Key Guidance:

• The Reporting entities to establish a harmonized framework under Federal Decree-Law No. 10 of 2025 and Cabinet Resolution No. 134 of 2025 to strengthen AML/CFT/CPF programs, aligning with FATF standards and promoting operational independence for CO/MLROs.
• The CO/MLRO must hold senior positions with direct Board access, no conflicts of interest, and adequate resources; fit-and-proper tests are mandatory for appointments.
• The CO/ MLRO is responsible for transaction monitoring, STR/SAR review and filing, policy development, risk assessments, training programs, bi-annual reporting, and record-keeping for at least five years.
• The reporting entities to ensure compliance, with no outsourcing of the CO/MLRO role allowed (though specific tasks may be after supervisory approval).
• The guidance also identifies common compliance gaps such as inadequate oversight and reporting gaps, and urge immediate gap analysis by the reporting entities to ensure compliances.

Critical Requirements

• Seniority Required – CO/ MLRO must be Board-level with direct access and non-conflicting roles in the company.
• No Outsourcing of CO/ MLRO role – Core role stays in-house, however, certain specific AML compliance tasks like screening, due diligence etc may be selectively outsourced after authority approval.
• Fit & Proper Tests –AML expertise mandatory for CO/ MLRO. Annual review of the CO/MLRO.
• Expanded Duties – Stricter Transaction monitoring, Prompt STR filing, and bi-annual board reporting

To understand how the new AML guidance affects your company—or to schedule an AML “health check”—please contact us at uae@mbgcorp.com

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In today’s dynamic regulatory environment, businesses in the UAE must remain vigilant to ensure compliance with evolving laws and governance standards. For companies operating across mainland, free zones, and offshore jurisdictions, proactive compliance management is critical to sustaining long-term growth and operational efficiency.

More often than not, compliance failures do not stem from intentional misconduct, but from limited awareness or the absence of continuous monitoring of applicable laws and regulations. As the UAE’s legislative landscape continues to evolve, maintaining compliance is no longer optional, it is an integral element of robust corporate governance and a vital factor in building stakeholder trust and achieving sustainable growth.

What is a Corporate Health Check?

A “corporate health check” is a comprehensive review of a company’s legal, financial, and operational framework. It evaluates whether the business is functioning in alignment with applicable laws, internal policies, and best practices. The objective of a corporate health check is to identify gaps, risks, and inefficiencies that need efficient mitigation before they escalate into significant issues.

This typically includes:

• Corporate structure and governance – review of the company’s constitutional documents such as the memorandum of association, and corporate actions such as resolutions.
• Licensing and regulatory approvals – review of the company’s trade licenses and their validity, statutory filings, pending approvals, including whether any additional approvals are required and alignment of actual operations with licensed activities.
• Shareholding and ownership records – reviewing the company’s policies in respect of the appointment and registration of its board of directors and shareholders and their latest ownership in the company.
• Contractual arrangements – review of the validity and enforceability of the key material contracts to which the company is a party, to identify and highlight key legal and commercial risks.
• Employment and HR compliance – review of employment contracts, internal employee welfare policies including employee handbook, assessment of procedures for disciplinary actions and termination of employment, to evaluate their alignment with UAE Labour Law.
• Financial reporting and tax compliance – review of the company’s financial statements, business operations and transactions entered into by the company in terms of tax applicability in the UAE.

Understanding Compliance Audit

A compliance audit is a thorough and systematic examination of the company’s business practices and procedures, to assess if a company adheres to specific regulatory requirements imposed on the them while operating in the UAE. While compliance audits are recommended for all business, these are specifically beneficial for new businesses, growing business or businesses in the midst of expanding their operations.

This includes compliance with:

• UAE Commercial Companies Law – to ensure that a company does not engage in unlicensed activities, even unintentionally.
• Ultimate Beneficial Ownership (UBO) requirements – to ensure maintenance of UBO records to avoid imposition of fines, penalties or revocation of the licenses for the company.
• Anti-Money Laundering (AML) regulations – to ensure that effective AML policies and procedures are established and implemented by the entity.
• Industrial Specific Regulation – Review of industry specific regulation applicable to the core business operations of the company

Unlike routine internal reviews, compliance audits are often evidence-based and may be required by regulators, auditors, or investors

Navigating an evolving Regulatory Landscape

Given the complexity and rapidly evolving landscape of UAE regulations, businesses often rely on expert advisory firms to conduct independent and thorough compliance reviews. Organizations that invest in regular health checkups benefit from:

• Reduced risk exposure
• Stronger governance structures
• Improved investor confidence
• Seamless regulatory inspections

Conclusion

The UAE’s regulatory ecosystem continues to align with global standards, particularly in areas such as transparency, anti-money laundering, and tax compliance. This evolution demands that organizations move from periodic compliance to continuous monitoring and adaptive frameworks.

In an environment of increasing regulatory scrutiny, organizations must move beyond reactive compliance and adopt a proactive, structured approach. By regularly assessing their corporate health, companies can strengthen governance, mitigate risks, and position themselves for sustainable growth in the UAE’s competitive business landscape.

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