Banks in the UAE

Banks in the Emirates: key features and advantages

The UAE is the largest financial and business hub in the Middle East. Banks in the Emirates fall into three categories:

• at the core of the banking system is the Central Bank of the UAE, which oversees other financial institutions and controls and regulates their activity;
• the country also has national banks;
• in addition, representative offices of many international financial institutions operate in the UAE.

Arab banks operating in accordance with Sharia principles deserve separate mention. They are also known as Islamic banks. Islamic banks do not work with citizens of Russia, North Korea, Nigeria, and Iran.

Banks operating in the UAE are generally quite accommodating toward the country's foreign residents, for the following reasons:

• no significant restrictions on the movement of funds;
• favorable terms on loans and other banking products;
• free servicing - though this is not available at every institution.

KYC policy: what is it?

The abbreviation KYC stands for "Know Your Client." It is one of the basic principles that banks in the Emirates operate by. The UAE Central Bank keeps a close watch to make sure this principle is not violated.

The purpose of KYC policy is a thorough review of a client's personal data. That's why bank managers request a large number of documents and may send follow-up requests. Any changes to personal data must be reported promptly so the bank can update the information it holds on the client.

The main documents an individual must provide:

• passport (original and copy)
• Emirates ID - an identity document that everyone residing in the UAE must have;
• a document confirming residence in the Emirates - a utility bill.

A legal entity will need to provide the visas and Emirates IDs of directors and shareholders holding more than 5% of the company's shares, documents confirming an operating address in the UAE, incorporation documents, a board resolution to open the account, a certificate of registration or trade license, and a list of persons authorized to access the account and carry out financial transactions.

What fees can a UAE bank charge?

A UAE bank may charge various fees and commissions. These typically include a fee:

• for falling below the minimum balance - each financial institution independently sets the minimum amount that must be maintained in the account, and if the balance falls below this threshold, the client may be fined;
• for foreign purchases.

Regular commissions apply to certain transactions, such as currency exchange. If you exchange currency often, it's worth paying attention to ATMs, where the rate can be more favorable than at exchange bureaus.

How does an individual open an account at a UAE bank?

A non-resident of the UAE - that is, someone without a residence visa and Emirates ID - can only open a savings account. However, many banks allow credit and debit cards to be issued, but only if a certain sum is placed on deposit. To open an account you need:

• an identity document;
• a visa;
• a document confirming residence in the UAE;
• an employment contract or certificate confirming a legal source of income;
• a bank statement for the last 6 months.

A foreigner who is a resident has more options. Since October 3, 2023, it has been possible to obtain a Golden Visa for UAE residents, valid for 10 years. This requires buying property in the Emirates worth at least $545,000.

A resident has the right to:

• open current and savings accounts;
• use a checkbook;
• take out loans;
• use other banking services, such as sending and receiving international money transfers.

To open an account you need:

• a passport;
• Emirates ID;
• a resident visa;
• documents confirming residence in the Emirates.

An account is opened within 2-3 business days if no additional checks are required. For Russian citizens the time may be longer, since UAE financial authorities scrutinize them particularly closely in case they are attempting to bypass US and other countries' economic sanctions in any way. If a resident confirms an official monthly income of at least 5,000 dirhams with supporting documents, the financial institution may open the account remotely.

What should you know about the cost of banking services in the UAE?

Each bank independently sets its service fees. Some institutions provide services free of charge, but this usually requires maintaining a minimum account balance. Most also apply penalties if the account balance falls below the level set by the bank's rules.

Closing an account is a paid service in most cases.

In the UAE, writing a check without sufficient funds in the account carries criminal liability.

TOP banks in Dubai

In 2023, three UAE financial institutions made Forbes magazine's ranking of the world's best banks: Emirates NBD in Dubai, as well as Abu Dhabi Commercial Bank and First Abu Dhabi Bank in Abu Dhabi.

So if you want the most reputable financial institution serving you in Dubai, turn to Emirates NBD.

Other banks operating in Dubai that are considered among the most reliable:

• Rakbank - one of the country's oldest financial institutions, operating since 1976;
• Mashreq - also among the oldest players in the UAE banking sector, operating since 1967;
• Banque Misr - its shares are fully owned by the Egyptian government, and it is especially well suited to those who frequently transfer money between the UAE and Egypt.