Major Challenges in Opening a New Corporate Bank Account in UAE
The nationality of key individuals involved in the company plays a crucial role. Citizens from high-risk countries, politically unstable nations, or countries under sanctions may face difficulties in opening a bank account or conducting transactions.
UAE banks typically require companies to have a physical address. They conduct Contact Point Verification (CPV) through third-party agents to verify the actual presence of the mentioned address. A field visit report is submitted to validate the information. Most of the small companies having their operation from virtual officers find it difficult to open one bank account.
If your business primarily engages in transactions with high-risk countries or sanctioned nations, it can be challenging to register a bank account. Financial institutions must comply with anti-money laundering laws and relevant regulations to address the risk of money laundering and terrorism financing.
Most UAE banks require a residency visa. Some banks also ask for proof of a local address in the UAE for the general manager of the company or from shareholders. Having a residency permit for the owners enhances the credibility of the business and demonstrates its intention to operate in the UAE.
Banks assess the applicants' understanding of the business they intend to operate. Factors such as prior business experience, qualifications, and debt history are considered during the evaluation process.
For companies with free zone licenses, banks take into account the reputation of the free zone authority under which the company is registered. Banks may view owners of businesses in low-profile free zones with more suspicion. Highly regulated free zones with expensive licenses are generally viewed more favorably by banks, as they demonstrate a genuine intention to conduct business.
