Why Lack of Physical / Flexi Office causes a Hurdle in Bank Account Opening?

By Sakshi Srivastava - 28 Apr 2021 Last Updated: 20 May 2022
Why Lack of Physical / Flexi Office causes a Hurdle in Bank Account Opening?

Due to recent Anti-Money Laundering and Combating Financial Terrorism regulations released by the UAE Central Bank, many foreign entrepreneurs operating their businesses globally through UAE offshore companies or having small facilities generally known as flexi desks or Virtual offices in the free zone are finding it difficult to open and operate a bank account in UAE. Under the Know Your Clients regulations, all banks in the UAE are requesting more and more documentation about the Ultimate Beneficial Owner, including a personal profile and a website with business details. In this blog, Dhanguard will clear your doubts regarding any hurdle while opening Bank account in UAE.

In the United Arab Emirates, banks require that a company should have a physical office. Some banks will dispatch an inspection officer to the address listed in the documents to ensure that your business is physically present. Banks must verify whether or not this individual is in fact conducting business. If the bank discovers that no work has been completed, the application for your Bank Account opening will be rejected.

The bank also verifies this by enlisting the help of a third party, a process known as Contact Point Verification (CPV). For banks, this is more dependable. For inspection, the third party sends the Field Visit Report (FVR) to the banks for their observation that the applicants have a physical office present.

Why banks need to see the physical office?

The UAE's contribution to fighting financial crimes such as money laundering and terrorist funding must be followed by banks. The pressure on banks to comply with regulatory measures like anti-money laundering (AML) and counter-terrorism financing adds to the difficulty of opening bank accounts in the UAE. This is why regulatory and inspection bodies in the UAE put a lot of pressure on banks, forcing them to be strict with customers who want to open a company account. So, the banks want to look into the physical office of the applicant, so it can be sure that the applicants genuinely want to open corporate bank account for performing business activity in UAE.

What is Contact Point Verification (CPV)?

Contact Point Verification (CPV) is a term used to describe the process of confirming the Verification of records / information given by prospective customers is a crucial and necessary process in a variety of industry such as banking. The third party verifies contact points for a variety of loans or account opening process approved by the bank. The borrowers or guarantors' addresses and their personal information are gathered such as proof of residency, proof of business, proof of physical office and bank statements. Contact Point Verifications or Field Investigations are conducted with tenacity and pace with relevant changes to the verification process to meet the Bank's requirements.

Types of Contact Point Verification

The types of Contact Point Verification are-

Types of Contact Point Verification

Verification of Residency

Verification of residency and previous history enable us to check an individual's current and previous addresses. Banks require tenancy agreement also known as Ejari under the name of the owner of the residence.

Banks also accepts sharing accommodation letter.Whenever banks ask the applicant regarding their stay in UAE, that is where do you stay. The applicant needs to submit a Sharing Accommodation Letter from their owner which merely states that this particular individual is staying with them in the same apartment, sharing the flat etc. The owner will bring a copy of Ejari or tenancy along with the passport copy or emirates ID to the bank for further verification.

Verification of the business

The third party goes to the applicant's business address to verify the following details-

  1. The applicant is actually doing the business.
  2. We inquire about the length of time he has been in company, as well as the surrounding area.
  3. Total square footage
  4. Number of employees in the company
  5. Estimated stock
  6. Office phone, etc.

All of the above information is investigated, and a report known as a Field Verification Report (FVR) is created and sent to the banks.

What is Flexi desk office in UAE?

The term "Flexi Desk" refers to the ease with which businesses can register without having physical offices. The Flexi Desk is a communally shared desk space/seating area for groups of subscribers.

Many people who want to start a company in the United Arab Emirates are unsure what a flexi desk is. Flexi desk is the name given to a joint office in the UAE, which must be assigned to any organisation upon registration.

Hot desk, flexi office, smart desk, virtual office, Shared desk, Shared office and business centre desk are several other names for flexi desks. Any business that is registered in the UAE must have such a desk as a minimum requirement by the UAE government.

Having flexi desk tenancy agreement doesn’t mean that you have a physical office, Bank does not consider Flexi Desk Tenancy Agreement for having a Physical Office in UAE.


When starting a business in Dubai, one of the first moves is to open a corporate bank account. This method, however, does not always go as smoothly as aspiring entrepreneurs would like. When a business owner's application for a corporate bank account is denied, it may catch them off guard.

Many UAE banks serve as correspondents for foreign banks, and they are solely responsible for the conduct of the clients they bring in. As a result, these banks are extremely cautious when it comes to vetting customers, and denials are not uncommon. Companies based in Dubai's free zones and offshore companies, in particular, are likely to face difficulties in opening a corporate account.

Open business bank account online in Dubai, UAE. Compare and apply for business bank account from leading banks with Dhanguard.

By Sakshi Srivastava

28-Apr, 2021

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