Bank Account Opening in UAE

The Nationality of the key persons of the company has a vital role while applying for a bank account. Citizens from high risk countries, countries falling in the sanction list, politically instable nations generally face difficulties in opening a bank account as well as carrying out bank transfers.

Similarly if your business primarily has transactions with high risk countries or sanction list countries, it may be challenging to register a bank account. Financial institutions (FIs) are expected to abide by the relevant rules and regulations including the anti-money laundering laws to address the risk of money laundering and terrorism financing. 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).
Cuba, Myanmar, Iran, North Korea, the Ukraine (Crimea), Sudan, and Syria are among 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.

The absence of an official company website is also a key concern for banks. A website that gives the basic information about the business, the services/products it offers, the key stakeholders, contact details helps the bank to do a reality check of the business.

In case any existing bank account was closed, the new bank to which the application is made investigates the reasons for the closure of the previous account. The banks want to establish whether the previous account closure was a forced closure from the banks end due to the non-compliance by the holder in relations to carrying out transactions as well as adhering to various bank policies.

Non-compliant transactions: Following transactions are considered to be non-compliant based on which banks can take actions on the account holder including rejection of transactions and forced account closure:

• The transactions reflected in the account does not equate to the nature of the business.
• Adhoc transfers of Huge amount of money from and to the account.
• Payments or receipts without supporting documents.

The majority of the banks in UAE demand a residency visa. Some banks also require the proof of local address in the UAE. Having a residency permit for the owners enhances the credibility of the business and its intention to do the actual business in UAE.

When a person applies for a business account, the banks always check if the person has an in-depth understanding of the business he intends to operate. Prior business experience, qualification, previous debt history are all factors considered with this regards.

In case of companies with free zone licenses, banks also consider the reputation of the free zone authority under which the company is registered. Due to the low barrier in entering the market, banks may regard owners of free zone business with more suspicion. Free zones which are highly regulated and whose licenses are expensive always have an easy walk through over the ones that operate on a low profile. The licensing authority that the entity has chosen also shows how genuinely it intends to conduct its business.