When speaking about banks and the financial system of the UAE, it is necessary to note a few features of this system. First of all, historically the banking system was being shaped based on the UK financial system. The proof of it is the availability of several UK financial institutions in the UAE, and the law system applicable in the Dubai international financial centre (DIFC).
It is important to note that there are essentially 2 territories available for banks to carry out their activities: the main territory of the country and the Dubai International Financial Centre. This fact should be taken into consideration since these two categories of banks have significant differences when chosen a bank to open a private or a corporate account.
Banks in the main territory of the UAE
These are predominantly large local banks of the United Arab Emirates and other countries of the region. These financial institutions can provide services to both private and corporate clients within the UAE with almost no restrictions. Restrictions may relate only to the internal policy of the financial institutions, which defines target groups of clients and bank specialization. The financial institutions of this group include such banks as, for example, Emirates NBD, ADCB, CBAD, Masreq, Noor Bank, etc.
This group also includes several large foreign banks, which operate in Dubai. These are such banks as, for example, Standard Chartered, HSBC, BNP Paribas, Lloyds Bank, etc.
It should be noted that foreign banks of this category open private and corporate accounts mostly only for the UAE residents and have high minimum balance requirements. In this respect, the local banks of the countries of the region are much more attractive as they open accounts for non-residents and put much lower minimum balance requirements.
In fact, it is the main category of the Dubai financial institutions, which provides services to the majority of private and corporate clients in the UAE. As it was mentioned above, private and corporate accounts may be opened with these banks both for the UAE residents and for foreign individuals and companies.
Control over the activities of these financial institutions is exercised by the UAE Central Bank. The entire legislative framework within which they operate is also established by the Central Bank, which clearly defines the required level of own financial reserves and establishes the maximum permitted cost for services. The UAE financial system is extremely stable and competitive owing to these regulations.
When opening a private or a corporate account with the UAE bank of this category, it is important to take into account its specialization, the availability of the necessary services, and the requirements to the clients on the minimum balance, field, type and area of operation, etc.
Banks in the Dubai International Financial Centre
Banks that have a Dubai International Financial Centre (DIFC) license can operate only from the territory of this financial centre. Besides, they have certain limitations when working with clients: they cannot work with small private and corporate clients. A bank account with such banks can be opened only by the so-called "qualified investors", i.e. individuals and companies with certain volume of funds on accounts and a steady turnover. For example, the amount of the minimum required turnover for companies usually starts from 5 million USD. Individuals should confirm the availability of own funds starting from 1 million USD.
In fact, Dubai financial institutions of this type are mostly used for investment activities and private banking. Their services can be useful when opening bank accounts for large portfolio investors and wealthy private investors. However, they are not very appropriate for ordinary activities of typical commercial companies and regular private tasks. Among the financial institutions located in the DIFC, the UAE, we can single out ABN Amro, Bank of China, Bank Sarasin, Credit Agricole, Royal Bank of Scotland and others.
The regulations, which govern these banks, consist of two elements – the regulations of the UAE Central Bank and the regulations of the Dubai International Financial Centre (DIFC) itself.
General comments on banks and private or corporate bank accounts in the UAE
The core personnel of the banks, which are located in the main territory of the UAE, consists of the citizens of India, the Philippines, and the UAE. All the documents in the United Arab Emirates are available in two languages: Arabic and English. Banking servicing in Dubai is also offered in these two languages.
A standard set of documents should be provided when opening an account. For individuals this include a passport, a reference letter from the bank where you are served, a brief summary and a utility bill with your residential address. For companies – the same set of documents for the shareholders of a company and the incorporation documents of the company.
It is very important to note that after providing the bank with all the necessary standard documents, you may be asked for additional documents and specific details about your current business, the source of funds, planned business partners, etc. Such issues should be treated seriously and with due attention because each bank unavoidably has the compliance department, and your private or corporate bank account cannot be opened in the United Arab Emirates without its approval. In its turn, the department needs to understand the essence of the activity you plan and make sure that it does not contradict with applicable international standards and policy of the banking institution itself.
Which bank to choose for opening a bank account in Dubai, the UAE?
It is impossible to give a definite answer to this question. Clients have different tasks and for this reason for each person there is a bank most suitable specially for him. For example, some of banks have the minimum balance requirement starting from 50.000 USD, others – only from 5.000 USD. Some open accounts only for resident companies. Some do not work with certain countries. For this reason, it is necessary to consider all the details in order to answer the question about choosing the best financial institution for opening an account.
Our company has been operating in Dubai, the United Arab Emirates, for a very long time, and we know all the specifics and nuances of each bank. We know how to help you make the right decision that would best meet your needs. We provide full support when opening a private bank account for you and a corporate one for your company.