Points to be considered while Opening a Business Bank Account

Opening a bank account is always a stressful task for shareholders and company owners. Due to newly implemented guidelines, ever-changing compliance regulations and international protocols opening an account is a very time-consuming process over recent years.

But the good news is that once you’ve selected the right company structure and facilities you can easily overcome the major banking hurdles and have the ability to be eligible for UAE corporate banking and enjoy the benefits of no corporate or personal tax.

To ease down your stress, here we will explain to you the process of initiating a Business Bank Account in the UAE.

Phase 1 – Establish your Company

To initiate the process of establishment of a business bank account it’s important for you to have a Business Plan as following:-

1. Company Profile – It’s a description of services that the company provides, its values and mission, and a description of unique assets that it possesses.
2. No. of Clients/Vendors – List down the number of Clients and Vendors your company possesses.

After making a business plan, it’s time to obtain the Trade License which includes the following:-

1. Choose the right business activity – Selection of the right business activity is very important. If you are offered a service that is not a service, you may face issues when it comes to audits.
2. Obtain the office/shop/warehouse – Obtaining an office/shop/warehouse is a compulsion and mandatory requirement to get your trade license in the mainland. In the Free zone, you can obtain the License with Flexi/Share desk facility but bank compliances will be on the higher side. 

You should know, there are two types of bank account – UAE resident bank account and Non-UAE resident bank account.

To establish a business bank account in the UAE, one must have a UAE residence visa, then you’ll be eligible to obtain a UAE resident bank account. In certain cases, the client would like to establish a license without a residence visa, so the business bank account will be Non-UAE Resident Bank Account.

Note: Non-UAE Resident Bank Account will not receive checkbooks or debit card. You can only do online transactions.

Phase 2 – Choose a Bank

There are several banks to choose from as per the requirements including Emirates NBD, Noor Bank, RAK Bank, Mashreq Bank, Emirates Islamic Bank and First Abu Dhabi Bank (FAB), etc. The one that’s right for you will depend on your specific requirements. You must consider the following criteria before choosing a bank in UAE:

1. Opt the Right Bank Account – Business bank account is very essential for fulfilling your transactions. So choose the right bank based on your nature of transactions and facilities such as a checkbook, Debit/credit card, trade finance, and other instruments. Always seek professional recommendations before heading to the bank, which helps you to complete the documentation at the same time.
2. Know the fees structure – Before opting for any bank, be well informed about the average balance requirements, penalties for non-maintenance of balance, transaction cost, annual service charge, etc.
3. Understand the Guidelines & Bank Policies – Banking policies are different from bank to bank. Create a checklist with all your business needs, and make sure the bank you select can meet them now and grow with you as your business evolves.
4. Map out the nearest branches and ATM’s – Opt for a bank that is nearby to your business location, in case of emergency bank transactions or deposits, choosing a bank with the nearest branches or ATM’s are the advisable option.

Phase 3 – Submission and Signing

In this last phase, you have to be very accurate and careful while delivering your details and documents. Consider the following criteria before submission and signing any documents in a bank:

1. Deliver Accurate details and documents (KYC) – Ensure that your legal and corporate documents are in line. The exact documents required will differ slightly from bank to bank. Some banks may also require additional supporting documents: this may include contracts or invoices, reference letters from business partners, company business plans, and information regarding your intended business activities.
2. Be aware of the time frame – Know the time frame of the process. The time frame might differ from bank to bank.
3. Understand the facilities – And understand the facilities which bank provides like a checkbook, credit/debit card, online banking facilities, Letter of Credit (LC), Stand by Letter of Credit (SBLC), etc.
4. Always maintain the average balance in the account – Remember to maintain an average balance in the account in your business bank account. If you fail to do so, it might lead to a shutdown of your business bank account.

Lastly, Working with an expert is the best way to ensure this process runs smoothly. Our Business Consultants can assist with the entire process. You have already got plenty of things to worry about when establishing a new business, make sure that setting up your business bank account isn’t one of them.

Setting up your own business has never been easier. Prime Global Business Services takes care of it all so you can focus on what matters – building your business. For more information about company formation in the UAE mainland or free zones, please call us on +971 4 3522415, send an email to info@primedubai.com, or click here.