Absence of Physical/ Flexi Office can act as a barrier in Business Account opening in UAE. Read Why!

28Apr, 21

Absence of Physical/ Flexi Office can act as a barrier in Business Account opening in UAE. Read Why!

In the ever-evolving business landscape in the UAE, the concept of a flexi office in Dubai or physical office space has become integral, especially concerning opening business accounts. A flexi office, often synonymous with flexibility and convenience, is a pivotal contact point for verification agencies and banks. However, the absence of a physical or flexi office can pose substantial challenges when seeking to establish a business and open an account in the UAE. Many foreign entrepreneurs operating their businesses globally through UAE offshore companies or having small facilities commonly known as flexi desks or Virtual offices in the free zone are finding it challenging to open and operate a bank account in the UAE as a result of recent Anti Money Laundering and Combating Financial Terrorism regulations released by the UAE Central Bank. All UAE banks are asking for more information about the Ultimate Beneficial Owner under the Know Your Clients requirements, including a personal profile and a website with company information. Thus, in this blog, Dhanguard will extensively discuss why the lack of physical space could lead to failure in opening a Business or any other Bank Account in the UAE. So, without any further ado, let's begin! Dhanguard helps with various services with Mainland, Offshore, and Freezone Business Account openings.

Understanding Flexi Office in Dubai

Flexi office spaces in Dubai represent a modern approach to conducting business. These spaces offer registered business address communication services, and often facilitate contact point verification banks—an essential requirement for many banks and regulatory agencies in the UAE. The phrase "Flexi Desk" describes how simple it is for companies to register even if they don't have actual offices. The Flexi Workstation serves as a shared desk and seating area for groups of subscribers. The definition of a flexi desk is not well known to many people who desire to launch a business in the United Arab Emirates. In the United Arab Emirates, a joint office is known as a "flexi desk" and is required for any organization upon registration. In addition to hot desks and flexible offices, flexi desks are also known as smart, virtual, shared, shared, and business center desks. As a bare minimum, the UAE government mandates that any company with a registered office have one of these desks. Flexi desks in Dubai leases are not equivalent to physical offices, and banks in the United Arab Emirates do not accept them as proof of having a physical office.

Importance of Flexi Desk Offices in Business Operations

There are several advantages to having Flexi Desk Offices in Business Operations, and here are a few of them:

Legal Requirement 

A registered office address is mandatory for setting up a business entity in the UAE. A flexi desk office fulfils this requirement, allowing businesses to operate within the region legally.

Contact Point Verification

Banks and regulatory agencies conduct stringent verification processes. A flexi office serves as a contact point, enabling these entities to verify the legitimacy of a business, fostering trust and credibility.

Why is it necessary for the Banks to see your Physical/ Flexi Office Space?

Banks must follow the UAE's initiative in combating financial crimes like money laundering and terrorism funding. The pressure on banks to adhere to legislative requirements like anti-money laundering (AML) and counter-terrorism financing makes obtaining a bank account in the UAE more challenging. Because of this, banks in the UAE are under a lot of pressure from regulatory and inspection organizations to be stringent when dealing with clients who wish to register business accounts. Therefore, the banks want to check out the applicant's physical location or Flexi office to be sure they truly want to open a corporate bank account for conducting business in the United Arab Emirates.

Banks in the United Arab Emirates demand that a business have a physical office-

  • Some banks will send an inspection officer to the address provided in the documentation to verify your company's physical presence. 

  • The banks must confirm whether or not this person is conducting business. 

  • The Bank will only accept your application to open a bank account if it finds work has been done.

  • Additionally, the Bank confirms this using a third party's assistance, a procedure called Contact Point Verification (CPV). This is more reliable for banks. 

  • The third party submits the Field Visit Report (FVR) to the banks for review so they can determine whether the applicants have an office.

Impact of Absence of Flexi Office on Business Account Opening

Below is the mention of how the absence of a flexible office impacts the opening of business accounts:

Regulatory Compliance Challenges

With a physical address, businesses may be able to meet the mandatory requirements for legal compliance, hindering the process of opening a business account.

Lack of Credibility

Banks prioritize credibility and legitimacy. With a physical presence or registered address, businesses may appear more credible, resulting in reluctance from financial institutions to open accounts.

Contact Point Verification Issues

A flexi office must be clarified for verification. Banks and agencies rely on these addresses to confirm businesses' authenticity, making the absence a significant barrier.

Concept of Contact Point Verification

Verifying data or information provided by potential consumers is referred to as "contact point verification" (CPV), and it is an essential and necessary operation in a range of industries, including banking. 

  • The third party confirms contact information for several loans or account opening procedures approved by the Bank. 

  • Addresses and personal data of the guarantors or borrowers are acquired, including bank statements, evidence of residency, evidence of business, and proof of a physical / flexi office. 

  • Field investigations and contact point verifications are carried out swiftly and tenaciously while necessary modifications to the verification procedure are made to satisfy the Bank's standards.

What are the different types of Contact Point Verification?

There are two types of Contact Point verification, which are explained below-

Business Verification

The third party visits the applicant's place of business or Flexi office to confirm the information listed below:

  • That the applicant is the one conducting business.

  • A thorough enquiry is conducted regarding the duration of his employment with the organization and in the community.

  • The total no. of employees currently engaged in the company.

  • The total quantity of stock

  • Verification of office contact details

  • The total square foot area of the Flexi office

A Field Verification Report (FVR), which is a report made after looking into all of the information above, is then produced and delivered to the banks.

Residency Verification

Thanks to residency verification and history, the Banks can check someone's current and past addresses. Tenancy agreements, or Ejari, must be signed in the name of the home's owner to be accepted by banks. Additionally, banks get letters requesting shared lodging.

  • Where do you stay? This is the question that banks always ask when they inquire about an applicant's stay in the UAE. 

  • A letter from the applicant's owner confirming that the applicant is sharing an apartment with the person in question is required for the application process. 

  • The owner will go to the Bank for further verification and provide a copy of the Ejari or tenancy, a copy of their passport, or an Emirates ID.

Overcoming the Challenges

The following outlines ways to overcome the challenges encountered:

Utilizing Flexi Desk Offices

Opting for a flexi desk office in Dubai resolves the address-related hurdles. It provides a professional address for regulatory compliance and verification purposes.

Collaborating with Verification Agencies

Working closely with verification agencies and leveraging their expertise can streamline the process, even without a physical office.

Building Credibility through Alternative Means

Highlighting a strong online presence, showcasing partnerships, and providing comprehensive documentation can supplement the absence of a physical office in establishing credibility.


In the UAE's business landscape, the absence of a flexi office or physical office space poses significant challenges, particularly in business account opening. A flexi office in Dubai meets legal requirements and is a contact point for verification agencies and banks. Businesses aiming to navigate this challenge successfully should consider adopting flexible office solutions and leveraging alternative methods to establish credibility and meet regulatory compliance standards. A flexi office or physical address is a cornerstone in successfully establishing businesses and facilitating smooth account opening processes in the UAE. Thus, we hope this blog provides you with insightful information; for more information on other related aspects, check out our website.