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Ras Al Khaimah: Tax-Efficient Sectors

Banking and Finance Sector

The regulatory authority since 1980 has been the UAE Central Bank. At the end of 2011 there were 817 domestic banks, including 768 branches, 23 head offices, 87 pay offices, and 26 electronic banking services units; and 162 foreign banks including 82 branches and 22 head offices. Federal law restricts foreign banks to no more than eight branches each. There are a number of Islamic banks in Dubai.

For 2009 and 2010, total deposits were Dh982 million and Dh1,049.6 million respectively. Bank deposits of more than Dh1069.7 billion were recorded in the UAE by the Central Bank in 2011. 

Most banks provide trade, project and consumer financing. Their re-export financing accounts for a large portion of trade finance, and this is viewed as having substantial prospects for growth. Short-term loans (3-6 months) by commercial banks are offered at current interest rates. Project loans are given for five years. Consumer financing is also growing rapidly. Furthermore, the local banking system has well established correspondent relationships with international banks.

Federal law requires that every commercial bank must have paid-up capital of at least Dh40 million. There are few investment or merchant banks at present.

In the UAE, the marketing of financial products and services is regulated by the UAE Central Bank under Federal Law No. 10 of 1980 (the Central Bank Law and related banking resolutions). Enforcement of Central Bank policy, however, is often undertaken by the local licensing authorities in the various Emirates.

The Central Bank Law establishes five principal categories of institutions in the UAE - commercial banks, investment banks, financial establishments, financial intermediaries, and monetary intermediaries - all of which must be licensed by both the Central Bank and the local licensing authorities. In addition to these five categories, current practice in the individual Emirates permits the licensing of financial or investment consultants. These consultants are not required to obtain a Central Bank licence.



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