Alliance-dubai.net - What you need to know how to open a personal bank account in Dubai, UAE and why

What you need to know how to open a personal bank account in Dubai, UAE and why

What you need to know how to open a personal bank account in Dubai, UAE and why

In the today’s world, the availability of reliable banking with the complete range of banking services has become the absolute must. The offshore private banking solutions are highly popular, practical and beneficial for the ones who value the fast and global access to banking and need safety and reliability. In this overview, we provide you all the man points on the reasons and advantages of such offshore solution. We also provide you all the data and facts which you need to know to be able to open your zero or minimum balance current or savings non-resident account abroad without mistakes as well as all the available types of accounts to choose from and the best tips on how to make the best choice.

Possible reasons to open an offshore private bank account as such and in the UAE in particular

There are various situations and reasons why you may need to open a personal offshore bank account, and this is the case when the account in Dubai, UAE may be the best solution. It is important to note that when we use the term ”offshore,” we mean that you open an account outside of the country of your main residence. Such country for account opening can be, for example, Switzerland, UK, UAE, Singapore, etc. The reasons why you may need to open an offshore personal account abroad can include such scenarios as:

  • Safekeeping your money in the stable country with a reliable banking system
  • Obtaining useful and practical solution for your international banking requirements – getting and receiving payments, making deposits, etc.
  • You have a property in Dubai or plan to buy it. For such purposes, you would definitely need a current or savings bank account for the processing of the purchase and the following property administration. Another property-related case when you would have to open a personal/individual account in Dubai – if you have a property in the United Arab Emirates and want to sell it. As according to the UAE Land Department regulations applicable since 2017, the sales-purchase price for the property has to be provided in the form of the personal cheque issued in the name of the seller. Such cheque can be deposited on your personal account only.
  • Having easy and global access to a reliable and comfortable banking solution for you and your family. The offshore type of the account may be the best option for it.

What are the advantages of having an individual bank account in the United Arab Emirates

advantages of having an individual bank account

The United Arab Emirates is known for its stable and secure banking system thus opening a personal resident, or non-resident bank account in Dubai is the solution which gives you best benefits. Such advantages include:

  • High reliability and safety. The banking system of the UAE is highly regulated regarding the requirements to the banks thus is highly secure.
  • Global access - as the banks are very high-tech oriented you have a number of ways to access your individual over secure and developed internet and telephone banking.
  • 24-hours service - most of the UAE banks have the round-the-clock client support service.
  • Large selection of banks and current and savings offshore banking solutions thus you always find the right one for you.

Private / Privileged vs. regular personal banking

Even though in our article we often use both terms when talking about individual banks accounts and its advantages - “private”, as well as “personal” as these two terms, are often used by the broad public as synonyms. To be correct, we need to outline that there is some certain difference between the definition of the “private” and “personal” offshore bank account. The term “personal bank account” is regularly referred to regular individual accounts with standard minimum balance requirements and standard banking services.

“Private” ones the type of accounts which are referred to individual accounts which are best suited for high net worth individuals. Such offshore accounts can have different status in terms of the level of service, banking conditions, etc. whereby for such accounts there are much higher minimum account balances (regularly minimum balance requirements start from USD 500.000,- and above).

There is also the type of current and savings individual bank accounts in Dubai which is, so to say, in between regular and private account. These are Privileged accounts. Such offshore accounts may not require any special minimum account balance, or such requirement can be substantially lower than for the private ones (regularly the minimum balance starts from USD 100.000,- or you need to get the certain monthly income received on your account which is on average around USD 10.000,- or above). When opening such type of individual account, you are assigned a private manager as well as have some other benefits in the form of extra banking services and preferred rates.

Below is the short list of just some of the banks in the UAE which provide both private, privileged and regular personal offshore accounts.

  • ADCB
  • ABN Amro
  • ADIB
  • CityBank
  • Commercial Bank of Dubai
  • Commercial Bank International
  • Emirates NBD
  • Mashreq
  • HSBC
  • Standard Chartered

When talking about private and privileged bank accounts types, the Dubai banks above have some special departments/units for providing services for the clients in these particular groups which is another clear benefit as you are serviced faster.

The difference in between resident and non-resident individual offshore accounts

We have already mentioned that there are two different types of bank account in the UAE in terms of the residency of the account holder. Generally, we need to mention that once you have the residency in the UAE, account opening becomes easier and you can even open an account with zero balance. For the residents of the United Arab Emirates practically all banks open individual accounts (except the ones who offer commercial accounts only). For the residents, there are also easier requirements in terms of minimum account balance on your current or savings account.

When opening a current account for UAE non-resident, such accounts would have the respective status of the individual accounts of country’s non-residents. The main differences between such accounts are as follows:

  • The accounts would have the status of savings accounts and not current accounts. Means you would not be able to receive the cheque book. Moreover, if you need a credit card, you would need to out the respective deposit.
  • The minimum account balance which shall be on such offshore account by the end of each month is higher than for resident bank accounts.
  • Not all banks in Dubai open individual accounts of this type.
  • In case you need any personal credit/loan - usually, such accounts do not qualify for these services.

