One of the key considerations for any company establishing in the UAE is setting up a local bank account in order to be able to fully invoice, pay and trade locally and, since the start of VAT and CIT in the UAE, also to be able to satisfy the authorities in this area too with regards to mandatory tax payments.
Perhaps an obvious statement, but a new company in the UAE can only open a bank account once the company itself has been established and its trade licence issued. You can of course start talking to banks before the formation process is finished, but they will only be able to start on-boarding you after its UAE trade licence has arrived. Many of the documents that are needed for setting up the company – e.g., notarised, attested & translate Powers of Attorney, Board Resolutions, parent company corporate docs etc. – are also needed for the bank account opening process.
However, there are many more inputs required, and most companies find opening a bank account here to be the most frustrating part of establishing operations in the UAE. All banks have UAE Central Bank mandated KYC requirements which are very document-heavy and that take a long time to work through. You should allow three months for this, but it can take longer.
Of the banks that operate here, HSBC would be the most familiar to UK companies, however they don’t really cater to the SME market. Standard Chartered is also present and Barclays has a smaller presence, but they are not active in the general corporate market. As such, it’s more likely that you will go with one of the local banks – of which there are many – and we’d be happy to suggest a couple to work with where we have found their approach to be more supportive and pragmatic for incoming firms, given the inevitable pains of on-boarding.
‘Challenger banks’ are starting to crop up here with the likes of WIO and Zand, both marketing themselves as 100% online, however it’s early days on this and there’s not yet a sufficient body of evidence for us to have an opinion either way.
Also, of interest are new-to-market cross-border payments companies like 3S Money who are regulated in both the UK and UAE. Whilst these are not banks and don’t offer equivalent local facilities and features in the UAE, the ability to pay & receive in multiple currencies is interesting for UK firms and is perhaps something that should be looked at from the UK before starting out here, to at least establish a UAE Dirham account linked to the parent entity which would allow for immediate transactions in local currencies.
As with all things set-up in the UAE, this is something of a complicated area and one where we can guide and signpost you to make it easier than it would otherwise be.
