4 big banking issues affecting business setup in DubaiKWSME
The biggest hurdle new business owner’s face when setting up their businesses is difficulty in bank account opening. According to the new rules and regulations introduced by the government of the UAE, people opening corporate bank accounts have strict criterions to follow. This has caused difficulty for corporates to own accounts and have bank account issues.
Banking issues that affect business set ups
After the implementation of the strict guidelines, business set ups have had bank account issues.
Banks now conduct thorough checks
Due to the new regulations being introduced by the government of UAE, the international correspondent banks have tightened up their regulations. These banks provide services such as conducting business transactions and transfers on the behalf of other financial institutions.
Therefore, in order to avoid being charged with fines, banks make sure to thoroughly check accounts of their clients. However, the process of account checking is not an inexpensive process for the banks, so some banks may be non-compliant.
Regulation of offshore companies
Similarly, in the recent years, offshore companies have received negative views. This has caused the governments around the world to reestablish their regulations regarding offshore companies. Furthermore, entrepreneurs have been cautious of investing in such companies; so they can avoid getting involved in transgressions. Moreover, such issues have caused the banks and other financial institutions operating in the UAE to keep thorough checks on corporate bank accounts. Which also means the banks are not very keen on creating a huge clientele with new entrepreneurs.
Meeting new banking requirements is necessary
Banks have been making an effort to avoid international inquires on their activities, they have been rigid when dealing with bank transfers. After upgrading their guidelines, the banks have closed down companies with particular types of licenses as well as companies in some free zones. This is because these certain corporates did not meet the newly established requirements set by the banks.
These requirements include offshore companies to maintain a general trading company in mainland regions as well a warehouse. If the offshore company only produces activity in free zones, none of the UAE banks will allow the company to hold bank accounts.
The Common Reporting Standard
Another common banking issues faced by business set ups is due to the recent development that has brought CRS (Common Reporting Standard) to the UAE. The banks has been reluctant to providing the residential status to foreigners. CRS requires the involving parties to collect and exchange information from financial institutes in order to avoid tax evasion.
While the residents of UAE are exempted from having their information shared globally, people with work visa’s and foreign business owners can be asked for information by the banks whenever necessary. Therefore, banks have been making changes accordingly, to adapt to the new regulations.
Who can help you?
In order to set up a business, there are several factors business owners need to keep in mind. These factors include getting different kinds of approvals and registrations, providing the appropriate documents etc.
For new owners of business setup in Dubai , especially for foreigners, these tasks can be quite difficult to achieve. For example, acquiring work permits and visa processing can take a lot of time due to things like back ground and security checks being mandatory.
KWS Middle East is a consultancy that provides new business setup in Dubai owners with time efficient and inexpensive services for setting up their own businesses. The consultancy provides company formation UAE services that makes the process of acquiring visa and registrations easier. Similarly, with the help of KWS Middle East, bank account opening in the UAE has become a trouble-free process.
After the new regulations have been introduced, many companies have been affected in regards to banking. Strong relationships with banks is very important for businesses these days, in the UAE. KWS Middle East works closely with government and non-government departments for the business set up process. Therefore, it is the best choice for business owners looking to complete company formation UAE.
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