A reader experiences difficulty opening a business account for his free-zone company with a bank.
Business client suffers a series of unfortunate events
My brother and I have been trying to open a business account for our company with ADCB. I started the process well over a month ago and it still hasn’t been set up, despite being told that it would take just a few days. I dealt first with one person at the bank and when nothing had happened after two weeks I was told that someone was handling the application, but this person didn’t make contact either. We eventually received an email that said, “The account opening is in the last stages since we have to arrange the approvals as your company is a free-zone entity. My colleague Mr D who is also copied on this email will be managing your account and will be the contact for the account as well.” This person didn’t contact us either, despite having left messages for him. I then tried to raise a complaint on ADCB’s website and the last thing I got was a message saying that “someone from management” would call me the next day. Since then no one has been in touch by any method. As we appear to be getting nowhere, can you please assist as we really need to get a business account set up quickly? P G, Dubai
I referred the issue to my contacts at ADCB and they got in contact with P G. It appears that the problem was that the company is a free zone company via Creative City that does not include a lease as part of the set up and ADCB is unable to open an account in this situation. P G said “They didn’t really explain why they repeatedly told me there was no problem or why they couldn’t just tell me this when I called for information and instead kept making promises that someone else would call me – who then didn’t.” In this instance ADCB could have communicated far better and not kept P G hanging around if they knew there was a problem. I understand that they are not the only bank that will not open accounts for ‘virtual’ businesses and considering how many companies are setting up on a similar basis via free zones, I expect many other businesses to have similar problems. P G has now opened a business account with another bank.
Nearly two years ago I put Dh100,000 into an investment bond on the advice of a financial adviser. I was told that it would make over 10 per cent a year, but as I had heard nothing from the company I asked for a valuation only to find out that it has made nothing at all! The person I dealt with has left and no one else seems interested in giving me any explanations. G L, Dubai
It transpires that G L has an investment bond with an offshore insurance company and that his monies were invested in three high-risk funds. All three have performed badly and what with that and the charges levied, he has not made any profit. He was not aware of the high risk level and was not given any formal recommendation at the time the investment was made. The returns from such investments are not guaranteed and it is wrong to tell someone otherwise. Everyone should always ensure that any financial advice is provided in writing and that they understand how their monies are being invested. The funds chosen for G L were unsuitable for him and this demonstrates the importance of obtaining proper advice from an experienced professional who has their client’s interests at heart. Other funds that are more suitable and with a better track record are available and advice has now been given based on his specific requirements and views on investment risk.
I have been working in Abu Dhabi for almost eight years now with my sponsor. I am planning on resigning this November and my residence visa will expire on April 2, 2014. I already talked to a new employer and they are willing to give me a visa to work again here with the same job. What worries me is my credit card balance. Will it be a problem for me exiting/returning to the UAE, because I heard about the ban if I have debt and did not settle it before I leave the country. J P, Abu Dhabi
If someone resigns from a job, the employer/sponsor will cancel their visa, so the end date shown on the visa itself becomes moot. An employer must be more than “willing” to provide an employee with a residency visa as it is a legal requirement. When a bank becomes aware that someone is leaving a job and has outstanding debts it is standard practice to freeze a bank account. The bank does not request any kind of ban and could not even register a police case unless debts were not being honoured. Once there are further salary payments being made to the account it will be unfrozen. It would be wise to inform the bank that there will be further employment so that they do not assume the account holder is absconding.
Keren Bobker is an independent financial adviser with Holborn Assets in Dubai. Contact her at firstname.lastname@example.org