All about offshore bank account setup in Dubai
Setting up a bank account in Dubai means saving tax money, which you otherwise pay a lot in your home countries like Europe, the UK, and the USA. Instead of keeping a home country bank account, you can make the most of an offshore one in Dubai. Tax saving isn’t the only plus of this account; you have to enjoy many other advantages of opening this account in a UAE bank. Today, Prospr is unlocking a complete guide regarding offshore bank accounts in the UAE.
From getting to know the advantages of this account to its complete setup, we are here to offer you all the guidance and support you need. So, let’s embark on a journey to discover this account.
What is an offshore bank account?
It’s a bank account that individuals and companies residing outside the UAE open in the UAE. Let’s say you are a UK resident and open a bank account in Dubai. It’s your offshore bank account. Similarly, many companies outside the UAE open bank accounts in Dubai’s free zones because these economic zones allow companies to enjoy business-friendly rules alongside tax exemptions.
Benefits of opening an offshore bank account for company in Dubai
Here are some benefits a company can get by opening an offshore account in UAE:
Simplify international transaction
The biggest plus of this account is that it makes the whole international transaction process simpler and quicker. Once you open a bank account, you can easily send and receive money in multiple countries. If you are running a trading business, you can take advantage of this account.
Easier financial management
Offshore accounts help companies keep separate books and accounts from their domestic accounts. There won’t be any mixing, and as a result, financial management becomes simpler and easier for your financial managers.
Tax saving
More and more offshore companies are opening bank accounts in Dubai’s free zones because these accounts help them enjoy tax exemption. You can save tax money through them.A tax advisor can clarify tax implications for your situation. A lawyer can advise on legal aspects of opening an offshore account.
Must read: How to open a bank account in Dubai as a non-resident
Confidentiality
If your company seeks confidentiality and privacy regarding its financial activities, offshore banking is your best bet.
Stable economy
Dubai has become a business hub where the government is highly supportive of entrepreneurs and investors. Its stable economy and strong financial infrastructure build trust among companies that plan to safeguard their financial accounts. Financial safety is another benefit you can attain from this stable business hub.
How to open an offshore bank account UAE
Here are some steps you need to follow for opening this account:
Step 1-Select a bank
There are hundreds of national and international banks all over the UAE. You can pick a bank with a good financial history and customer reviews. Apart from reputation, the major factor to consider is the fee associated with accounts and eligibility criteria. You may need to spend some time on research, but always select a bank that facilitates your financial transactions in the best manner.
Step 2-Setup an offshore company
Before you open an account, the primary requirement is to set up an offshore company in the UAE. No worries, we’ve got you covered.
Here are some steps to form an offshore company in Dubai.
Step 3-Deal with KYC
KYC stands for Know Your Customer. Dubai banks strictly follow KYC regulations. Simply put, the bank will verify your identity, shareholders, partners, etc. That means you will provide them with all the documents that help them during the verification process. Here are some documents you need to prep for this purpose:
- Business plan
- Personal financial statements
- Business financial statements
- Proof of residency in the form of utility bills
- Passport copies of owners, directors, shareholders, etc.
- Authorized signature copies
- Notarized copies of company documents such as Memorandum of Association, Certificate of incorporation, Article of Association
The bank may ask for some additional documents to process your application.
Step 4-Apply for a bank account.
Once you have prepared all the required documents, the next step is to visit the bank you selected and fill out the account opening form. You can opt for an in-person meeting, which will allow you to handle critical matters correctly. Alternatively, you can apply online and attach all the required documents.
The bank will start a due diligence process where they will perform background checks and verify all the documents and identities.
Step 5-Deposit
Once your account is reviewed, the bank manager will contact you and require you to pay the minimum initial deposit, which varies from one bank to another. After this deposit, all the verification will be done, and your account will be activated.
How long does it take to open an offshore company bank account?
Well, the whole process may take a few weeks to some months, depending on the complexity of your case. If you have a complex company structure and face many difficulties opening your corporate bank account in the UAE, there is no need to handle it all alone. You can always consult with our expert. Book a consultation to expedite the process.
What should you do after opening an offshore bank account in the UAE?
Once you open an account, try to keep this account active. This means that you need to make frequent transactions to avoid being closed by the bank. Every bank has a specific definition of a “Dormant account.” You need to understand this requirement and keep your account active.
Rules and regulations change all over the UAE. You must check the latest news to stay up-to-date with the law and avoid non-compliance.
Although an offshore corporate bank account helps you save tax money, it may not completely shield you from taxes imposed on your company in your home country. It’s always a good idea to consult with a tax advisor in your country and understand every single aspect.
As we told you before, Dubai banks take KYC quite seriously, so they may occasionally require you to furnish some documents. Failure to meet their request will lead to closure. Many banks require documents to comply with Anti-Money Laundering (AML) regulations. So, try to cooperate with them on time to avoid legal actions and keep your account in good standing.
How much does it cost to open an offshore bank account in UAE?
You must pay a $950 fee to open an offshore bank account. You may be required to have a minimum deposit of around AED 50,000 for your offshore company. However, this amount can vary from one bank to another. Offshore bank account opening fees will be different for each account type. An account for international transactions costs you more than a basic current account. Get the latest information on fees, minimum deposits, and online application procedures directly from the bank you’re interested in
Can I open my offshore bank account online?
Yes, it’s possible to open an offshore Dubai bank account online. However, the bank may require you to visit the country in person or have a follow-up video meeting with them.
- Is an offshore banking account in Dubai legal?
Yes, opening an offshore bank account in Dubai is 100 percent legal as long as it is used to conduct legal activities. It’s not designed to support money laundering, though.
Can any company open an offshore bank account in Dubai?
If a company is doing business in the UAE, it’s not allowed to open an offshore account. This bank account is only designed for companies and individuals running businesses and companies outside the UAE.
Prospr’s experts are here to offer assistance regarding offshore banking in the UAE.
Whether you want to set up a business or an offshore company formation in Dubai or plan to get an offshore bank account in the UAE, Prospr’s business consultants are ready to offer you the utmost guidance and support. We understand the whole process of business setup as a foreigner is pretty challenging for you, but with our help, you can overcome this challenge quickly. Send us inquiries to hello@prosprplus.ae
