Challenges Expats Face When Opening a Bank Account in Dubai

If you want to take advantage of Dubai’s tax-friendly climate and stable economy without actually living there, opening an expat bank account can be a wise financial decision. However, settling into this dynamic city can come with its own set of hurdles, and opening a bank account in Dubai is often one of the first challenges newcomers face.

We at Unix, a renowned commercial brokerage company in Dubai, understand how crucial it is for foreigners to have a seamless transition. This article examines the many obstacles you can run into when creating a bank account in Dubai and provides practical advice on how to get through them. 

Challenges Faced While Opening a Bank Account in Dubai 

Understanding the Landscape of Banks

The fundamental difficulties in maintaining a strong and efficient financial system are highlighted by the UAE’s robust banking system, which imposes tight KYC and AML regulations to protect the financial system. However, creating accounts for foreigners may also be more difficult that’s why we have discussed some points which we need to consider –

• Documentation Requirements – Banks in Dubai typically require a comprehensive set of documents, including your passport, visa, Emirates ID (once obtained), proof of employment (usually an employment contract or letter), and proof of residence (rental agreement with Ejari registration).

• Credit History – The credit history is a reflection of how well you have previously handled debt. A bad credit history may cause you to pay more or restrict your alternatives. However, some banks offer accounts designed for people building credit.

• Employment Status – Some banks might inquire about your employment for various reasons, such as understanding your income stability or tailoring product offerings. Salaried employees typically find it easier to open accounts compared to freelancers or self-employed individuals. Banks might require additional documentation like salary slips or business registration documents for the latter.

• Minimum Balance Requirements – Several financial institutions have a certain balance requirement that you need to keep your account active. These can range from a few thousand dirhams to a significant sum, depending on the account type. 

• Limited Account Features – Starter accounts for expats may have limited features compared to those offered to UAE nationals like check writing, debit card transactions, or online bill pay. Explore different banks to find an account that caters to your specific needs, like online banking, debit cards, or international transfers.

Common Challenges Which Can Hinder Your Bank Account Opening in the UAE

1. Absence of an Actual Office – Banks in the UAE prioritize mitigating risk, and companies without a physical presence in the country can be seen as higher risk. This can be a challenge for startups or remotely operated businesses, as they may need to provide additional documentation or explanations to prove their legitimacy and future viability. 

2. The Shareholder’s Profile – Banks in the UAE are expected to undertake verification checks on their clients, which involves a thorough investigation of the company’s stockholders’ backgrounds and reputations. If someone’s shares have a history of financial troubles, financial difficulties, or criminal behavior, the account opening may be delayed or denied. 

3. Residents of the United Arab Emirates – Non-residents may face additional requirements and challenges compared to UAE residents when opening a bank account in Dubai. This can include extra documentation, such as proof of residency in their home country, or higher minimum balance requirements. Some banks may also require non-residents to have a local sponsor or establish a local presence before opening an account.

4. Trading with High-Risk Countries – When creating a new company bank account opening in UAE that trades with nations that are labeled high-risk for money laundering or terrorism funding,  it is crucial to exercise precaution. The UAE has strengthened its Anti-Money Laundering (AML) laws to mitigate these risks. The bank may request additional details about the nature of the business relationship, trade types, and the measures taken to mitigate money laundering risks.

Tips for a Smooth Experience

While the process may seem daunting when you decide to open a bank account in Dubai, here are some steps you can take to increase your chances of a smooth account opening experience –

• Research Banks – Start by researching the various banks operating in Dubai. Consider factors like their branch network, online banking capabilities, mobile app features, fees associated with different accounts, and minimum balance requirements.

• Prepare Documents – Gather all the required documents beforehand. Ensure they are valid, translated into Arabic if necessary, and properly attested (if required). The specific requirements can vary depending on the bank and the type of account you’re applying for, so it’s best to check with the bank directly to avoid any delays.

• Show a strong financial position – Banks may be more comfortable with applicants who can demonstrate a healthy financial status. This could involve showing proof of income, such as salary slips, employment contracts, or evidence of savings or investments.

• Visit the Bank in Person – While online applications have become more and more popular, visiting a bank location might be helpful. It is better to speak with a professional to clear up any questions you have regarding the application process, account choices, and customizing it to meet your needs.

• Maintain a Positive Relationship – Once you open an account, build a positive relationship with your bank. This can be helpful in the future when applying for credit cards, loans, or other financial items. There are certain ways to build a strong relationship including maintaining a good credit history by making timely payments and keeping your bank informed of any changes.

Unix: Your Partner in Dubai

We at Unix are aware of the difficulties foreigners encounter when relocating to Dubai. In addition to providing commercial brokerage services, we also help with relocation to ensure a seamless transfer. This contains instructions on finding appropriate housing, negotiating government processes, and creating a bank account.

Our team of experts can assist you in opening a bank account in Dubai, by comparing banks, completing the necessary paperwork, and even setting up meetings with bank employees for a seamless experience. With Unix by your side, you can focus on getting settled toward the new lifestyle in Dubai while we handle the procedures.