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A Look at Banking in the UAE

Before we explain how to open a bank account in the UAE, let’s first talk about the banking sector. The UAE’s banking system is regulated by a central bank and includes around 50 international and local banks. The system is stable due to strong liquidity buffers and high capital levels, which help absorb losses.

Most banks in the UAE rely on deposits for funding. Their strong capital levels provide a large buffer to handle any losses.

There are four types of banks in the UAE:

1. Commercial banks
2. Investment banks
3. Industrial banks
4. Islamic banks

Islamic banks are especially popular. In recent years, UAE banks have expanded their services to meet Islamic financial requirements, which is important for many Islamic citizens in the country. Currently, there are 23 Islamic bank windows and 8 full Islamic banks in the UAE, making up nearly 20% of the banking sector.

Besides Islamic banks, UAE banks also serve foreigners and international customers. They follow several international regulations and offer services in both Arabic and English. Some of these international regulations include:

• International Accounting Standard
• International Financial Reporting Standards
• Basel III Capital Adequacy Regulations

Types of Bank Accounts in the UAE

Before you learn how to open a bank account in the UAE, it’s important to know the different types of accounts available. There are several types of bank accounts for both residents and non-residents of the UAE.

Current Accounts

An Emirates Islamic Current Account is a transaction account that comes with a checking option, debit card, checkbook, and many other benefits. It’s ideal for daily transfers and transactions, like paying rent with a check.

There are two types of current accounts in the UAE:

1. With salary transfers
2. Without salary transfers

If you have a job in the UAE, opening an account at your employer’s bank allows you to get your salary faster. Using a different bank might delay your salary by a few days.

You can open an Emirates Islamic Current Account in various major currencies such as USD, GBP, AED, Euro, Yen, Saudi Riyal, Kuwaiti Dinar, Canadian Dollar, Qatari Riyal, Bahraini Dinar, and Omani Riyal. Note that accounts in currencies other than AED do not offer debit card and checkbook facilities.

A minimum balance of AED 3,000 is required for a Current Account, but this is waived if your salary is transferred to the account.

Savings Accounts

Savings accounts in the UAE offer higher interest rates than checking accounts but have limited access to funds and may have withdrawal penalties. They can operate on variable or fixed interest rates and can be denominated in various currencies.

While savings accounts can also be used as salary accounts, they typically do not come with a checkbook, which might be inconvenient.

When choosing a savings account, consider the interest rate, minimum deposit, and fees, as these can vary between banks and impact your savings over time.

Investment Accounts

Investment accounts are available in the UAE through an investment agreement with a bank. These accounts typically have investment periods ranging from 12 months to 10 years, with a minimum assured ROI of 3-7% annually.

Investment accounts require a minimum balance, which varies by bank.

Offshore Accounts

The UAE, particularly Dubai, is popular with expats, and offshore banking is widely available. Anyone with a valid residence visa can open an offshore account to securely and reliably import and export funds, often with lower taxes than other options.

Offshore banking services in the UAE include:

• Asset protection
• Wealth management
• Portfolio management
• Private bank accounts
• Company formation
• Inheritance planning

How to Open a Bank Account in the UAE

Opening a bank account in the UAE is a quick and efficient process, usually taking from a few days to a couple of weeks. Here’s what you need to know:

For UAE Residents

To open a current or savings account, UAE residents need to provide the following documents:

• Original passport and a copy
• Copy of UAE resident visa
• Salary certificate
• Emirates ID card or a copy of the registration form if the ID has not yet been received

For Non-Residents

Non-residents can only open savings accounts. While you won’t get a checkbook, you will receive a debit card for withdrawals. The process involves background checks and requires the following documents:

• Recent utility bill
• Reference letter from your home bank
• Six most recent monthly bank statements from your home bank
• Information proving consistent funding sources

These documents ensure that you have the means to maintain a bank account in the UAE. Opening a non-resident savings account may take longer due to the additional documentation required.

Opening an Account on a Mobile Device

In the UAE, you can open a bank account using your mobile phone thanks to the latest technology. While most banks offer mobile banking for transfers and balance checks, not all allow you to open new accounts through their apps.

However, there are a few banks that do:

• Liv (backed by Emirates NBD)
• Neo (powered by Mashreq)
• YAP (the UAE’s first independent digital banking platform)

Steps to Open an Account via Mobile App

1. Download the App: Start by downloading the banking app (Liv, Neo, or YAP) on your mobile device.
2. Scan Your Emirates ID: Use the app to scan your Emirates ID.
3. Complete the Setup: Follow the on-screen instructions to complete the account setup.
4. Add Funds: Deposit some money into the new account to activate it.
5. Receive Your Debit Card: Within a day or two, you’ll be contacted by a local delivery crew to arrange the delivery of your new debit card.

These debit cards can be used internationally and at various ATMs. Your new account will also come with a SWIFT code and an IBAN number, making it easy to transfer money.

Corporate Accounts

If you’re planning to conduct business in the UAE, you’ll need to open a corporate bank account. UAE law requires this, as it prohibits business transactions through personal accounts.

Corporate accounts are typically current accounts, allowing for a high volume of transactions. Opening one in the UAE usually takes between two to four weeks.

Required Documents for Opening a Corporate Account

When opening a corporate bank account, you’ll need additional documents. While the exact requirements may vary depending on the bank and your company type, they generally include:

• Company trade license
• Certificate of company registration
• Share certificates
• Articles of association and memorandum of the company
• Letter from the board authorizing a company officer to open the account
• Visas and passports of all shareholders

With these documents, you’ll be ready to open a corporate bank account in the UAE.

How to Choose the Right Bank Account in the UAE

As an expat, opening a bank account in the UAE might feel daunting. However, with roughly 85% of the population being expats, banks are accustomed to catering to your needs and providing necessary assistance in account opening.

To ensure you choose the right bank account, consider asking the following questions:

1. Minimum Balance Requirement: Does the account have a required minimum balance, and if so, how much is it?
2. Fees and Penalties: What fees and penalties are associated with the account?
3. Salary Transfer Requirements: Are there requirements for salary transfers?
4. Withdrawal Limit: What is the monthly withdrawal limit?
5. Card Fees: Are there fees for ATM cards, debit cards, or new checkbooks?
6. International Transfer Services: Does the bank offer international transfer services, and if so, where can you transfer money and how long does it take?
7. ATM Locations: How many ATM locations does the bank have, and where are they located?
8. Loan Repayment in Case of Job Loss: What happens if your account has an outstanding loan and you lose your job?

Obtaining answers to these questions will help you determine if the bank can meet your needs.

Additionally, consider if your employer banks with the chosen financial institution, as this may facilitate salary access. Reviews from colleagues, friends, and online sources can also provide valuable insights into the banking experience with a particular institution.

Business Credit Cards in the UAE

Business credit cards are specialized credit facilities tailored to assist business owners in making small purchases on credit. They are intended for business expenses rather than personal use. While these cards can be used for emergency financing, their primary purpose is to build a credit score for your business, which is crucial for its financial health.

When selecting a business credit card in the UAE, it’s essential to explore various options offered by different banks. However, to qualify for a credit card from a UAE bank, you must meet specific criteria. Eligibility is determined by factors such as age, income, and proof of a valid trade license.

Manage Your Finances with Ease in the UAE

Understanding how to open a bank account in the UAE is essential for both living and working in this vibrant country. With this guide, the process of opening a bank account becomes straightforward, allowing you to manage your finances efficiently.

Are you considering relocating to the UAE to establish a business? Virtuzone can assist you! Reach out to our team, and we’ll guide you through the process of moving to the UAE and setting up a business there.