Bank Account Opening for Non-Residents 

Non-residents may face additional KYC procedures while trying to open a bank account in Dubai or UAE. Such bank accounts are reportable to the jurisdictions of the owners’ tax residency and take more time for processing. Other restrictions include limited bank facilities, limited online banking facilities, and the non-availability of credit or debit cards. Non-resident investors who avail of corporate bank opening services in Dubai will get advice on navigating such challenges.

UAE Offshore Bank Accounts 

A bank account outside a person’s home country is usually termed an offshore bank account. Both individual investors and legal persons are allowed to open offshore bank accounts in Dubai, UAE. Offshore bank accounts offer great legal and financial advantages to the account holders.

An offshore bank account offers the following benefits:

• Convenience
• Wealth management services
• Quick money management
• Easy transfer of international payments
• Flexibility to use multiple currencies

Impact of AML-CFT Laws on Bank Account Opening Process 

Before the introduction of AML-CFT laws, the UAE used to be less regulated. Businessmen had no difficulty receiving money by cash or by bank transfer from anonymous sources outside of the UAE. The UAE’s less regulated financial landscape eventually put the country under the radar of global financial watchdogs such as the Financial Action Task Force (FATF).

The country introduced the AML-CFT laws in 2019 to align its financial regime in line with global standards. As a result, every money transfer needs to be validated by the invoice or the transfer should be from an approved customer. Even though it’s good for economic transparency, the AML-CFT compliance requirements put the banks under immense pressure. The banks increased the KYC requirements to ensure AML compliance. Investors can tackle the KYC challenges by availing of bank account opening services in Dubai.

Key Due Diligence Challenges for UAE Bank Account Opening Process 

After the implementation of the AML law in the UAE, the banks began to exercise due diligence on new clients as well as existing account holders. New KYC forms were introduced which ask the customers if they are dealing with high-risk countries, high-risk individuals, risky business activities, etc.

The following is a list of KYC requirements made tough by the introduction of the AML/ CFT Law in the UAE.

1. Background history of the shareholders

The UAE banks nowadays scrutinise the financial background and history of the business owner and shareholders. As a result, investors are now required to demonstrate to the banks that they have adequate knowledge about the industry associated with their business. The banks will also check the creditworthiness and history of the owner or the company. Most banks in Dubai also request the physical presence of the investors to sign the documents.

2. Residency Visas

Investors holding UAE residency visas may undergo a less stringent due diligence process compared to non-resident applicants. Investors with no UAE residence visas will be subjected to higher KYC requirements, which may delay the processing of the application. The banks will check the risks associated with the applicant’s nationality, business activities etc. Providers of bank account opening services in Dubai can help investors to expedite the process.

3. Address of Physical Office

Investors will be required to submit proof of the address of the company’s physical office in the UAE. Some banks may even send an official to physically verify the address of the company. They need assurance that the address mentioned in the KYC form is not bogus.

4. High-risk business activities

Investors carrying out high-risk business activities may undergo tough due diligence measures. As per the AML-CFT rules, the banks must scrutinise activities that may be used as an accessory for money laundering. Some of the high-risk activities are insolvency services, investment business, trust and company services, aggressive tax schemes, real estate management, payroll services, consultancy services, or any activity that hides the real beneficiary owner’s identity.

5. Business with High-Risk Countries

Investors from high-risk countries or companies that have business dealings with high-risk countries may be subjected to increased due diligence processes. The FATF periodically releases a list of countries that it monitors for AML-CFT deficiencies. As per the latest list on June 2021, countries that show AML-CFT deficiencies include Albania, Barbados, Botswana, Cambodia, Cayman Islands, Ghana, Jamaica, Mauritius, Morocco, Myanmar, Nicaragua, Pakistan, Panama, Uganda, and Zimbabwe. Iran and North Korea are listed under ‘Call for Action’ in the FATF list.

6. Politically Exposed Persons

Banks will start intense Enhanced Due Diligence (EDD) measures if the customer is a Politically Exposed Person (PEP). The EDD measures will be applied even if the customer is a family member or a close relative of a PEP. Similarly, customers having close business associations with a PEP will also be considered as high-risk. As per UAE’s Cabinet Decision No. (10) of 2019, a PEP can be Heads of States or Governments, senior politicians, senior government officials, judicial or military officials, senior executive managers of state-owned corporations, and senior officials of political parties and persons who are or have previously been, entrusted with the management of an international organisation or any prominent function within such an organisation.

Associate with Providers of Bank Account Opening Services in Dubai, UAE 

Opening a bank account in Dubai, UAE is an unavoidable necessity for investors to carry out business transactions. However, the process of bank account opening in the UAE may appear to be challenging for business organisations in the wake of AML-CFT laws. Fortunately, providers of corporate bank account opening services in Dubai can help investors navigate the challenges. Jitendra Business Consultants (JBC) is a business setup advising firm offering assistance in bank account opening in the UAE.

JBC can assess the risk factor associated with each application and advise the necessary course of action. JBC can help the investors with services including an introduction to the relationship manager, preparation of documents, follow-up on bank account opening etc.