When operating the business in the UAE, it is crucial how fast and convenient payments between your clients and partners will be arranged. To make the transactions process smooth some experts recommend setting up only one corporate bank account for your business in Dubai, while others advocate opening an alternative corporate account.
If your business has been already registered in the UAE, but you operate it with only one corporate bank account, consider applying for the second one for the following reasons:
1. Risk of inaccessibility of your corporate funds
It can be an unpleasant surprise to find out that your business bank account is frozen. When a bank freezes your account, you still have limited access to it and ability to check your past transactions. However, you are not able to receive or transfer money until the issue that caused the account to be frozen is resolved. As we mentioned above one of the main factors of any successful business, is how fast and efficiently you operate. In the business world, time is as scarce as money.
After waiting for the frozen account to be cleared by bank, you can lose some hefty business. To clear the frozen business bank account in the UAE it will be necessary to review the reason by proving documents and handing in the final decision to clear the issue that on its own takes several days. The worst part is if the authorized signature is out of town for an important business and the accountant did a minor mistake with the narration or communication with your RM, you might find your business in a twist for some time, without being mentioned the extra expenses for rescheduling flights on urgent basis.
If your client has a bank account in Dubai they will surely prefer to do immediate and completely free of charge payment out of the mobile application which is in one click away. Either, your foreign clients or suppliers have accounts in International Banks, prefer to receive or transfer to your corporate bank account in the UAE from The International Bank. Another reason can be just separating some clients and suppliers in terms of grouping into different segments.
Keep in mind that if you have your UAE bank account in the same bank of your clients, receiving their payment is instant. Not couple of working days, not couple of hours, not even couple of minutes. Internal bank transfers are instantly credited.
3. Multiple perks received.
While you may desire a bank with an ATM near your home or workplace, online banks often offer better interest rates, banks providing better rates for Letter of Credit (LCs), Issuance of Letters of Guarantee (LG), or even better, rates for currency exchange have more interesting loan rates for your business growth. Moreover, if the majority of your employees have their salary account in a certain bank, transferring their salaries on a monthly basis to them from the same bank will not cost you any service fees. You may be able to take advantage of perks from two banks if you have a corporate bank account in two UAE Bank Facilities.
You can try out local as well as international banks to gauge their levels of service and keep you in the safe zone.
This is an ultimate one. Like any successful entrepreneurs, you want to always keep your financial funds intact. Or one can quote Buffet’s mantra: Do not put all eggs in one basket.
Despite the various advantages, there are several reasons you may want to keep only one business bank account rather having multiple corporate bank account in Dubai:
1. It can be difficult to reach Minimum Balance Requirements.
Banks in the UAE require maintaining a monthly minimum or monthly average balance on the corporate bank accounts. The amount starts minimally from AED 50,000. If you are a startup business it might be challenging to keep the minimum maintaining balance for each UAE Corporate Bank Account.
2. You Could Pay Higher Fees with Two UAE Corporate Bank Accounts.
All the UAE banks charge fees for their accounts, even accounts with low credit score. Make sure you are not overspending by having two corporate accounts.
3. Constructing Banking Relationships Can Be Sedulous.
As we know most of the UAE Corporate Bank accounts have their own Relationship Manager. Having two corporate bank accounts states you will amass two Relationship Manager from two different banks. You may find it unyielding to preserve the congenial relationship at the same time with two different Relationship Managers.
4. You Could Lose Interest.
Some UAE banks pay a high interest for a larger corporate bank account balance. Spreading your funds into two corporate accounts may halt you from earning the highest rate.
5. You May Find It Blurring.
Having two Corporate Bank Accounts in Dubai implies having separate online banking on your devices, two token devices and two numbers to which you will receive OTP Code. You may find it perplexing to manage.
If you are really organized and prefer to keep your funds safely by spreading it within alternative Dubai bank accounts, you may be a good candidate to have at least two business accounts in the UAE. And you are interested to play safe but not sure which bank to be an alternative for your business, please contact us:
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