“The future is strong for start-ups in UAE”, says Essa Al Zaabi, senior vice-president, institutional support sector, at Dubai Chamber of Commerce and Industry.
Dubai’s current economic situation is very positive. The emirate has experienced unprecedented growth across all its key economic pillars in the year 2017 and DCCI has been instrumental in supporting and protecting the interests of business community.
As part of its strategic objectives, DCCI continues to provide a favorable business environment that helps businesses especially entrepreneurs and start-ups for their business setup in Dubai. Initiatives such as launching alibaba.com, issuing of quarterly reports and economic studies giving trading figures and market information, Tejar Dubai-an entrepreneurship development program; they are all designed to enhance productivity, decrease costs, save time and increase ease of doing business in Dubai.
Recently, DCCI proposed changes in order to make banking easier for start-ups. According to a whitepaper released by ‘Dubai startup Hub’, an initiative of DCCI (with its knowledge partner Roland Berger), entrepreneurs face numerous banking challenges. DCCI address these challenges and suggest solutions which will lead to a flourishing startup landscape.
From An Entrepreneurs Perspective:
Issue # 1: Entrepreneurs see opening a bank account as the number 1 challenge.
It takes 1-3 months in opening a bank account. According to typical account approval time stated on banks websites which is 1-7 days, even one month is quite a long period of time. Evidence proves that there were many entrepreneurs who abandoned their plan to setup business in Dubai due to this situation.
1. Introduce a Basic no-frills startup bank account
- Develop a very basic starter product i.e. bank account with ‘IBAN only plus basic transfer services’. Restrict bank transfer services to domestic transactions only OR allow foreign currency cross border transactions to a certain amount.
- Keep minimum document requirements within regulatory compliance structure.
The feature will speed up opening of bank account while entrepreneur will be able to conduct basic business activities. Bank account can be converted to full service account after additional CDD requirements are met.
2. Another proposal to speed things up a bit is to provide one stop solution for trade license and bank account.
Free zones can partner with UAE banks that have branches in the freezone to develop a one-stop solution for entrepreneurs through which they can get business license Dubai along with bank account opening.
3. Digitalize the end-to-end account opening process
Utilize the technology for a better and cost-efficient process. For example digitalizing customer interaction via chat bots, video calls to provide guidance, easy document upload, or remote customer ID verification will enhance customer experience.
Moreover, implementing distributed ledge technology will let information sharing and validation between banks and other stakeholders, such as trade licensing authorities.
Also Read: Bank Account in Dubai, UAE
Issue # 2: the lack of transparency/consistency around the documents required and insufficient guidance by bankers throughout the account opening process.
- Lack of simple step-by-step guide (process, timing and document requirements)
- Lack of clarity for additional documents and verification
- Very low empathy and limited competence among-st bank employees (lack knowledge and provide insufficient response)
- Cumbersome document verification requirements, e.g. physical presence required for ID verification rather than ‹digital fingerprint›
- Customer due diligence seems to vary between banks, depending on the type of business activity and where the trade license was issued (e.g. Free Zone A vs. Free Zone B). While this in itself adds complications, the key issue is again the lack of visibility upfront
Solution: More Transparency and guidance on account opening process and document requirements
Banks should provide a clear and readily available step-by-step guide that illustrates timing and documents required to open an account. Banks should also place minimum training and certification requirement for bank personnel dealing with start-ups so that staff is more trained and responsive.
Issues such as these can damage UAE’s reputation as business friendly destination. This is why DCCI came up with solutions to curb the obstacles face by business startups in UAE.
Business Formation Dubai helps its clients in opening a bank account. We have apt solutions for your business setup queries and we our experienced team ensures a smooth, timely and cost-effective business registration Dubai procedure. Contact us for more information or send your query to firstname.lastname@example.org.