Simply put, offshore banking refers to financial operations made from locations other than your home country. Some of the frequent reasons for choosing offshore banking facilities are the need for multi currency loans or tax savings. However, different people and business account holders have different motives for doing so.
Offshore banking has become increasingly important in recent years due to the fact that it offers flexible transactions, which is a requirement of these offshore bank accounts, and makes it easier to manage your international financial commitments. With the establishment of the Dubai International Financial Center, or DIFC, which permits free trade in Dubai, which has recently developed a significant business plan.
Thus today Dhanguard will discuss the opening of the Offshore Business Account in the UAE. So let’s get started!
What is an Offshore Business Account in the UAE?
Offshore Business Account is a kind of bank account which is owned by an overseas company and operated by a particular bank in the UAE. Majorly the offshore companies opt for an offshore business account to moderate and incur their business transactions as well as make use of all other amenities provided by the bank as a part of daily banking procedures. Offshore business accounts often provide a wide range of benefits to the account holder. That's why it is highly recommended to an offshore company to use an offshore business account in the UAE.
You can be rest assured that our team of experts will guide you at every step during the initiation of your business account. With a wide variety of services provided, Dhanguard also assists in opening Mainland as well as Freezone Business Accounts in UAE, making the procedure easier and cost effective.
What are the Documents required to open an Offshore Business Account in the UAE?
We advise applying to 2 to 3 different banks if your company is registered in the UAE and you are getting ready to open a business bank account, to ensure that at least 1 to 2 of them will accept your application.
It's necessary for you to furnish the below mentioned documents to get your offshore business account-
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A legitimate personal bank statement which will help in demonstrating your source of funds
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A recent utility bill or other document from your municipality that verifies your address is acceptable as proof of residency.
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Personal Resume detailing relevant work experience
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A brief document namely business description that outlines your company's goals and operations
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Prepare a corporate statement and ownership documentation if you own another company. Having a business in the UAE is always advantageous.
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estimation of the annual turnover and opening deposit for the new account
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Potential customers and suppliers names, as well as the nations where the business will be performed, specified
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A letter of recommendation from the bank of the company owner’s country.
For assistance in assessing your situation and locating the banks where the account opening for you is most likely to be successful, we advise getting in touch with our business setup specialists in Dubai.
Can you open an Offshore Business Account without having a registered company in the UAE?
Many overseas corporations are eager to create an offshore business account in Dubai. All banks in the UAE offer convenient services for doing business abroad, including no restrictions on money repatriation, online banking, and a stable exchange rate between local and US dollars.However, we advise starting a UAE business if you wish to open an offshore bank account in the UAE.
Why do we not advise opening an offshore bank account in Dubai for your foreign business?
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Banks will perform more checks on your organization and business, which can waste time and might result in the account being rejected. UAE banks classify bank accounts held by foreign corporations as belonging to a "high risk" category.
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All incorporation documentation for your foreign company must be legalized, an expensive process that must be done at the UAE Embassy in the nation of origin and the Ministry of Foreign Affairs in Dubai. The complete legalization of just one document costs around 800 USD. About 5 of these are required.
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A foreign entity has an extremely low success rate when trying to open a bank account in the UAE. Banks will rather avoid the hazards.
What are the benefits of having an Offshore Business Account in the UAE?
The benefits of Offshore Business Account in the UAE are enumerated below-
Preferential Currency Exchange Services
The capacity to save and spend money in a foreign currency for international transactions can be useful for people who work abroad.Transferring money between accounts will be quick and cost free because multi currency accounts are typically included as standard.
Additionally, if you need to transfer money across currencies, certain offshore banks offer a competitive foreign exchange rate in comparison to a traditional banking service.
For expats who have duties to other countries financially, this is one of the main benefits of offshore banking facilities.
Levels of Service and Confidentiality
The privacy you have by holding your accounts outside of your country of residence is one of the benefits. Some nations, including UAE and Singapore, have a legislative right to bank secrecy, and banks are prohibited from disclosing information about their account holders or assets unless an urgent inquiry is underway.
This has caused widespread tax evasion, although numerous banks and governments have made progress in recent years to ensure that all money on which tax is due is declared and that new anti money laundering measures are in place. Furthermore, even if an offshore bank complies with these strict rules, expats might still be able to get greater privacy from it than from an onshore one.
Accessibility and Comfort
Being able to maintain a single bank account no matter how frequently you relocate is very advantageous for an international professional. In fact, for many people, this justification is sufficient enough to open an offshore bank account.
A sense of Safety and Protection
When holding money in a bank in your home country, there are disadvantages that you or your business can avoid by using offshore accounts.You can feel confident that your money is secure if you choose an offshore bank that is headquartered in a highly regulated, open jurisdiction, like the UAE, for instance. It is harder for them to be confiscated by police when they have offshore bank accounts.
Recall the events that took place in 2013 in Cyprus? All money transfers from accounts to outside the nation for expats were immediately prohibited.Your wealth is protected from risks like these if you conduct banking abroad.
What are the requirements to open an Offshore Business Account in the UAE?
Both corporations and private citizens have the option to open an offshore business account in the United Arab Emirates. An account is formed in the first instance to safeguard business operations, while in the second, it is done to manage individual assets.
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The offshore company must be registered before you can start the procedure of opening a business bank account.
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The offshore jurisdictions already present in the UAE, like RAK ICC, will work to your favor if you intend to engage in international trading operations.
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Remember that the UAE will only allow a limited amount of offshore activities.
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You won't be able to offer financial services, for instance, either inside or outside of the Emirates after the completion of said limit of financial transactions.
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You cannot use the status of a tax resident of the United Arab Emirates, etc., because you cannot obtain a visa as a resident of the United Arab Emirates.