In all other terms, such individual offshore accounts have all the necessary features benefits and advantages - multi-currency savings accounts, debit and credit cards (credit - subject to respective deposit), online banking and tel. banking, etc. and are the best solution for the ones who want safety, stability and global access.

The difference of individual private account to other banking solutions in Switzerland and other countries

When we talk about current and savings private bank accounts (a type of accounts for high net worth individuals), often we would think about Switzerland first. What you need to consider when deciding which banking option to choose - UAE or Switzerland - please take the following five points under consideration.

  • Swiss banks have larger minimum offshore account requirements - normally from USD 1 million and above whereby 1 million is on the low end. UAE private banks start from USD 500.000,- and some - even less.
  • When talking about the number of documents you need to provide, the UAE banks requirements are slightly easier than the Swiss ones.
  • Switzerland does not offer tax-free companies. It also does not offer tax-free personal income schemes. In case of the UAE, you can have your personal offshore account not only as an individual, but also being held by your tax-free international business company. Moreover, you can become UAE tax resident (which is clearly less expensive and much faster than obtaining such status in Switzerland).
  • Private Banks in Switzerland normally do not want you to have any active transactions on your non-resident individual account. UAE banks have no issue with that provided they know the background of the transactions.
  • If you want to have the combination of Swiss and UAE advantages - there are Swiss banks which are operating in the UAE, and you can perfectly benefit from such combination.

Top Ten Tips to know to open your private bank account in Dubai successfully

  • For an account opening – be it personal or for business – you need to meet the official bank representative in person. For this reason, you need to visit the United Arab Emirates. If you use the support of the professional advisory company one-day visit would be sufficient. If you handle it yourself – you may need to come for a longer period.

    Note: some consultants may give you the info that you can open your current or savings bank account in the UAE without visiting Dubai and without seeing the bank officer. Such info is misleading as this requirement is the obligatory one from the United Arab Emirates central bank and if not fulfilled – your account, if managed to be opened, is under risks of closure or blocking.

  • Clearly distinguish between the private and business account in Dubai and keep in mind the fact that you cannot use the personal account in UAE for business purposes. Banks see the account activities and, if there are some business transactions on your private/individual bank account, the bank can ask you to close your account, or can even potentially lock your money on it and ask for clarifications. For this reason, if you need an offshore account which can also be used for business, instead of opening a personal account, you shall choose the option of corporate/business account in Dubai. Such option can be applied together with the UAE IBC company which is not expensive and is fast to register.
  • Be aware that opening of a private account would require some documents to be provided including the info on the source of funds you plan to deposit on your personal Dubai account.
  • There are clear differences between resident and non-resident bank account in the UAE. Non-resident has certain limitation such as non-availability of cheque book and minimum balance which can not be zero. However, all main banking features and benefits including online banking are fully available.
  • Only certain banks open non-resident bank accounts. Thus, if you are the non-resident of the UAE, you need to know which bank to contact to open your personal offshore account.
  • Current or savings account opening takes time. Such time can be from a couple of weeks. Thus, if you need your personal bank account to be operational by a certain date – make sure to start the process of its opening in time.
  • Private / Privileged banking provides you certain advantages such as individual bank account manager, better exchange rates, etc. if you have sufficient funds to classify for the privileged UAE banking – it pays back.
  • You need to be aware of the requirements of each certain bank and fulfill such. For example, if you open your privileged bank account – you have to keep your minimum account balance. Otherwise, your account may be closed. Or, for example, if you open your account as the UAE resident and then cancel your residency, and the bank opens accounts for UAE residents only – you may need to close your account in the given bank and open it in another bank which has the non-resident services or.
  • Each bank in the UAE has its clear particulars and requirements and, thus, for you to be happy with your individual account and benefit from it, you need to select the right offshore bank.
  • All banks in the United Arab Emirates provide its services in English and other languages thus you do not need to know Arabic to use its services and use banking as you do in any other country where you have your individual accounts.

Documents required - what you need to prepare to open your individual bank account in Dubai

There are standard documents which are required for opening of your offshore account in a UAE bank. Such documents include

  • Your passport copy and, if applicable, your UAE residency visa.
  • Bank reference letter (or bank statement) from your individual account from another bank.
  • Utility bill ( the bill for water, electricity, etc. with the indication of your residential address).
  • Your professional cv - with the short description of your professional activities.
  • Other supporting documents which may be requested, for example, if you inform the Dubai bank that you would receive dividends form your business - documents on such business if you get money from sale or rent of a property - documents on such property.

As you can see, the list of required documents is typical when compared with banks in other international offshore jurisdictions whereby provides you all the benefits of current and savings account you expect from it as a resident or non-resident.

