Business Accounts

Every business requires a system for managing its funds. The business account is used for tracking the money to be paid to the creditors, the cash balance, the funds owed to the business, and the payroll to be paid to the employees.

The business accounts are different from personal or private bank accounts because they are especially for businesses.

This bank account helps the owner of the business to keep the transactions of the business separate from the personal finances. This account generally accompanies special conditions for their business.

While selecting suitable business bank accounts for any company, it is advisable that the business owner opts for the one offering good rates of interest/profit rate and low charges.

Why Should You Get a Business Account?

The benefits of having a separate business account in UAE for an organization can be clearly seen. Following are the reasons why a business owner should get this bank account.

Tracking Expenses

This type of bank account assists the owners of any business in tracking their expenses. This way, they are aware of the expenses they are making. This, in turn, helps them in managing these expenses as per the financial situation and requirement of the business.

Cash Flow

Since the business owners stay aware of the income and expenses through this bank account, it makes it easy for them to manage the cash flows.

Calculating the Tax

With the business account, it becomes easier for organizations to calculate their tax liabilities. It helps in keeping transparency in the payment of tax.

Business Loan

Having a corporate account can be beneficial if the business owner wishes to take out a loan for their business or obtain a business credit card.

Card Payments

This bank account helps the organization in taking card payments through their customers.

For Professionalism

The organization with a dedicated business account may make it look more professional, as the clients may prefer making payments to an account that is on the name of the business rather than the owner. A lot of clients are not comfortable in making payments into a non-business account.

Accurate Book-keeping

Imagine what could happen to the bank statement and cheque book in case the personal and business transactions are mixed. After a year, the organization may have to suffer during the payment of income tax if the business and personal finances are mixed. If there is a business account for the transactions of the organization, there will be a clean record for giving to the accountant at the year-end. 

Features and Benefits of Business Account

After a business starts spending or accepting funds, it should get this type of bank account opened. Regular business accounts include savings account, checking account, merchant services account, and credit card account.

A lot of business accounts offer incentives, which are available on a common personal account. Following are a few eminent features & benefits of a business account in UAE.

Protection

The business-related banking provides limited protection on personal liability by keeping the personal funds and business funds separate. The merchant services offer the customers of the business with the purchase protection making sure their personal data is safe.

Professionalism

The clients or customers of the business may have the ability to make payments using credit cards and drawing cheques out to the business rather than to the business owner. Moreover, the organization can authorize the employees in handling regular banking tasks on its behalf.

Purchasing Power

The credit card accounts may help the business in making huge start-up purchases and assisting in establishing a credit score for the business.

Preparedness

The business-related banking generally comes with an option of the line of credit in favor of the organization. This may be useful in case of an emergency or when the organization requires new equipment.

Minimum Account Balance

A lot of banks in the UAE offer low to zero balance business account in UAE to the organizations making it easier to manage the money flow.

Interest Rate

The banks in the UAE offer competitive rates of interest or profit rate (in the case of Islamic Banks) on their business accounts making it beneficial for the organizations.

Cheque Book Facility

The banks provide the facility of free cheque books to the organizations on these bank accounts.

Online Access

The business owners can manage the business bank accounts online through the user-friendly online banking portal of the bank no matter where they are.

International Remittance

The banks offer the facility of making international remittance on the business account, making it easy for the organization to transfer funds.  

Multiple Currency

Apart from the UAE dirhams, this bank account can be opened in various other major currencies across the globe.

Best Banks for Business Accounts in UAE

Here are some best bank for business account.

Bank Name Minimum Deposit (in AED) Main Features
Dubai Islamic Bank 50,000
  • Unlimited cheque and cash withdrawals
  • Facility of cheque book
  • Easy accessibility with a wide network of 90 branches in the UAE
Abu Dhabi Islamic Bank 5,000
  • Banking Assistance
  • Debit card free
  • Facility of cheque book
  • Multiple Currency options available
  • Online Banking available
Mashreq Bank 50,000
  • Facility of cheque book
  • Debit card free
  • Online banking available
  • Multiple Currency options available
  • Business loan can be availed
RAK Bank 25,000
  • Facility of cheque book
  • Account statement on a monthly basis
  • Multiple Currency options available
  • Competitive rate of interest
Commercial Bank of Dubai N/A
  • No fees on maintenance
  • Multiple Currency options available
  • Facility of cheque book
  • Debit card free
  • Attractive rates
  • E-statement free

Eligibility Criteria and Documents Required to Open a Business Accounts in UAE

For opening one of the best business bank account in the UAE, the organization has to fulfill certain eligibility requirements as determined by the concerned bank. Each bank has its own eligibility requirements. Here are a few of these requirements.

