Publication
UAE banking system: How local and digital banks work
Antwort Law's Dubai office continues to celebrate its second anniversary, and we are once again sharing with you useful information about doing business in the UAE.
Today we will talk about working with banks in the Emirates, which are relevant for any business. You will be able to find out general recommendations and the work of specific banks in the UAE.
We remind you that you can use the services of Antwort Law in Dubai with a 20% discount from 1.06.2024 to 1.07.2024.
AML legislation in the UAE and Compliance
Banking activities in the UAE are subject to anti-money laundering (AML) legislation. The implementation of this legislation ensures transparency of financial transactions and protects the banking system from illicit financial flows. Recently, banks in the Emirates have significantly strengthened their checks and compliance procedures when opening accounts.
Basic compliance requirements in UAE banks:
- Identification of Customers (KYC): Customers must provide detailed information about themselves and their activities, including documents confirming their identity and place of residence.
- Business reputation: It is necessary to provide information about the business reputation of the company, confirmation of the legality of the business and sources of financing.
- Financial Statements: Banks may require financial statements and other documents to support the company's financial activities.
- Transaction Monitoring: Continuous monitoring of financial transactions to identify suspicious transactions.
These requirements can be complex for businesses, but our team will help you navigate through the necessary steps and ensure compliance with current requirements.
Lack of payment systems such as PayPal and Payoneer
It is worth noting that in the Emirates there are no payment systems such as PayPal and Payoneer, which are common in Europe, the UK or the USA. There are traditional banks and digital banks with the same license as traditional ones. The operating principle of these banks is no different from traditional institutions, but they operate without physical offices, providing services remotely.
Wio Bank is the closest thing to a digital bank in the “classical” sense. It offers simple compliance procedures, but still requires confirmation of the business plan, office, employees and customer agreements, like traditional banks. The main difference is the absence of a physical office - all transactions are carried out through email, help desk and WhatsApp. Wio Bank is suitable for small and medium-sized businesses with payments up to two to three million dirhams, but is not suitable for trading and large enterprises involved in the trading of gold, metals or agricultural products.
Liv Bank is also close to digital banks, but its requirements for clients remain similar to traditional banks. This bank also needs to go through all compliance procedures and confirm the legality of the business.
Traditional banks
For smooth operation, we recommend choosing traditional banks, especially groups of Islamic banks such as Emirates Islamic Bank. Compliance requirements at traditional banks are similar, but may differ depending on the specific compliance officers reviewing your documents.
Lately we have been receiving many requests from companies operating in the CIS countries. Such businesses need to be especially careful, as UAE banks may carry out extensive compliance audits, for which it is very useful to involve qualified advisers.
The Antwort Law team has significant experience in this and will be able to help you with banking services in the UAE - from opening accounts to unblocking them. We provide customer service for banks, communicate directly with bankers and ensure quick and professional resolution of all issues.
If you need help dealing with banks in the Emirates, contact Antwort Law. We will provide professional support and help you successfully conduct business in this country.
For consultations and services, contact us through the website or contact phone number. Thank you for your trust!
Olena Deilid
Junior Legal Secretary
FAQ
What are the main changes in UAE banking legislation?
One of the key aspects of banking in the UAE is Anti-Money Laundering (AML) legislation. This led to a significant strengthening of checks and compliance procedures when opening accounts. Our team can help you through all the necessary steps and ensure compliance.
Are there payment systems in the Emirates?
No, there are no payment systems such as PayPal and Payoneer in the Emirates. There are traditional banks and digital banks with the same license as traditional banks. They operate without physical offices, providing services remotely.
Which banks to choose for business in the UAE?
For smooth operations, we recommend choosing traditional banks, especially Islamic banking groups such as Emirates Islamic Bank. The compliance requirements of all banks are similar, but may differ depending on the compliance officers who review your documents. We can also help with opening accounts in digital banks such as Wio Bank and Liv Bank.