When opening a company bank account in the UAE, it is important to first outline the corporate structuring of the business, which will ultimately help to determine the necessary documentation and aid the processes requirements.

What is a corporate structure?

A corporate structure refers to the arrangement of different roles, responsibilities, and authority within an organisation that defines how the business operates, makes decisions, and is governed. It outlines the hierarchy of ownership, management, and operational roles, typically reflecting how the business is divided between various stakeholders such as shareholders, directors, and employees.

What are corporate structures in the UAE?

A common query is whether corporate structures in the UAE are similar to those in Europe, USA, or India. Often, entrepreneurs with international business experience compare corporate structures from other regions to the UAE. However, every jurisdiction has unique regulations, and the UAE is no exception.

Here is an overview of a general corporate structure in the UAE:

• Shareholders
• Directors
• Managers

It is important to understand the varying requirements across the different registration authorities in the UAE.

How to establish the corporate structure when setting up a company?

At the time of company formation, the corporate structure must be outlined in the application, with the appointment of the key roles; Shareholders; Directors; and Managers. The position of a company secretary in the corporate framework is optional.

The hierarchical structure of the business is that the Shareholders can appoint or dismiss directors, and the Directors have authority over the Managers.

The role of each position must be discussed and outlined in detail in the application.

Why is corporate structure important?

1. Proper Governance: This ensures that the company is managed effectively and adheres to legal and ethical guidelines.
2. Maximise Efficiency: A clear structure helps streamline decision-making and operational processes.
3. Ensures Accountability: Defining clear roles and responsibilities, ensures accountability at every level.
4. Planned Scalability: A well-designed corporate structure allows the company to grow efficiently and adapt to changes.

What do you need to open a business bank account in the UAE?

To open a business bank account in UAE, you need following documents:

• A valid trade license and any other company documents
• Passport copies of the company’s Directors
• Proof of the company address
• Parent and other layered companies company formation documents
• Tenancy or utility bill of a signatory in UAE within last 3 months
• 6-months bank statement of the parent company
• Proposed company major buyers/suppliers name and their country of jurisdiction
• A few recent invoices of sales and purchase as per the provided bank statement
• Company monthly and yearly turnover. Along with a cash percentage of the overall business
• A Directors Board resolution authorising the account opening

Applicants must also complete any additional specific forms required by the bank.

What are the conditions for opening a corporate bank account?

• Having a registered business with a valid license issued by the local authorities
• A physical address for the company within the UAE
• All company structure documents
• Required documents of the General Manager (who has authorised Power of Attorney for banking rights)
• Meeting the bank’s minimum deposit requirements

Additional documents can we required depending on the country where a parent and other structured companies are based.

Why is company bank account opening assistance important for international companies in the UAE?

1. Complexity of the Process:

Banks in the UAE have stringent regulatory and compliance requirements, which can make the corporate bank account opening process time-consuming and complex. In addition to meeting the bank’s minimum deposit requirements, the documentation needed is often extensive and varies depending on the company’s structure, the industry, and the bank’s specific requirements. For companies with complicated structures (e.g., multiple shareholders, subsidiaries, or holding companies), the process becomes even more intricate.

2. Compliance Requirements:

The UAE banking system places heavy emphasis on compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. Failure to meet compliance standards can result in delays or rejection of the bank account application. All companies are required to meet the bank’s minimum deposit requirements, and corporate entities with international operations often need to provide additional documentation, such as:

• Legalised corporate documents
• Proof of business activity
• Detailed financial statements

3. Navigating Local Banking Norms:

The UAE has unique banking norms and procedures that may be unfamiliar to foreign companies. Local expertise is often required to understand and adhere to these procedures, which may differ significantly from banking practices in other countries. The assistance of local, experienced professionals ensures that companies avoid common pitfalls during the application process.

4. Streamlining Documentation Preparation:

Opening a bank account in the UAE requires the submission of several legal documents, including:

• Memorandum of Association (MOA)
• Shareholder agreements
• Certificates of Incorporation
• Proof of business activity and ownership

Professional assistance ensures that all required documents are prepared, legalized, and submitted correctly, minimizing the risk of errors or omissions.

5. Minimising Time and Bureaucratic Delays:

The bank account opening process can take several weeks or even months, especially for layered corporate structures. An expert’s assistance helps to expedite the process by managing interactions with the bank, ensuring that applications are completed properly and that all follow-up actions are taken promptly. This allows businesses to focus on their core activities rather than getting slowed down by administrative procedures.

6. Addressing Special Requirements for Layered Corporate Structures:

Companies with complicated structures, such as multinational subsidiaries or holding companies, often face additional scrutiny from banks. Assistance services ensure that all necessary approvals, documents, and legalisations for the parent company or other entities involved in the corporate structure are properly managed. This reduces the likelihood of delays due to insufficient or incorrect documentation.

7. Avoiding Common Application Rejections:

Many businesses experience rejection of their bank account applications due to incomplete or incorrect information. Bank account opening assistance services help avoid these rejections by ensuring that all documentation is in order and that the application aligns with the bank’s specific criteria.

How Can Sovereign PPG Help?

Setting up a company bank account in the UAE involves crucial steps such as identifying all the necessary components of the company structure and then collating the required documentation for proper application submission. This process is very complex, and so it is advisable to seek professional assistance to manage these steps effectively.

At Sovereign PPG, we specialise in assisting businesses open a bank account in the UAE. Our team will guide you through the nuances of determining the requirements of your company, ensuring all the requirements are met, and navigating the specific submission process. We help streamline the process from identification of requirements, collation, to final submission, ensuring you meet all regulatory standards to successfully open a bank account.

If you need assistance with this or with any other related company setup, restructuring, local partner or PRO support matter in Dubai, Abu Dhabi, the wider UAE, Saudi Arabia, Bahrain, Qatar, or Oman, then please do get in touch with us on +971 (0)4 456 1761 for Dubai, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.