Why Is Establishing A Corporate Bank Account Challenging For New Businesses In Dubai?
Challenges Faced In Opening A Corporate Bank Account In Dubai
The thriving market of the UAE makes it a preferred location for many new businesses. Offering excellent infrastructural facilities and great connectivity, Dubai is the hub of opportunities. However, opening a business bank account in Dubai can be extremely challenging due to its strict rules and regulations.
Here, we bring you all you need to know to open a bank account in Dubai.
Challenges faced in opening a business bank account in Dubai
Applicants have to comply with several challenging demands to open a business bank account in Dubai, as mentioned below.
- A resident account holder will be required to have a resident visa and local address to be eligible for a bank account.
- Applicants need to prove their business authority and knowledge to open a bank account in Dubai. The business head or founder needs to showcase their understanding of the industry, business, and competition to justify a bank account. This can be tough to establish for a new business.
- Stringent regulatory environments and legal compliances can make it extremely challenging for new businesses to open a corporate account in Dubai. Due to the UAE’s commitment to fight financial crime, regulations such as the anti-money laundering (AML) programmes and counter-terrorist financing (CTF) make it more difficult for applicants of a business bank account.
- Applicants also require complete documentation about their business along with the physical office space before they can apply for a business bank account. Any inaccuracies can lead to problems in opening the account. Additionally, applicants should be prepared for an inspection officer to check their space in person before the account is authorised.
- A minimum amount requirement will be placed by banks for corporate accounts which can range from AED 25,000 to AED 500,000. Applicants will need to ensure they have sufficient funds to maintain their bank’s requirements to open a bank account in Dubai.
- For applicants that hail from a high-risk country or looking to do business in a high-risk country, it can be even more difficult to open a business account as banks do not transfer funds from Specifically Designated Nationals (SDNs) which can be anywhere in the world.
- For a startup, the requirements are different than for a business owner in the Mainland. Here, the founder may need to spend several hours at the bank as a signatory for the application and vetting process.
- Documents required are immense and vary as per the nature of business, number of stakeholders, and more. All documents need to be carefully arranged for and submitted to open a business bank account.
- The applicant should also have their business license in hand before opening a business bank account in Dubai. This is a crucial step to be considered eligible for a business bank account and requires its own set of documentation and procedures.
The UAE offers a host of benefits for new businesses. However, stringent regulatory and legal compliances can make simple tasks such as opening a business bank account difficult.
Conclusion
At Consultycs, our experts have an in-depth knowledge of all the regulations allowing for a smoother transition for your business. For more details, visit our website or connect with our experts.