Minimum average balance

The organization will have to maintain a certain minimum amount as the monthly average balance on this bank account. 

Savings or Current Account

Some of the banks require the organization to have a savings or current account with them, in order to be eligible to open a business account.

Note: The applicant organization may have to fulfill more of such eligibility criteria apart from the ones mentioned above (according to the sole discretion of the bank concerned.

The table below has a rundown on the required documents for opening this type of bank account.

Category Documents
Identity and Address Proof
  • Shareholder representative’s Emirates ID card (copy)
  • Shareholder representative and company director’s valid passport (copy)
  • Residence Visa of shareholder representative
Documents Related to Business
  • Sources of fund disclosure
  • Business plan
  • Articles and memorandum
  • Incorporation certificate
  • Registry of shareholders
  • Good standing certificate
  • Company extract (through the official registry of the company)
  • Existing contracts
Other Documents
  • Letter of reference through the business partners
  • Information related to the kind of activities to be performed on the account


Note:
The applicant organization may have to submit more of such documents for opening a business bank account apart from the ones mentioned above (according to the sole discretion of the bank concerned.

Frequently Asked Questions on Business Account

Question 1: What are the types of corporate entities existing in the UAE?

Answer: Under the law of the UAE, 5 pathways for corporate establishment can be applied for foreign companies that have an interest in making a formal place in the Emirates.

  • Create a permanent setup
  • Establish branch office
  • Form an organization in any of the free zones in the UAE
  • Create a civil company
  • Enter in an agreement with a commercial agency

According to the Law of Commercial Companies in the UAE, the organization that has been incorporated in any of the Emirate, should have one UAE national as a partner (minimum) who has at least 51 percent of the capital of the company.

However, a few businesses might be exempted from this law. These businesses include the ones in the industry of gas and oil, gas and electricity producing companies, and entities working on water distribution and treatment. 

Question 2: Is a foreign entity allowed to open a business account in the UAE?

Answer: Yes, a foreign entity is allowed to open this type of bank account in the UAE. The incorporation of an establishment in the UAE is usually an easier and cost-effective solution.

Question 3: After the incorporation or certification, what is the process of opening a corporate account in the UAE?

Answer: The requirements for opening any bank account in the UAE may vary from one bank to another. However, the presence of a major director or shareholder is usually required. It may sometimes happen that the attorney may set up accounts on the behalf of their clients, though this is not a common practice.

For opening a business account in UAE, following are the steps to be followed.

  • Complete an application for account opening along with the detailed records of the organization including the business proof such as invoices and contracts and information related to the suppliers and clients.
  • The concerned bank then gathers information on the background of the management team of the applicant company, including its directors and shareholders. This process will also include financial projections.
  • The bank then conducts an interview with the applicant company. After all these stages are complete, the bank account will be opened.

Question 4: I have a sole proprietorship. Is a business account required for my firm?

Answer: Being a sole proprietor, legally you do not need to have this bank account. As per law, you are free to make use of your personal account for transactions that are business as well as non-business.  However, opening a corporate account has its own advantage. It helps in keeping your income and expenses in check and makes your business look professional.

Question 5: I own a limited company. Am I required to open a business account?

Answer: If you own a limited company, you must have a dedicated bank account for the business because your business is a separate legal entity.

Question 6: When would I need a business/corporate account?

Answer: If you do not have a bank account on the name of your business, you might have to set up one to meet the needs of your growing business.

For instance,

  • When planning to establish a limited company
  • When the business process excessive transactions
  • When business expenses and incomes get complicated and your concern is to complete your tax return
  • When you wish to get a credit card or a loan for your business
  • When you have to receive card payments from your clients or customers

Question 7: What are the advantages of having a separate bank account for your business?

Answer: The benefits of having one of the best business bank account in the UAE can be seen clearly. These benefits include the tracking of the expenses of the business, easy calculation of the tax liabilities, and management of cash flow.

Question 8: Can I open my corporate account in any currency other than AED?

Answer: Yes, a lot of banks in the UAE allow you to open a corporate account in various major currencies of the world other than the UAE dirhams.