An Overview of Banking in the UAE

Before we dive into how to open a bank account in the United Arab Emirates, let’s take a minute to talk about the banking sector. The UAE has a banking system that’s regulated by a central bank.

Apart from the central bank, there is a total of roughly 50 international and local banks scattered throughout the country. The banking system is considered to be fairly stable thanks to the banks’ liquidity buffers and resilient capital levels.

Most banks in the UAE are funded by deposits. Their strong capital levels provide a large buffer that absorbs any losses.

The UAE has four different types of banks. These types of banks include:

• Commercial banks
• Investment banks
• Industrial banks
• Islamic banks

Islamic banks are a type of bank that has grown in popularity. In recent years, UAE banks have worked to expand their banking services to consumers using Islamic financial requirements. This is important for the many Islamic citizens living in the country.

At the moment, there are 23 Islamic bank windows and 8 full-fledged Islamic banks in the nation. These institutions make up nearly 20% of the UAE’s banking sector.

Aside from Islamic banks in the nation, the UAE banks also cater to foreigners and international consumers. They have adopted several international regulations and offer all their banking services in both Arabic and English.

A few international regulations that UAE banks comply with include:

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

Types of Bank Accounts in the UAE

The next thing to know about before looking into bank account opening in the UAE is what types of bank accounts you can open. There are several different types of bank accounts, which cater to both non-residents and residents of the UAE.

Current Accounts

An Emirates Islamic Current Account is a transaction account, which comes with a checking option for the accountholder. An Emirates Islamic Current Account comes with Debit card facilities, check-book, along with many other banking benefits.

A current account is ideal for transfers and transactions made on a daily basis. Your current account will come with a check-book, which is great for issuing rent checks to your landlord.

Banks in the United Arab Emirates usually allow you to open two types of current accounts. One type comes with salary transfers while the other does not.

If you have a job in the UAE, you can open an account at your employer’s bank to get your salary faster. If you use a different bank from your employer, it could take up to a few days for your salary to arrive.

You can open an Emirates Islamic Current Account for several major currencies, including USD*, GBP, AED, Euro, Yen, Saudi Riyal, Kuwaiti Dinar, Canadian Dollar, Qatari Riyal, Bahraini Dinar and Omani Riyal. However if you open your Current Account in a different currency it will not offer debit card and cheque book facility options.

When opening a Current Account the minimum balance requirement must maintain at least AED 3,000 in the account. However when your salary is transferred to the Current Account, the minimum balance requirement is waived.

Savings Accounts

Many people in the UAE open a savings account so that they can get the most out of their money. Savings accounts offer higher interest rates than checking accounts do, but provide limited access to funds. They also can cause penalties for withdrawals.

Savings accounts usually operate on either a variable or fixed interest rate. Within your savings account you can choose which currency you’d like to denominate your funds in.

Savings accounts can also be used as salary accounts. However, savings accounts do not usually come with a check-book, which can make them a little inconvenient for this type of use.

When opening a savings account is important to choose the right bank. The interest rate, minimum deposit and fees for your savings account will differ from bank to bank. While these amounts may be minor they can add up over an extended period of time, costing you money.

Investment Accounts

Another type of service you can take advantage of when opening a bank account in the UAE is an investment account. In the UAE, you can sign an investment agreement with any bank, which allows you to open an investment account.

The investment period for these usually ranges from 12 months to 10 years, but they can be longer, too. The investment agreement gives you a minimum assured ROI of 3-7% annually.

Just note that investment accounts come with minimum balances. The minimum required balance will vary depending on which bank you choose to partner with.

Offshore Accounts

The UAE is a haven for expats, which is why the nation offers offshore banks from jurisdictions the world over. This is especially true in Dubai, where many expats choose to live and work.

In the United Arab Emirates, anyone who holds a valid residence visa is eligible to open an offshore account and use it to import and export their funds. It’s considered to be a secure, stable, and reliable way of moving money and usually involves lower taxes than other banking options.

Offshore banking encompasses many different services in the United Arab Emirates. A few of these services include:

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

How to Open a Bank Account in UAE

With all this information, you’re ready to go ahead and open a bank account in UAE. Doing so is very quick and efficient, and typically takes anywhere from a couple of days to a couple of weeks.

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

• Your original passport as well as a copy
• A copy of your UAE resident visa
• A salary certificate
• Your Emirates ID card or a copy of your registration form if you haven’t yet received it

If you’re a non-resident, you’ll only be able to open a savings account. Even though you won’t get a checkbook, you’ll still receive a debit card that you can use to withdraw money.

