessary to attend a face to face meeting with a bank in the UAE before they’ll offer you a business account. You’ll need to take along paperwork and provide signatures before your account will operate.
The length of time you need to get your account set up will depend a lot on the bank, the account type, and your business. In Free Zones and with locally registered LLCs, the time scale may be relatively short - 2 to 4 weeks including your face to face meeting. It may take longer in other circumstances.
There are many agents working in the UAE who are there to help walk you through the process of opening a business bank account. They charge a fee, but may be able to help guide you towards an account which will work well for your business².
Make sure you confirm the documents needed before you go along to your bank, as each will have its own protocols. The type of documents you’re likely to need include²:
- A completed application form
- Passports or other government ID for the owner and all shareholders
- Company certificate of registration and trade license
- Share certificates
- Company Memorandum and articles of association
- Board resolution meeting minutes confirming the opening of the account has been approved properly
Whether or not you can open an account - and the facilities available to you - will be down to the discretion of the bank. There’s no legal reason why you can’t have an account as a non-resident - either for personal or business use. However, in practise many banks limit the type of account they offer to non-resident, which may mean your local account isn’t as useful as you’d like it to be².
It’s normal to need to meet staff from the bank you’ve chosen in person before you can get your account up and running. This makes it nearly impossible to open an account until you’re able to visit the UAE and arrange a meeting.
Many banks operate in the UAE. However, as in many countries, you’ll find a ‘Big 4’ which dominate the market. Looking at these banks as a starting point to find the right account for you is a smart plan, as they have a wide range of banking products for businesses. Check out:
- First Abu Dhabi Bank
- Emirates NBD
- Abu Dhabi Commercial Bank
- Dubai Islamic Bank
- Large branch and ATM network throughout the UAE
- Multiple business accounts on offer, including options for businesses of different sizes
- Online banking
- Minimum average balance of AED10,000-AED500,000 depending on the account type you need
- One of the largest banks in the UAE
- Business current account, fixed term deposit and call deposit accounts available
- Accounts can be held in a range of different global currencies
- Bill payment facilities available
- Over 50 branches across the UAE and a further 2 in India, wide ATM network for customer use
- Range of business banking products suited to different customers
- Shariah compliant banking if needed
- Current account comes with perks like preferential pricing and discounts on online payments
- Network of 90 branches to choose from
- AED50,000 minimum account balance for business account
- Credit cards and loan facilities for business customers
- Convenient online banking and unlimited withdrawals for some account types
UAE banks may not structure their fees in the same way you’re used to, making it especially important to check over the small print before you choose an account. Many accounts have minimum balance requirements, for example. If you don’t hold this amount on average over the month, you’ll be charged an additional fee to maintain your account. This can quickly become expensive if you select the wrong account for your needs.
You may also use your UAE account differently to your regular business banking account. For example, you’re likely to need to make payments internationally if you want to send money made in the UAE back to your home bank account in Australia. Moving money across borders can be expensive with a traditional bank. There are admin fees to pay, and you might also find that a markup has been added to the exchange rate used.
In many cases you’ll be better off if you use a currency and international payment specialist to make your overseas transfers. Try TransferWise to see if you can save.
Getting your business - and business bank account - set up in the UAE may feel a little daunting. There are differences in the way business is done to take into consideration, and the way banking operates may feel a little unfamiliar too. There are many agents available to help walk you through the processes required, and make sure you have all your legal bases covered, so you can concentrate on keeping your customers happy. Make sure you find the right business account for your needs, by researching a range of local options alongside modern alternatives such as the borderless account for business from TransferWise and you could be up and running in no time.
All sources accurate as of 24 July 2019
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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