How to Send Money from UAE to Russia
International financial institutions in the UAE are becoming extremely cautious about making transactions to Russian accounts. Emirati banks concern being involved in illegal transactions resulting in sanctions, facing additional financial and technical restrictions and losing access to correspondent banks.
As more and more Emirati companies are limiting their collaboration with Russian partners because there is no reliable instrument for mutual transactions, entrepreneurs from both countries strive to find a solution to make payments to Russia for goods and services rendered.
We suggest three ways to solve the problem of how to send money to Russia from UAE:
- Open an account for an Emirati company in an Emirati bank, which works with Russia
- Open an account for an Emirati company in a foreign bank, which works with Russia
- Combine these two options
In practice, the best results can be achieved by combining the first and the second solution. The final choice of the right approach depends on many aspects. In any case, the more banks involved, the more likely payments will reach the counterparty without running a risk to face bank restrictions.
How Can a Russian Beneficiary Open an Account With UAE Banks
Emirati banks are not very enthusiastic about working with the owners of Russian companies, especially when it comes to payments to Russia, while opening an account for a Russian beneficiary is quite a piece of cake. The service is provided by many UAE banks on condition of signing a corresponding letter in which the beneficiary confirms they will not work with Russia.
Observance of such a confirmation is carefully monitored. To receive the bank services, it is enough to have a good profile, provide proof of source of income and a transparent business model. For example, the latter could be provision of services to a European company in the UAE or purchase of goods in Southeast Asia and subsequent distribution to Europe. Any model that does not involve Russia will be acceptable.
Can I Send Money From the UAE to Russia?
There are peculiarities of opening an account in the UAE for transactions with Russia. When there is a need to send money to Russia from UAE, banks are obliged to clarify:
- whether your goods fall under the category of sanctioned products in accordance with European and American restrictions;
- who the counterparty is;
- who the owner of the counterparties is;
- whether the goods are being transported via such countries under sanctions as Iran;
- who the end user of the goods is.
Documents such as waybills, shipping manifests, agreements, contracts and acts are subject to verification. The main requirement is the transparency of the documentation provided. However, even if all conditions are met, the bank reserves the right to refuse to open an account or to impose additional requirements, such as keeping minimum balance or buying banking products, in order to minimize its potential risks.
How Do I Send Money to a Russian?
Don’t hesitate to seek professional advice if you need assistance in opening a bank account in UAE in order to make payments to Russia. Experts will help you find a Russia-friendly bank in the UAE.
It is important to specify that transactions are very likely to be conducted in soft currencies, particularly in dirhams. Emirati banks are not ready to work with Russia in dollars or euros. The banks of the so-called second and third-tier, which conduct their business mainly in the national currency of the UAE, are more inclined to make Russian transactions in dirhams. Due to this policy, they can avoid using correspondent banks when making payments and, in general, face fewer risks of ‘reputational damage’. It is advisable to choose a bank, which deals mainly with dirhams and is not active as an international player. These banks are more inclined to open an account with a Russian owner.
Opening an Account for a UAE Company With a Bank Abroad
Despite the discouraging news that banks in CIS countries are beginning to restrict payments with Russia, an Emirati company may well open an account, for example, in Kyrgyzstan, Armenia, Kazakhstan, Serbia or Montenegro. In such a case, the most common model is as follows:
- The client opens an account for the Emirati company in rubles and in hard currency in one of the post-Soviet banks
- The selected bank makes payments to Russia only in rubles
- Rubles are converted on the account in the intermediary country (CIS, Serbia or Montenegro)
- The money in dollars or euro is received as own funds on the client’s foreign account in the UAE
It should be taken into consideration that post-Soviet banks prefer to avoid money transit, e.g. transferring automatically all amounts that arrive on the client’s account to foreign countries. To confirm the absence of funds transit, it is necessary to:
- appoint a local counterparty;
- open an office and hire employees in CIS countries, Serbia or Montenegro;
- carry out logistics via chosen country;
- use payment systems of the above mentioned countries;
- Russia-UAE Money Transfer
In certain cases, it is possible to open an account for an Emirati company with a Russian bank. In order to do this, it is mandatory to get a tax residence certificate and an INN number. This may be useful when it is necessary to make a payment from a sanctioned bank to an account of a non-sanctioned bank, which will subsequently work with your Emirati or intermediate bank and make payments in Russia.
Can Money Be Sent to Russia Now?
It should be emphasized, that despite a tense geopolitical situation, there are still some working business models that can be followed. Nevertheless, each case requires an individual approach as the international business is becoming complex and nuanced.
Our experts specialize in solving complex corporate issues individually and will be happy to find an optimal business model that will ensure successful collaboration with Russia.
- Open a personal account with a UAE bank – from AED 3000 and 2 weeks
- Open a corporate account with a UAE bank – from AED 7000 and 6 weeks
