One of the most essential components for the running of any business is a corporate bank account. No matter where you go, if you want to run a business you will need a corporate bank account and the United Arab Emirates is no different in that respect.
Even before you establish your business and even before you start running it, you need to have a corporate bank account as one of the conditions to establish said business. In that account, you need a sufficient amount to pay the salaries and meet the expenses of running the day-to-day operations.
So now that you know the importance of a business bank account in the UAE, you may want to know how to open one. In this detailed guide, we will explain everything from the benefits of a corporate account to the challenges in banking and finally how to open a business account in UAE.
What is a Corporate Bank Account in UAE?
A corporate bank account in the UAE is a special account that is assigned to businesses. It allows companies and businesses to manage their day-to-day finances, like getting money from clients, paying their employees and suppliers, and adding or withdrawing funds as needed
Some banks in the UAE require a minimum balance in order to open an account, while others don’t. Besides that, any business with a valid trade license can open a business account in UAE.
Benefits of a Business Bank Account in UAE
Having a Business Bank Account in UAE is not only essential for running your business but it can also be very beneficial as you will see from the many benefits listed below. Some of the most prominent ones are as follows.
Financial Empowerment
With a corporate bank account, you can easily track your funds, compare your outgoing funds to your incoming funds, look for any irregularities, and in essence, be able to better manage your business finances.
Security and Convenience
It goes without saying that having a corporate bank account secures your liquid assets, but it also provides you with the convenience of not having to handle large amounts of cash. Nowadays most business transactions are done online anyway with bank apps etc. you can easily send and receive funds.
Increased Credibility
A corporate bank account lends you credibility in the eyes of both your clients and your suppliers. They understand that you are a serious and professional company and that business with you can be conducted in a safe and professional manner
Enhanced Capabilities
We live in a digital age and banks are not just there to store your money. With your corporate account, you get access to bank loans and financing, foreign exchange services, trade options, and other such services that are now essential for not only the running of a business but also its growth.
Segregation Between Personal and Business Funds
It is neither professional nor smart to mix your personal and business finances and that is why all smart businesses have a separate bank account to manage finances on both sides and make sure there is a level of transparency and everything is above board and ethical.
What to Keep in Mind When Opening a Corporate Bank Account in UAE?
There are certain key things you need to keep in mind before you open a corporate bank account. These are in part requirements and part good business practices.
Meeting the bank’s requirements
To open a corporate account, you need to meet certain requirements set by the bank, these include depositing the required amount set by the bank, agreeing to pay the necessary fees and account maintenance costs, and complying with overall bank policies.
Defining a legal structure for your business
To open a bank account, you need to define the legal structure of your business, like whether it is a limited liability corporation, a sole proprietor, or a single-layer company i.e. the owners are individuals, etc., also where it is located, on the mainland, or in one of the free zones, etc.
Collecting the necessary documents
You need to have all the necessary documents, like to show the legal structure you need to have a business plan, you also need to have a business license or a certificate of incorporation as well as passports and visas, and memorandum of association, etc. if required.
Having a representative when opening the account
Next, you or your partner or a designated signatory will be required to be present at the bank to officially open the account and sign the necessary documents, as well as clear any queries the bank may have and ask any questions that you as a client of the bank may want to.
Time Management
Lastly meeting all the requirements and actually opening the account can take a few business days and as such you should manage your timeline accordingly and be prepared for any delays. However, if you have all the right documents the banks in UAE are very efficient and work very fast.
How to Open a Business Account in UAE?
If you meet the requirements set forth by the bank then the process of opening the bank account is very simple and easy and is as follows.
- You start by looking at all the prospective banks and finalizing on one that best suits your needs.
- Getting your business license by registering your company as banks require the license to open the account.
- Next, you gather all the necessary documentation like financial details, lease agreements, MOA, etc.
- When you have done all that you can open the application process, fill out the necessary forms, and submit the documents.
- Lastly, you may be required to sign a few documents and may need to show up at the bank for them.
Possible Challenges Faced in UAE Corporate Banking?
Banks in UAE are strictly regulated and face severe financial scrutiny to ensure everything is above board and all the finances are being handled properly. To maintain such high standards, they have a lot of rules and regulations and to open an account you may have to deal with a lot of bureaucratic red tape.
This may include a number of different challenges that some businesses may find difficult to deal with and some of them are as follows.
- Long wait time to open an account.
- Coming with the minimum required funds.
- Providing a structured business plan that the bank finds satisfactory.
- Complying with strict rules and regulations.
