Guide to Corporate Banking.
Opening corporate bank accounts in the UAE or the United Arab Emirates, and around the world has become increasingly difficult due to increasingly difficult requirements. There have been a series of scandals in offshore banking that have led regulators to crack down on banking compliance and create stricter guidelines. This means opening and maintaining a foreign business account has never been more challenging. In this article, we’ll go over why this has become so tough, and give you a guide on how to do corporate banking in Dubai right, avoiding costly fees, time wasted, and company failure.
What’s Changed About Corporate Bank Account In Dubai
In the past, you could open a corporate bank account while using a co working space or a flexible desk space. They used to be more relaxed about time spent and numbers of visits to UAE regarding your corporation. However, now because of the increased regulations, you are required to rent an un-shared office space and maintain a permanent residence. Banks are now considering the applicant’s time spent in the UAE, and asking for documentation to prove that the corporation is truly being run out of the UAE. They want to be sure a business is in fact run out of the UAE and isn’t just opening the corporation for tax avoidance.
What Happens When Your Company Doesn’t Meet Regulations
Working with the wrong business consultant can hurt companies at the very beginning of their setup. These companies don’t even get the chance to start, as when the setup is incorrect, or they are founded in a Free Zone, it makes banks unlikely to work with them. Banks require an understanding of the company’s activities and verification to process their banking application and decide to go ahead working with a new company. Many newly founded companies in the UAE fail because the wrong licenses were chosen in the beginning stages of setup and/or they have multiple shareholders.
One of the only options now to ensure that your company can not only be founded but can avoid regulation crackdowns is opening a permanent office called a Business Ejari. While some UAE business consultants can help, one must be sure that they’re working with the right person, as some just want to quickly find your company, and not walk their clients through the ins and outs of regulations requirements and the UAE standards for corporate banking.
Before a company applies to a respective bank, they should utilize a business consultant who can check with the bank to find if their company has the desired activity and correct setup. This avoids being denied from banking activities and therefore avoids a company failing before it’s had the chance to begin. Alexander Erber is a highly experienced global optimizer, strategist, and finance consultant that companies trust, as he’s proven successful in helping newly founded corporations find banking partners in Dubai.
How Corporations Can Successfully Bank In Dubai
European and international corporations need to partner with a bank that will accept Cross Border Payments, as opposed to only allowing payment with the AED or the United Arab Emirates dirham. Many banks don’t want corporations to use any other form of currency until three to six months into their partnership. This is because few banks in Dubai are suited for international banking, and many are singularly focused on Islamic banking. Below are two ways a company can get a corporate bank account in Dubai.
Option 1: Deposit The Banks Minimum Balance
Companies can deposit a minimum balance of 21.000 AED – 250.000 AED. Although all banks vary slightly, Companies should be careful not to allow their balance to drop below 21,000 AED or they’ll be liable for a costly fee.
Option 2: Purchase Bank Products
When a corporation has no connection to or with a bank, purchasing bank products allows for them to build trust through entering into a business relationship. Once you have a business relationship with the bank it’s easier to get a Corporate Bank Account, which is the more popular and helpful option for newly founded companies trying to do business out of the UAE.
Corporate Banking Explained
Wealthy customers, with higher net worth and who can make larger deposits can invest in the products of the bank. This is the easiest and most surefire way to get a bank account, but it costs companies an investment of AED 150,000 or higher. However, just because one can make the minimum deposit, they still need to have a working home address for the UAE, a coherent license, a business within a sustainable field, and a permanent office address- meaning not co working space and not a flexible desk. It helps greatly if you have a business partner who also lives in the UAE, and runs their side of the corporation out of the UAE.
For individuals with a lower net worth, they’ll need to meet the same requirements, but can deposit a lower amount, either AED 50,000 – AED 150,000 always at a minimum of there minimum balance. Wealthy customers have an easier time, but customers with a smaller budget can still find banking solutions, they just may need more collateral at their desired bank.
Why Location Matters
When opening your company in Dubai, one must choose Mainland Company on their company application. Most banks are now refusing to work with any corporation from a free zone, and when they make an exception, they require an Ejari and business address. It’s far easier for entrepreneurs to get an account when they opt for a Mainland Company, as opposed to a free zone, although some of it is dependent on the activity of the company.
How Global Success Consulting Can Help
Without the right bank, it’s nearly impossible to keep a corporation afloat in the UAE, and Working with Global Success Consulting has helped many entrepreneurs meet the requirements of the banks as they have in-depth knowledge of each bank’s specifics. GSC has helped many companies find the internal bank that’s most suitable for their field of work so that they can find long-term success through a solid relationship with the right bank.
GSC helps its clients with the extensive setup of banking in the UAE, and has proven to be more successful than 98% of its competitors. Although working with GSC comes at a price for newly founded companies, it’s worth the investment to ensure that your corporation doesn’t fail before it begins. Banking setup is not the place to save when immigrating or starting a company in Dubai, it’s the singular most important insurance of a company’s success. Proper company setup means having a proper bank account, and with GSC you can be advised on the pitfalls that so many corporations fall into.
Startups require capital, and without the right banking setup, a company cannot succeed in Dubai, so don’t take this step on your own. Work with a professional at Global Success Consulting who deals with the banks and knows them on a personal level. They understand their requirements and know how to meet each one’s unique conditions so that your company can find permanent success in the UAE.