This blog covers all you need to know about business accounts in UAE.
With so many options, choosing a business account in UAE seems challenging.
The UAE could be an alluring polestar for investors to locate their business as it
has one of the most liberal trade regimes and attracts strong capital flows with a
well-established infrastructure, strong banking system and a stable political
system.
The UAE also provides for a window of free trade zones that can allow
100% foreign ownership and a nil taxation regime (subject to certain limitations).
For running a successful business you need a good system for managing your
funds. This is when the importance of a business account peeks in.
Now let's see what is a business account?
A business bank account is an account that helps business owners to track their expenses, manage cash flow, and make it easier to calculate tax liabilities.
Business bank accounts are different to private or personal bank accounts as they are made specifically for businesses.
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Process to Open Business Accounts in UAE
Usually it starts with a face to face meeting with a bank in the UAE before they'll
offer you a business account. Then you'll need to take along paperwork and
provide signatures before your account will operate.
The time period to setup your account may vary depending on the bank, the
account type, and your business. It may take relatively a short period of 2 to 4
months in case of Free Zones and locally registered LLCs, including your face to
face meeting.
When choosing the best business bank account for your company, it is
recommended that you look for one that offers low charges and good interest rates.
It largely depends on what the normal business operations are.
For example, if you expect to primarily make payments electronically, the best business bank account would offer low-cost or free electronic transactions. On the other hand, if your business involves using primarily cheques, you should look for lower charges for
paper transactions.
Many agencies are there to guide you for opening a business bank account. They can be very helpful in starting an account which is apt for your business.
Documents required to open a business account in UAE
These are the type of documents you need to have for opening a business bank
account in the UAE. Be sure that you have all the required documents as per the
banks protocols (may vary for different banks) in hand before you proceed further
for a business account.
THE LIST OF DOCUMENTS ARE LIKELY TO INCLUDE
| Category | Documents |
|---|---|
| Application form | A completed application form |
| Identity and Address proof | Passports or other government ID for the owner and all shareholders |
| Documents related to business | Company certificate of registration and trade license Share certificates Company Memorandum and articles of association Board resolution meeting minutes confirming the opening of the account has been approved properly |
| Other Documents | Letter of reference through the business partners Information related to the kind of activities to be performed on the account. |
Banking fees for business or corporate accounts in UAE
Fee structure can vary depending on the bank and the type of account you choose.
Most accounts need a minimum balance requirement, if not maintained you may be charged an additional fee. This may end up being expensive if you have not opted
the right business account for your needs.
Benefits of a business account in UAE
It is a good idea to have a business account in UAE. Take a look at these 8 benefits of a business account:
1. Your business records will be organized
You can keep your business accounting program records organized with a business
checking account. All your business transactions are tracked on a separate
statement.
Thereby ensuring an accurate book keeping which helps with a clean
record for the accountant at the year-end while payment of income tax.
2. Accurate taxes and deductions
A business account helps to ensure you file taxes accurately. You look at your
business account statement and record the figures on your tax return. There by you
can deduct business expenses from your tax return.
3. You can accept credit cards
You limit your customer pool and potential sales when you only accept cash
payments. Many consumers pay with credit cards over cash.
Accepting credit cards helps you serve a larger number of customers. You can also set up a credit acceptance system through the bank with your business account.
4. Business loans
Having a corporate account can be helpful to obtain a credit card or can be
beneficial if the owner wishes to take a loan for their business.
5. You look professional and gain bank relationships
Whether you are a startup or an established business, you want to look
professional. Do you pay vendors with cheques that have your personal
information printed on them? Or, do you tell customers to issue payments to your
personal name? A business bank account gives you a more qualified look.
6. Minimum account balance
Many banks in the UAE offers low to zero balance accounts to the organizations
making it easier to manage cash flows.
7. International Remittance
Banks in UAE offers the facility of making International Remittance on business
bank accounts.
8. Multiple Currency
Apart from UAE dirham, these bank accounts can be opened in many other major
currencies across the globe.
These are the reasons why you would need a business / corporate account in UAE
As you continue to grow your company, keep these business bank account benefits in
mind.
Types of Business Structures in UAE
1. Offshore Company
UAE Offshore company registration is a very popular method of doing business in
the Middle East region.
In UAE there are three offshore jurisdictions “ Dubai (Jebel Ali Offshore Company) Ras Al Khaimah and Ajman. They offer similar services but serve different strategic goals of offshore company registration.
They offer similar services but serve different strategic goals of offshore company registration.
The Jebel Ali Offshore Company is an International Business Crown/holds the only
offshore vehicle that is permitted to own / hold real estate in the Emirate of Dubai.
JAFZA Offshore operated under JAFZA Free zone.
The RAK Offshore and the RAK International Company (RAKICC) are
International Business Companies. They provide a flexible and credible option for
foreign investors to register an offshore company in UAE without the need to
establish a physical presence in the UAE.
RAKICC is also allowed to hold the freehold property in Dubai.
