Steve Henderson | 10 Sep, 2012
Thinking of starting a new business in the United Arab Emirates? If so, you're already aware that it's a reasonably absorbing process. A key part to this procedure will be setting up and effectively managing a business banking account. Read on for a quick look at what to expect from setting up an account and how online banking is a great way to organize your company's finances.
For over 30 years the regulatory establishment has been the United Arab Emirates Central Bank. There are over 47 commercial banks that operate in the region, with 27 of them being under foreign management. Most banks offer savings and deposit accounts as well as loans and credit cards. Online banking is also available, allowing you to conveniently transfer money, pay bills and check balances at the click of a button.
Business bank accounts from HSBC and many others offer numerous online banking benefits. In addition to instantly viewing past account and credit card transactions, you'll also have access to the principal amount, maturity date and interest details on all fixed deposits. Online business banking also allows you to obtain any loan account details including installment dates, consolidation status and interest rates. Internet banking also makes it easy to stay on top of prevailing exchange rates of major currencies.
Setting up an account with a UAE bank requires you have a residence visa or a residency application in the works. You will also need to have your original passport, copies of your visa and personal details from that passport and a No Objections Certificate (NOC) from a sponsor. Be sure to investigate the details of your account as some banks insist that your business banking ledger maintains a minimum balance. This can range anywhere from 2,000 dirhams for a deposit account to almost 10,000 dirhams for a checking account.
Once you're settled, you'll be able to set up various transactions of routine business related expenses like energy bills or equipment registrations. Many banks have partnered with the UAE government and offer online payment options, most often for free or a nominal fee. There are more than 25 service providers in the region with 140 online services. This can be especially helpful when wanting to avoid the congestion of municipal offices you may need to deal with for getting your business underway, particularly for land appraisal, vehicle permits or building fees.
International banks in UAE usually insist upon margins but luckily there is solid financial support for import and export operations through commercial banks. These rates, along with any additional resources that may be available for business assistance, can also be monitored through online banking.
The UAE dirham is unrestrictedly exchangeable and is directly connected to the US dollar, the legal tender that has been used to quantify oil prices. The UAE has no exchange controls and has kept a steady exchange rate since 1977 at US $1 = Dh 3.675. The UAE Central Bank monitors all transfers and are required to report exchanges above a particular amount. Bear in mind that any international transfer you make exceeding 2,000 dirham might require that you show a current passport.
(Useful resources: HSBC Business Banking Services)
* The author of this article is a London-based freelance writer.
* The views expressed by the author in this article are his/ her own and do not necessarily reflect the views of SME Times.