Offshore Bank Accounts- Legalities & Technicalities You should Know!

By Sakshi Srivastava - 08 Nov 2021 Last Updated: 01 Dec 2021
Offshore Bank Accounts- Legalities & Technicalities You should Know!

An offshore bank account offers tax advantages, international trade, discretion, and access to international markets, as well as geographical diversification by not accumulating your money solely in your native country. Dubai is one of the most important financial centres in the world, with a number of world-class institutions. In addition to local banks, the United Arab Emirates is home to practically all international banks; in addition to CITI Bank, HSBC, Standard Chartered, and Barclays Bank, Deutsche Bank and the Swiss UBS are establishing themselves in Dubai.

Thus in this blog we will discuss whether it is feasible for you to open an Offshore Bank Account in UAE and at the same time whether it is legal or not and how you should rescind yourselves from any illegal activities and avoid being a part of any fraudulent act.

So without any further ado, let’s learn!

Why should I open a Dubai-based offshore bank account?

Dubai is a global financial centre that is becoming increasingly important to the global economy. The various banks in Dubai are known for their steadiness. Dubai offers tax freedom and access to worldwide markets as a zero-tax country. You'll have the best international ties to the capital market in Dubai.

What does it mean if someone promises to open a UAE Offshore Bank Account for you and are you being misled?

NO PHYSICAL MEETING

In practice, this may imply that you will not need to physically visit a bank location, but you will need to meet with a banker. You must meet with a banker regardless of whether you are opening a bank account for an offshore or onshore firm. This can be done anywhere, depending on the banker's willingness to go. The gathering for the corporate sector is likely to take place in the United Arab Emirates.

ONSHORE COMPANY

Only if you are the owner of an onshore company may you delegate the process of meeting with a banker. In this instance, you hire someone with a UAE visa who can meet with the banker instead of you.

PERSONAL USE

It's about creating a private account for personal use only, not for business. It will come to you anywhere in the globe if you have a couple of million dollars and a diligent banker in this situation. As we can see, a physical interaction between a bank representative and a firm representative should take place in any instance. The question of what to call this meeting is already a rhetorical one.

In United Arab Emirates, how do I open an Offshore Bank Account?

A corporation, i.e. corporate and private people, can open an offshore bank account in the UAE. An account is formed in the first situation to secure the company's activities, and in the second case to handle personal assets.

  • You must first register your offshore company before opening a corporate bank account.
  • If you want to engage in international commercial activities, the UAE's existing offshore jurisdictions, such as RAK ICC, will be beneficial to you.
  • Keep in mind that offshore activities will be restricted in the UAE. You won't be able to provide financial services in the UAE or beyond its borders, for example.
  • You also won't be able to get a visa if you live in the United Arab Emirates, thus you won't be able to exploit your position as a tax resident of the country, for example.

Who will open a Company in the UAE for an Offshore Account?

You'll need to contact a registration agent if you want to set up an offshore company in the UAE. On the website of an offshore jurisdiction, you can choose an Agent. The list of accredited agents is available to the public. Depending on how they comply with the offshore jurisdiction's regulations, the jurisdiction adds or removes agents from the list on a regular basis. The procedure of creating and registering an offshore business is straightforward; it takes 2 to 4 working days, and the total cost to the founders of an offshore company in the UAE ranges from USD 1500 to USD 3000.

Accounts for Offshore Companies in United Arab Emirates

The most exciting portion begins at this point. Banks in the UAE refuse to open corporate accounts for offshore corporations in about 70% of situations, as we have seen in practise. That is, a number of investors have offshore firms incorporated in the UAE, but they do not open corporate accounts with local or international banks.

Although the restrictions of obtaining bank accounts in the UAE have been mentioned previously, opening a bank account in the UAE becomes the exception rather than the rule for offshore enterprises.

Banks in Dubai and the other six Arab Emirates are now more willing to discuss sanctions lists of nations whose citizens they rarely create accounts for, both corporate and private. If you are from Iran, Ukraine, or Syria, for example, be aware that you will face difficulties even at the initial stage of document submission. Arab bankers are not swayed by the fact that these citizens have bank accounts in the United States of America.

Banks maintain a list of high-risk countries in addition to sanctioned countries. Citizens of Cyprus, Malta, China, Russia, and other nations are among those on this list. The documents of these countries' founders will be scrutinized with great care. If the bank refuses to open an offshore account, you will almost certainly never find out why. “This is owing to the fact that banks, by their own internal standards, cannot counsel clients on how to effectively give information,” as stated in a previous post.

Necessary Documents for opening an Offshore Bank Account in United Arab Emirates

Opening a bank account for an offshore corporation requires a huge amount of documentation. The following is a list of the most important documents to prepare when applying for an offshore account in the United Arab Emirates

  • For the previous six months, an extract from the parent company's bank account and/or the founder's personal account
  • Accounts that will be used as evidence for some of the statement's transactions (3-5 accounts should enough)
  • a letter of recommendation from the founder's country's bank
  • Documented evidence of conducting a similar business (not offshore) in the UAE or another nation for at least three years with audited financial accounts
  • The prospective company's business plan, including estimates for turnover, suppliers, and customers
  • Legal documentation for a corporation in the UAE, as well as the owners' identification cards
  • In the passport, there is an admission stamp from the UAE.

How do I open an Offshore Bank Account in the UAE from around the world?

Customers from across the world send us such requests on a regular basis. To summarize, anyone wishing to open a corporate account with a UAE bank must do it in person. It doesn't matter if you're opening a bank account for a company registered on the mainland, in one of the UAE's Free Economic Zones, or offshore, the founder or director of the company must meet with a banker in person.

Conclusion

The procedure for opening an offshore bank account in Dubai differs depending on the bank. This is due to the fact that each bank has its own set of policies and standards that you must adhere to. The procedure of opening an offshore account for an entrepreneur wishing to start a new firm in Dubai can be complicated and time-consuming. This is why Dhanguard offers its assistance and services to help you collect any necessary information in advance, avoiding delays and ambiguities. You are invited to use the Dhanguard, where their experienced personnel will assist you through all of the essential processes to follow for your business's establishment, saving you both time and money.

Thus we hope this blog provides you with incite full information. For more information on other related aspects, feel free to check out our website as well.

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

By Sakshi Srivastava

08-Nov, 2021

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