If you have never lived in the UAE previously, you may not be aware of the country's use of cheques. Even if you've lived in the UAE and used bank cheques before, you might not be up to date on everything. In any case, we recommend that you read this chapter and understand more about cheques.
So without any further ado, let’s learn!
First and foremost, a bank cheque is a kind of payment similar to a debit card or cash, with the exception that it is not an instant payment. If you receive payment from me, you will have the funds immediately available. It's not the same with a check. Before I may get monies in the amount mentioned on the check, I must first deposit it in my bank account and wait a day or two for the cheque to clear and the funds to be placed into my account. Cheque payments are widely accepted in the UAE, and businesses regularly use them to pay for services or commodities, office rent, or the purchase of office equipment.
On the one hand, you do not need to have this money right now to issue a post-dated cheque in a specified amount. However, before the person or entity to whom you donated it gives it to his bank, you must confirm that you have it.
If you do not have enough funds before that time, the bank will return your check with a letter stating, "insufficient funds," and any checks that do not clear will be considered a criminal offence. This means that if the person you provided the check to presented the check to his bank and there were insufficient funds, the payee can approach the UAE Police. As a result, you must exercise extreme caution and take checks very seriously.
We listed the grounds for cheque return as we listed the facts you must include on the check:
You'll also hear the term "cash check" frequently. This is the same conventional cheque we just discussed, but instead of the payee's name, it says "CASH." For example, suppose your corporate debit card has a limit of AED 10,000 and you urgently need to purchase AED 15,600 worth of office equipment. You won't be able to withdraw this money from an ATM, and submitting instructions to the bank to pay cash will take time. Instead, type "cash" in the payee name field, fill out the rest of the check as usual, and deliver it to your bank. This sum will be deducted from your account instantly, and you will be paid AED 15,600 in cash.
At the same time, we've noted that several banks have begun to create policies stating that they will no longer accept such checks after a particular date. Many banks, however, continue to provide the service. We strongly advise you to only utilize the service when absolutely essential.
Thus we hope this blog provided you with incite full information on how to handle cheques and all it related procedures in United Arab Emirates. For more information on other related aspects, feel free to check out our Website as well.
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Yes, a foreign entity can open business account in the UAE. The registration of any organisation in the UAE is generally an easier and cost-effective way.
The requirement for opening any bank account in the UAE vary from one bank to another. Although, the existence of a major director or shareholder is generally required.
A limited company should have a dedicated bank account because they have a separate legal entity.
The benefits of having business account includes tracking of the expenses, easy calculation of the tax liabilities as well as management of cash flow.
Yes you can open a business account in various major currencies of the world other than the UAE dirhams.
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