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

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

However, it should be mentioned here that opening both a private and corporate account requires you to be present in person as the account holder, as this is the official requirement of the Central Bank of the UAE.

Which 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 within 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 within the UAE. It is the first bank to introduce consumer credit and has a total of 45 local branches and 20 branches abroad.

Emirates NBD

The NBD is officially considered the Dubai National Bank with over 250 bank branches spread across the entire world. Their 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 within the UAE and also the second-largest in the world. It is also based in Dubai and serves around 1.7 million customers worldwide. The main areas of activity of this bank are 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.

Banks within the UAE can also be divided into 4 different categories:

• commercial banks; (individual and corporate accounts, loans)
• merchants/issuing banks; (buying and selling 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 have no key interest rate and the banks do not enter into business relationships in the areas of gambling, tobacco and alcohol consumption, etc.

What is an offshore account?

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

Since Dubai is also an international financial center and banks adapt to every economic situation, you can assume 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 when borrowing from abroad. This is where our experts from EXTENT come in, because we not only advise and support you when setting up your company in Dubai, but also open your bank accounts so that you can fully focus on expanding your business.

The difference to an onshore account

The main difference between the various company accounts lies in the legal form of the company itself. While a Mainland company requires you to carry out your business activities within the UAE, it is the opposite case with a free zone or offshore company. Accordingly, the type of bank account depends on where the entrepreneurial activity is carried out.

An onshore account is therefore required for domestic companies and an offshore account for all those companies that conduct business outside their jurisdiction.

Private accounts in Dubai

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

In addition, private accounts can also be differentiated between privileged private accounts, which are accompanied by special services:

• shorter account opening period
• favorable exchange rates
• personal advice and management services

However, in order for such a bank account to be opened, it is necessary to deposit a minimum amount of 100,000 US dollars in the corresponding currency.

Loans, 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 issued if the company or person is a resident of the UAE. It is also required that the company is registered in the UAE, has at least three years of successful work and has positive financial indicators. Private individuals have similar conditions in order to be able to take out a loan.

Useful tips for successfully opening a bank account in the UAE

1. To prevent a bank account from being frozen, it must be used at least once within 6 months.
2. It doesn't matter which banking institution you choose, but whether you are a national or a foreigner.
3. If you are an employee and want 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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