How to open your individual bank account – the available options and which one to choose

There are two main possibilities for the opening of your personal account in Dubai.

The first one is that you make your own research by contacting various banks in the UAE on your own, select the one which fits your requirements and proceed with individual current or savings account opening. You can clearly opt for this solution; however if you are outside of the UAE, such solution can be time -consuming and may require a longer visit to the United Arab Emirates, maybe more than one.

The second option is to get in touch with the professional consulting company such as us. We work with al UAE banks for a number of years, know all the particulars and which ones work with residents and non-residents and would make the right selection for you and support you in your offshore account opening procedure such a way that you would have the advantage of the minimum efforts and would need to visit Dubai, UAE for one day only.

Personal vs. corporate account - be sure to know the difference

There are two main scenarios when using corporate instead of private/individual account.

  • Scenario one is obvious - when you need your account for business. Your personal account is not designed for business purposes, and Dubai banks would not permit you to use it for such. Means if you need to make some business banking transaction you have to have a business account. Such account can be opened in the UAE for a foreign company. Hoverer the best practical solution is to open it for the UAE company. Opening a UAE company, especially if this the International Business Company, can take just 24 hours and is associated with minimal costs.
  • Scenario two - you use the offshore account as the regular individual account but need an additional level of privacy. For this purpose, the personal account can also be opened in the form of company account whereby the account would be held by your UAE IBC company. Such company is fully under your control and gives extra flexibility and safety. Thus is also worth to consider such solution which can truly benefit you.

Why a bank can close your personal account – most common reasons and what to do if it happened

There are certain situations when your personal offshore bank account in Dubai, even if you have done the best work to choose the right bank for you, may be closed by a bank. Such cases can happen, for example, due to:

  • Change of bank policies – imposed imitations for certain citizenships or residents, change in the minimum bank account requirements, change in the policies of working with the UAE residents and non-residents, etc.
  • Your non-compliance with bank requirements – for example, doing some transactions with the countries or parties which are under certain regulatory restrictions.
  • Change of your status from resident to non-resident whereby bank works with UAE residents only.
  • Not keeping the minimum current or savings bank account balance. When you open your individual offshore account bank clearly indicated the amount of money you need to keep on your account as the minimum. If you do not fulfill this requirement for a couple of months - the bank can close your account.
  • Account inactivity – if you chose the individual account with the minimum account balance package and had very few or no bank transactions, after a certain time bank may ask you to start using your account or close it.

Unless the bank has closed your personal account for some severe violations and has reported the case to the UAE central bank, there is always the possibility to open an account in another bank in Dubai and continue your offshore banking operations in the United Arab Emirates.

If you do not need your individual or corporate account anymore – what you need to do

Please be aware that if you do not need your offshore account in the UAE – be it personal or business – and have zero balance on it - we really suggest you close it according to the bank requirements and procedures. Why is this important and serves to your advantage? For a very simple reason- if you do not close your individual or corporate account, Dubai bank would keep applying bank account changes to it. Such charges can sum up over a time period to a noticeable amount. And, if you decide to visit the UAE sometime later, you may face the scenario that you would be liable to pay all these outstanding banking fees. For this reason, the best solution is just to close your UAE personal account if you do not need it anymore.

Five most common mistakes with personal bank accounts in Dubai

A lot of mistakes when opening and operating your individual accounts in Dubai come from the wrong expectation and assumption’s. What are these? See some below:

  • You just need your passport, and the bank shall not ask you any questions.
  • Every bank would be happy to see you as a client and open you current or savings account with a matter of days.
  • If the bank asks questions within account opening procedure – you can ignore such questions, and the account would still be opened.
  • Once your offshore bank account in Dubai it opened – you can do on it whatever you want.
  • Keeping account with zero balance once opened is totally fine any bank shall be happy with the simple fact that you are with them and have great benefit from it.

Last points which are important to mention about your individual bank account

  • To be able to open your account in Dubai within a short visit you need to get in touch in advance with the bank of your choice and prepare all necessary documents.
  • Instead of a personal account, you may also consider a Dubai bank account opened in combination with the international business company in the UAE. Such type of offshore account can be used for private as well as business purposes whereby, as the benefit, there would be no corporate taxes on activities of such company which is the great advantage to have.
  • There is also the option to obtain the UAE residency and then open your account as the UAE resident. There are certain procedures for it and such solution, apart from the bank account as such, gives you the best level of protection of personal information and the residency status in the country.
  • Your current or savings account can be a multi-currency account in any international currency - be it USD, EUR, GBP, CHF, etc.
  • All banks in the UAE are high-tech and technology-oriented and provide the best and highly developed internet banking and telephone banking services.

If you need more info on how to open your personal offshore account, your non-resident bank account together with the UAE international business company or get all the details on how to become UAE resident and have the residential account – please write us, and we provide you all additional details, what steps you need to follow and offer you the best solutions for your particular case with the minimum requirements and maximum benefits.

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