To open a savings account as a non-resident, many banks run background checks. Then, they request the following documents:

• A recent utility bill
• A reference letter from your home bank
• The six most recent monthly bank statements from your home bank
• Information proving consistent funding sources

These documents are needed to make sure that you really do have the means to maintain a bank account in the UAE. A Non-resident savings account can take a little longer to open thanks to the extra documentation.

Opening an Account on a Mobile Device

Another important thing to note about opening a bank in the UAE is mobile banking. In a society that’s focused on the latest technology, it’s no surprise that there are two banks that make it possible for you to open an account in their mobile phone banking app.

Whilst most banks will have a mobile banking function to help you transfer money and check your balance, they may not allow you to apply for new accounts through their mobile banking app.

Some of the banks that allow mobile account creation are Liv, which is backed by Emirates NBD; Neo, which is powered by Mashreq; and YAP, the UAE’s first independent digital banking platform.

To open a bank account with one of these banks, you’ll need to start by downloading the application. Then, scan your Emirates ID into the system.

From there, you’ll be guided through an account opening screen similar to those found online. Once the account is open, you’ll need to add some funds to get the account started.

As soon as your account has funds in it, you’re ready to go! In a day or two, a local delivery crew will contact you to let you know when they’ll deliver your new debit card.

The debit cards from these banks work internationally and at several different ATMs. Plus, your bank comes with a Swift code and IBAN account number so that you can easily make transfers using your new account.

Corporate Accounts

If you’re planning to use your bank account to do business in the UAE, you’ll need to open a corporate bank account. The reason why you have to open a corporate account is that UAE law prohibits you from doing business with a personal account.

Generally speaking, corporate accounts should be current accounts. The reason for this is so that they can process a large volume of transactions. Opening a current corporate account in the UAE usually takes between two and four weeks.

When you go to open a corporate bank account, it’s important to note that you’ll need a few additional documents to do so. The exact documents may vary depending on your chosen bank and your type of company, but they usually include:

• Your company trade license
• A certificate of your company’s registration
• Share certificates
• The company’s articles of association and memorandum
• A letter from the board giving a company officer the power to open a corporate account
• Visas and passports from all shareholders

With these documents in hand, you’ll be all set to open a bank account.

How to Choose the Right Bank Account in UAE

As an expat, it can be nerve-wracking to open a bank account in the UAE. You might be worried that you won’t be able to get all the services you need because you’re a foreigner.

The good news is that roughly 85% of the UAE’s population are expats, meaning that banks are more than used to dealing with your needs. They’ll have the resources needed to make sure that you get the assistance you require in opening your account.

Either way, there are a few questions you can ask to help you make sure that you’re opening a bank account with a good financial institution. Some key questions to ask include:

• Do you have a required minimum balance and if so, what is it?
• What fees and penalties are associated with the account?
• Do you have requirements for salary transfers?
• What is the monthly withdrawal limit?
• What ATM cards, debit cards, and new checkbook fees should I be aware of?
• Do you offer international transfer services and if so, where to and how long do they take?
• How many ATM locations do you have and where are they?
• What happens if my account has an outstanding loan and I lose my job?

Getting the answers to these questions will help you figure out whether or not this bank can meet your needs.

In addition to these questions, you should check to see if your employer banks with your chosen financial institution. This can make it easier for you to get access to your salary.

You can also check out what other colleagues, friends and reviewers have to say about the bank. This will give you a good idea of what it’s like to bank with this company.

Credit Cards for Business in UAE

Business credit cards are special credit facilities designed to help business owners make small purchases on credit. Business credit cards are meant for business expenses and not for any individual personal use. While you can use your business credit card for emergency finances, the most noteworthy reason to get one is to build a credit score for your business. Your credit score is an important metric associated with your business and is vital to its financial health.

It is important that you take the time to find the best credit card in the UAE for your business as there are many options form numerous different banks. To receive a credit card form a bank in the UAE there is specific criteria that you must meet. Eligibility to gain a credit card will come down to many factors including age, income and proof of a valid trade license. 

Manage Your Money With Ease in UAE

Knowing how to open a bank account in UAE is important for living and working in this beautiful country. With this handy guide, it’s easy to open a bank account and control your finances.

Are you ready to move to the UAE to set up a business? We can help! Get in touch with our team and we’ll help you navigate the process of moving to the UAE and opening a business there.