Corporate banking
Banking a consultancy
Low volumes, no inventory and a flexi-desk. Nothing about a consultancy is risky and nothing about it is substantial either, which is a different problem.
The reality
What the bank is actually deciding.
Professional services companies are among the least risky customers a bank can have. There is no inventory, no trade finance, no complex corridors, and revenue arrives as fees from a small number of identifiable clients. The difficulty is the opposite of the trading company's: rather than too much activity to explain, there is too little evidence that any activity exists. A consultancy with a flexi-desk, one shareholder, no staff and a projection of two million dirhams looks, on paper, indistinguishable from a company created to move money.
Contracts are what resolve this, and consultancies are unusually well placed to supply them. A signed engagement letter with a named client, a statement of work, an invoice already raised, or even a letter of intent transforms the file, because it converts a projection into a commitment somebody else has made. Where the clients are overseas — which is common, and is often the whole reason a free zone was chosen — naming the countries and currencies up front matters more than it would for a domestic business, because unexplained cross-border receipts into a low-substance company is the exact pattern monitoring systems flag.
What gets asked for
- Risk profile
- Low — no inventory, no trade finance, few counterparties
- Weakness
- Low substance; hard to evidence that activity exists
- What fixes it
- Signed engagements, invoices, letters of intent
- Overseas clients
- Name the countries and currencies before transacting
- Licence
- Professional or consultancy — keep it narrow and accurate
- Typical outcome
- Straightforward, once the evidence gap is filled
Where the time goes
Proportions indicative — they shift with visa count, premises and activity.
The file
What to put in front of them.
- Bring signed engagements to the applicationEven one named client with a signed scope changes the file from projection to evidence.
- Describe the service precisely'Management consultancy' means nothing. 'Regulatory compliance advisory to insurance brokers in the GCC' means something.
- Declare the client geographyCross-border fees into a low-substance company are flagged unless expected. Expected is a matter of having said so.
- Keep the licensed activity narrowA consultancy licence with a trading activity attached will be read as a trading company.
- Invoice properly from the first monthSequential invoices matching the licensed activity are the cheapest substance you will ever build.
Related
Questions
The risk profile is low, but the substance is too, which creates a different problem. Signed client contracts resolve most of it.
It needs explaining, particularly alongside high projections. A consultancy genuinely working from client sites should say so.
That is common and fine, provided you declare the countries and currencies before money starts moving.
Not necessarily, but the gap between premises and projected revenue is what gets questioned. Keep projections realistic.
One question
Where will the money actually come from?
Then the account is a cross-border file, and the compliance question is which countries and in which currencies. Name the corridors in the application rather than waiting to be asked — an unexplained payment from a jurisdiction the bank did not expect is what freezes accounts in month three.
What the file has to containOr just ask usThen substance is the question rather than geography. A local trading history, an Ejari and a customer list make this straightforward; a flexi-desk with no domestic contracts yet is where onboarding slows, and the fix is evidence rather than a different bank.
Why applications get declinedOr just ask usThen source of wealth carries the file, and 'savings' is not an answer. A share sale agreement, a property disposal, audited accounts from an overseas company or a series of tax returns are. Assemble that before the first meeting, not after the first question.
Evidencing source of fundsOr just ask us