Opening a bank account can be a difficult process, if you have not arranged everything in advance. Carefully preparing required and supporting documents beforehand will help you to quickly and easily open a bank account for your company. In this chapter we will be sharing what you should start your preparation process with and which steps to take, before you submit all necessary documents to the bank.
The opening of a bank account begins with the choice of the bank itself. You may have your own preferences or you may stick to the recommendations of your friends, partners or service providers. Nevertheless, please bear in mind, that not all banks in the UAE work with SMEs, some of them do not open accounts for companies under the age of two and certain banks do not work with free zone companies, renting a flexi-desk facility.
Here it is also important to know that banks in the UAE do not open accounts on the basis of a power of attorney, even if the document is attested or legalized. As such, if you planned to give someone a power of attorney, there is an extremely high chance that the document would not be accepted. The only document that might be accepted is a board resolution, also duly attested, appointing a certain individual to open, close and operate the bank account on behalf of the company. Such document is often used, when you open a subsidiary in the UAE and the mother company needs to appoint the manager of the UAE company or CFO to manage corporate bank account of a newly established UAE company.
Additionally, if you are opening a bank account in the UAE, your personal presence is always required. Therefore, even if the company you own is registered remotely, you will still have to come to the bank for signing of relevant bank application forms.
After all the said aspects are considered and the choice of the UAE bank is made, follow the stages of preparing the necessary documents. We will be looking at the case, where you will be the owner, director and the manager of the UAE company.
The main document that will be required to be presented at the bank will be yours, shareholder's original passport. Should you be a non-resident of the UAE, you will have to state, where you live back at home and provide a proof of resident address. If you are a resident of the UAE, then you will be asked to show your resident visa, Emirates ID and tenancy contract. Bank will also request to share your CV.
In addition to the company owner's personal documents, shareholder will need to produce further two documents: a bank reference letter and a 3 to 6 months bank statement. Both documents must be original, translated into English (if they are in a different language), and stamped by translation agency or the notary. Some banks require both documents at the same time, others, just bank statement, without bank reference letter.
Finally, you will also need to share with the bank all original corporate documents of a newly established company, including your lease agreement and MOA and AOA.
You may wonder how the bank reviews your documents.
First of all, for the bank, it is necessary to understand the source of shareholder's income. In other words, where money for business set-up and operations comes from. Therefore, a mandatory requirement is to provide a bank statement from your personal account, where it should be displayed whether you receive a salary, dividends or have another source of income (say, you receive income from the apartment rent). If your bank statement does not prove that you hold sufficient funds for maintaining your business and you are unable to provide bank statements from additional accounts you may hold, where you also have funds, there is a high risk for your account opening application to be rejected. Same applies to the source of income. Even if you have sufficient funds but you are unable to clarify their source, there is again a high probability for rejection of your application.
Next, let's have a closer look at a CV issue. At first glance, it is not difficult to write a resume, however, some nuances need to be taken into account here. The resume should emphasize your professional experience and education. In conjunction with the resume your company profile shall be drafted.
The company profile is a document that describes the main activities of the company, plans for business development, provides a justification of how the existing professional experience of the founder specified in the resume is related to the choice of activities for the new company. The main goal of the profile is to show that the company will be active, the activities will coincide with those indicated on the company's license, and that the founder has the necessary experience or education. Therefore, it is necessary to take this document into consideration with special attention.
In the company profile, as a general rule, it is necessary to outline some specific details, among them: the name and address of the three companies that will be your customers, as well as the three companies that will be your suppliers, the planned turnover in the first year, as well as the way of depositing funds to cover the minimum balance. Minimum balance required by the bank can be paid in cash, if the amount is not too big, by bank transfer from the founder's personal account, or from the account of the founder's other business. Alternatively, funds can be paid under the first contract from the customer. In this case, it will be necessary to provide the contract, if the bank requests the same.
At the time, when you visit the bank to sign the documents for corporate account opening, it will also be necessary to determine which of the founders, if you have several, will be the account manager. So, all the founders can have the right to transact, or it can be just one of them. The account manager may also be a company's manager or another person appointed by a decision of the board of directors.
After all of the documents are submitted, the waiting period begins. Within a few days all your documents will go to the compliance department. Here, the bank will consider the source of your income according to the statement, conduct your background check, review the company's profile and shareholder's resume. In most cases, the department staff returns to you with additional questions or ask to provide some additional supporting documents. The account opening process generally takes longer for offshore companies and free zone companies with flexi-desk facilities, registered outside of Dubai and Abu Dhabi. It may take anywhere between 2 to 4 weeks for them. If you are a free zone company in Dubai or Abu Dhabi with a standard office or a local company, account opening process goes much faster and within 10 to 14 days you may have all the banking items with you.
If, as a business owner, you also wish to open a personal account, the procedure will be the same, except for the need to provide the company profile and statutory documents related to your company.
In general, your business account opening process is very straightforward, especially, if you prepare all the documents in advance and follow up regularly with the bank on account opening status. In this chapter, you have learnt, what you should know about corporate account opening. Next we will look at other aspects, you shall be also aware of as well.
If you want to know more about Dubai freezone company formation, feel free to get in touch with our professional consultant team and we would be delighted to assist you and help you to compare Dubai freezone company setup costs and help you to find that free zone, which would suit your business needs the most.
Disclaimer: Business Boutique UAE-Consultants.com is not affiliated with any particular government or legal entity. Business Boutique does not give professional legal advice nor any other professional advice subject to a public office in the government. This article merely sets out a simple and basic idea as to the reasons of Dubai freezone company setup and Dubai free zone company formation cost. Business Boutique in no way holds nor imposes any official governmental or legal authority and the article herein is only to be taken as a guide. All further governmental or legal issues should be addressed to the corresponding authorities.
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