UAE Offshore companies offer the following benefits:
ï‚· No Corporate tax
ï‚· 100% foreign ownership
ï‚· 100% Capital and Profit Repatriation
ï‚· UAE Bank Account
ï‚· International Invoicing
ï‚· Limited Liability Company
ï‚· No TIEAs
ï‚· Absolute Privacy and Confidentiality
ï‚· Ability to maintain multi-currency Bank accounts in the UAE
ï‚· Virtual office facilities available in the UAE
2. Sole proprietorship
A sole proprietorship, also known as the sole trader, individual entrepreneurship or proprietorship is a type of enterprise that is owned and run by
one person and in which there is no legal distinction between the owner and
the business entity.
The sole trader receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts.
Every asset of the business is owned by the proprietor and all
debts of the business are the proprietor’s. It is a “sole” proprietorship in contrast
with partnerships (which have at least two owners).
A sole proprietor may use a trade name or business name other than their or its legal name. They may have to legally trademark their business name if it differs from their own legal name, the process varying depending upon country of residence.
3. Dubai/UAE Free zone Companies
It is possible to establish branches of foreign companies in the UAE free zones or
to incorporate a free zone entity.
The types of entities which may be incorporated include single shareholder entities, commonly known as free zone establishments, and free zone companies with commonly two to five shareholders.
In most free zones, both free zone establishments and free zone companies will have limited liability, however, this does vary between free zones and therefore the rules and
regulations as to whether a single shareholder company is given limited liability
should be considered
4. Limited Liability Company in Dubai
A limited liability company (LLC) is the US-specific form of a private limited
company. It is a business structure that can combine the pass-through taxation of
a partnership or sole proprietorship with the limited liability of a corporation.
An LLC is not a corporation under state law; it is a legal form of a company that
provides limited liability to its owners in many jurisdictions.
LLCs are well known for the flexibility that they provide to business owners; depending on the situation, an LLC may elect to use corporate tax rules instead of being treated as a
partnership, and, under certain circumstances, LLCs may be organized as not-for-
profit.
5. Private share holder company
Except for provisions regarding the public subscription of shares and debentures,
the provisions governing public joint stock companies are the same as those
applicable to a private joint stock company.
Can I open a business bank account in UAE with a foreign expat entity?
Of course, you can open a business bank account in UAE with a foreign expat
entity. It is legal but there are quite a few hoops to jump through to fulfill local
legislation, which include;
 Most documents originating outside the UAE must be notarized and
legalized through diplomatic channels prior to being submitted to the UAE
authorities. Once legalized it is usually necessary to obtain a certified Arabic
translation of corporate documents before these can be submitted to the UAE
authorities. This latter requirement does not apply to free zone license
applicants.
 You will be asked to share a lot of information with your bank about
yourself, your business and your future plans, to fulfill their duty to stop
illegal activity or money laundering.
Frequently Asked Questions (FAQ) on business accounts in UAE
1: Can I open a business bank account as a non-resident?
Legally there is no restriction for a non resident to open a business bank account in
UAE but it completely lies on the discretion of the bank to whether or not you can
open an account – and on the facilities available. Generally the types of accounts
offered by most banks may be limited for non-residents.
2: Which bank should I choose?
The four major banks in the UAE include:
ï‚· First Abu Dhabi Bank
ï‚· Emirates NBD
ï‚· Abu Dhabi Commercial Bank
ï‚· Dubai Islamic Bank
You can primarily start with any one as these banks provide options for business
of different sizes with a wide range of business banking products.
3: How long does it usually take to open an business account in UAE?
The time to set up an account may vary depending on the type of account, your bank and your business. It may take relatively a short period of 2 to 4
months in case of Free Zones and locally registered LLCs.
4: What are the general banking fees charged by banks in UAE for
business bank accounts?
Banking charges vary depending on the bank and the type of account. Normally
these accounts will need to have a minimum balance requirement if not maintained
the bank may charge you an additional fee.
5: Can a Foreign entity open a business account in the UAE?
Yes, a foreign entity can open a business account in the UAE. But you will require
complying with the criterion of the local legislation, which can be costly and time
consuming.
6: Are there any minimum holding requirements for banks in the
UAE?
There is a minimum balance requirement for a business accounts which if not
maintained charges a nominal fee to the account. Banks typically require the
account to maintain an average monthly balance between AED 20,000 (approx.
US$ 5500) and AED 150,000.
7: Can I open a ˜no minimum balance account in UAE'?
There are a few banks in Dubai that provide unique benefits regarding interest rate,
minimum balance, monthly fee and money transfer fees. You will not definitely
find a bank account where you can keep your balance zero, but there are some
banks which keep minimum balance almost zero. Those bank accounts are often
called ˜zero balance account in UAE' though they require a minimum cash flow to
stay active.
8: Do a Sole proprietorship company need to open a business account in the UAE?
No, there is no legal requirement for a Sole trader to open a business account as
you are legally authorized to use your personal account for business and non-
business transactions. Still it is advisable to have one as it makes you look more
professional and makes it easier for you to check on your income and expenses of
your business.
9: Do an Offshore Company require a business account in the
UAE?
Yes, whether an offshore or an onshore company, it definitely needs a bank
account to carry on a business in the UAE. As it keeps the record of cash flow in
and out of the company which makes it easier for smooth financial functioning of
the company.
10: Can I know about some business account products available in
UAE?
Different types of business account products are Business Basic Account, Business Advantage Account, Business Preferred Account, Business Call Account and Fixed Deposit;
each of these accounts provide unique benefits making it flexible for your
differential business needs.
