Open an account in Dubai: The banking system in the UAE

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The banks within the UAE have notable advantages compared to other international banks. They are characterized by a high quality of service as well as structured and reliable account management in the online banking sector. Therefore, opening a bank account in Dubai as well as in other parts of the United Arab Emirates is a lucrative solution not only to secure business transactions but also to discreetly conduct foreign business.

At this point, however, it should be mentioned that it is necessary for you as the account holder to be present in person to open both a private and a corporate account, as this is the official requirement of the Central Bank of the UAE.

What banks are there in the United Arab Emirates?

There are several leading financial institutions in the UAE. In addition, there are 26 foreign, 8 Islamic and 23 local banks to choose from. 5 of these banks dominate the banking sector:

First Abu Dhabi Bank (FAB)

FAB is the largest bank in the UAE and is one of the safest banks in the world. Erste Abu Dhabi Bank offers its customers a wide range of services and is represented not only in Asia but also in Europe.

Mashreq Bank

Mashreq Bank is based in Dubai and is one of the oldest banking institutions in the UAE. It is the first bank to introduce consumer loans and has a total of 45 local branches and 20 branches abroad.

Emirates NBD

The NBD is officially known as the Dubai National Bank with over 250 branches around the world. Its main services include Islamic banking, operations, wholesale banking and information technology.

Dubai Islamic Bank (DIB)

As the name suggests, DIB is the largest Islamic bank in the UAE and also the second largest in the world. It is also based in Dubai and serves around 1.7 million customers worldwide. This bank focuses on real estate development, corporate and customer banking.

Abu Dhabi Commercial Bank (ADCB)

ADCB is a state-owned bank that is largely owned by the government and employs around 17,000 people worldwide. In addition, Al Hilal Bank recently merged with Union National Bank and ADCB.

Furthermore, the banks within the UAE can be divided into 4 different categories:

• Commercial banks; (individual and corporate accounts, loans)
• Merchants/issuing banks; (purchase and sale of shares)
• Industrial banks; (production activity)
• Islamic banks. (in coordination with religious aspects)
  The latter in particular are becoming increasingly important in the banking sector. For example, Islamic banks do not have a prime rate and do not enter into business relationships in the areas of gambling, tobacco and alcohol consumption, etc.

What is an offshore account?

Whether you are employed by a company or self-employed in Dubai, in both cases it is necessary to open a bank account in order to carry out or receive monetary transactions. A bank account that you open for these purposes outside your home country because you have changed your residence is called an offshore account.

Since Dubai is also an international financial center and the banks adapt to any economic situation, you can be sure that your money is in good hands, which also speaks in favor of opening an account in Dubai.

The actual opening of such a bank account then takes around 7-8 working days and is a complex process that can certainly cause confusion for borrowers from abroad. This is where our experts at EXTENT come into play, as we not only advise and support you in setting up your company in Dubai, but also take care of opening your bank accounts so that you can fully focus on expanding your business.

The difference to the onshore account

The main difference between the various company accounts lies in the legal form of the company itself. While with a mainland company you must conduct your business activities within the UAE, with a free zone or offshore company it is the other way around. Accordingly, the type of bank account depends on where the business activity is carried out.

This means that an onshore account is required for companies in Germany and an offshore account for all those companies that conduct business outside your jurisdiction.

Private accounts in Dubai

Dubai offers both nationals and foreigners the opportunity to open private accounts. This also applies to accounts that are to be opened outside the country.

In the case of private accounts, a distinction can also be made between privileged private accounts, which are accompanied by special benefits:

• Shorter account opening time
• Favorable exchange rates
• Personal advice and manager services

However, in order to open such a bank account, a minimum deposit of 100,000 US dollars in the relevant currency is required.

Credits, loans and mortgages

The above option is available to both individuals and companies in and outside the UAE - with the exception of credit services. Loans can only be granted if the company or individual is based in the UAE. It is also required that the company is registered in the UAE, has at least three years of successful operation and positive financial indicators. Similar conditions apply to private individuals in order to be able to take out a loan.

Useful tips for successfully opening a bank account in the UAE

1. In order for a bank account not to be frozen, it must be used at least once within 6 months.
2. It does not matter which bank you choose, but whether you are a resident or non-resident.
3. If you are an employee and wish to open an account in Dubai, you must ask your employer for written permission.
4. Terms and conditions and standards may vary from bank to bank.
5. No private account may be opened for business matters.

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