Opening a bank account is among the most difficult obstacles that entrepreneurs must overcome when launching a business in Dubai and the UAE. You must fulfill a number of severe standards before you may open a corporate bank account in the UAE. The process of starting a bank account is time consuming for business owners who want to launch a new venture in the UAE due to severe international rules and demanding criteria.
Thus in this blog, Dhanguard will extensively discuss the major obstacles you might face while starting a Bank Account in the UAE, so that you can prepare beforehand and start your bank account without any difficulties. So without any further ado, let’s learn!
Major Obstacles which can hinder your Bank Account Opening in the UAE
Below mentioned are the major obstacles which an applicant can face while initiating the process of bank account opening in the UAE. Our experts have elucidated them for you so that you may start your bank account easily in the UAE.
They are the following-
Absence of an Actual Office
UAE banks require that a company have a physical address. To confirm that your company has a physical presence at the address listed in the documentation, some banks will send an inspection officer there. Banks must verify whether or not this person is truly conducting business. Banks will reject a client if they discover that no work has been completed. A third party is used by the bank to verify this, a process known as contact point verification (CPV). For banks, this is more reliable. The banks get the Field Visit Report (FVR) from the CPV for review.
The Shareholder’s Profiles
You must persuade the bank of your integrity before they would approve your request for a bank account. The founder of the business must show that he or she has in-depth understanding of the sector in which the business will operate. The procedure can be sped up by prior business experience, which establishes a person's or business's reputation and debt history. When a person applies for a business account, the banks always check to see if that individual is qualified to run the enterprise they have established. The person's profile should always reflect the organization's structure. Banks examine a client's income to determine whether they can legally operate a business in the United Arab Emirates.
Poor Business Plan or Insufficient Information
It's crucial to have a strong business strategy when beginning a business in Dubai or the UAE. The financial stability of your company is required information by banks in the United Arab Emirates. Background of the founders, a financial plan for a business opening a bank account, a list of potential suppliers and customers, and other information are all things that banks are pleased to review. Opening a business bank account in the UAE may be further delayed if a solid business plan and other financial information are not provided to show the company's financial integrity. Make a business plan in the UAE by contacting us.
Resident of the United Arab Emirates
The majority of banks in the UAE demand a residency visa. Additionally, you could be asked to furnish a local address by some banks in the UAE. It's also a good idea to find out if the bank requires you to provide documentation proving the stockholders in your firm have current residency permits. Some banks require proof of this from at least one shareholder.
The Importance of Nationality
It will be challenging to open an account in the UAE if you are a citizen of a high risk nation. Governments from all around the world have the authority to apply sanctions against a single person. Banks forbid money transfers from and to Specifically Designated Nationals (SDNs). SDNs are individuals who can exist anywhere on the earth. SDNs may be connected to human rights abuses, nuclear proliferation, terrorism, drug trafficking, international criminal organisations, and sanctioned governments.
Russians who are not residents of the UAE are not permitted to send money to Russia. Syrians who do not reside in the country cannot open USD accounts with the banks. Non-resident Chinese are now prohibited from conducting import and export, general trade, and textile business in the UAE.
Trading with High Risk Countries
It may be challenging to register a bank account for your business in the UAE if you conduct business with sanctioned or high risk nations. When conducting business with high risk nations, financial institutions (FIs) in the UAE are expected to abide by rules that address the dangers of money laundering and terrorism funding.
As determined by the National Committee for Combating Money Laundering, Terrorism Financing, and Illegal Organizations, FIs must also enforce all pertinent policies and procedures pertaining to high risk nations, including those pertaining to the implementation of Financial Action Task Force and UN Security Council resolutions (FATF).
This calls for a higher level of examination, including careful oversight of the Business Relationship, increased internal reporting and management approval, more frequent review/updating of customer due diligence information, and regular transaction monitoring.
Financial institutions should think about putting in place the proper internal policies, processes, and controls when dealing with high-risk nations.
Cuba, Myanmar, Iran, North Korea, the Ukraine (Crimea), Sudan, and Syria are among the nations on the list of sanctioned nations.
Nigeria, Somalia, Ethiopia, Serbia, Yemen, Kenya, Uganda, Saint Kitts and Nevis, Anguilla, Malta, Cyprus, Zimbabwe, China, and Libya are prominent high-risk nations when opening a company bank account in the UAE.
Strict regulatory measures implemented by the UAE government guarantee that the economy is growing in the right way. Tough reforms are also required to address financial crimes including money laundering and terrorist funding.
But the only reason the procedure is so tough is because of the stringent rules that must be followed by any nation that wants to improve the efficiency and corruption-free nature of its system.
It takes a while for business owners who want to launch a company in the United Arab Emirates to open a bank account for their company. We will support you in this circumstance. One of the top banking advisors in the UAE, Dhanguard offers assistance in opening corporate bank accounts. Thus, we hope this blog provided you with insightful information. For more information on other related aspects, feel free to check out our website or visit our head office as well.