UAE Anti-Money Laundering (AML) Compliance for Free Zone Companies 2026
UAE has significantly strengthened its Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) framework since its FATF grey-listing in 2022 and subsequent removal from the grey list in 2024. UAE free zone companies are subject to AML compliance obligations. Here is the 2026 guide.
UAE AML Legal Framework
- Federal Decree-Law No. 20 of 2018: UAE AML/CFT Law
- Cabinet Decision No. 10 of 2019: Implementation of AML Law
- Presidential Decree No. 38 of 2014: Establishing the UAE Financial Intelligence Unit (FIU)
- UAE is a member of FATF (Financial Action Task Force)
- UAE exited the FATF grey list in February 2024
Which UAE Free Zone Companies Have AML Obligations?
Not all UAE free zone companies have the same AML obligations. Companies in “Designated Non-Financial Businesses and Professions” (DNFBPs) have the most significant obligations:
DNFBPs in UAE Free Zones — Enhanced AML Obligations
- Real estate agents and brokers
- Dealers in precious metals and stones (gold, diamond, jewellery)
- Lawyers and legal consultants
- Accountants and external auditors
- Corporate service providers (company formation agents)
DNFBPs must: conduct Customer Due Diligence (CDD), maintain records for 5 years, file Suspicious Transaction Reports (STRs) with goAML system.
General Free Zone Companies — Basic AML Obligations
All UAE companies (including free zone companies) that are not DNFBPs still have basic AML obligations:
- Must not knowingly engage in money laundering or terrorism financing
- Must maintain adequate UBO (Ultimate Beneficial Owner) records
- Must comply with UAE sanctions lists (UN sanctions, UAE local sanctions)
UAE UBO (Ultimate Beneficial Owner) Register for Free Zone Companies
Cabinet Resolution No. 58 of 2020 requires all UAE companies to maintain a UBO register identifying all individuals who ultimately own or control 25%+ of the company. Key requirements:
- UBO information must be filed with the company registrar (free zone authority)
- UBO register must be kept up-to-date within 15 days of any change
- Failure to comply can result in fines and administrative penalties
UAE Sanctions Compliance
UAE free zone companies must screen their customers, suppliers, and counterparties against:
- United Nations (UN) Security Council sanctions lists
- UAE local sanctions list (issued by the UAE Supreme Council for National Security)
- US OFAC, EU, and UK sanctions lists (if you have US/EU/UK nexus)
Dealing with sanctioned parties is a serious criminal offence in UAE and can result in company dissolution and criminal prosecution of directors.
Frequently Asked Questions
My UAE IFZA company is a software consultancy. Do I need to implement formal AML procedures?
A software consultancy is not a DNFBP, so you do not have the enhanced AML obligations (CDD, STR reporting, goAML registration) that apply to financial institutions and DNFBPs. However, you still need to: maintain accurate UBO records filed with IFZA, not knowingly deal with sanctioned parties, and comply with UAE CT and VAT reporting. A simple internal policy document noting your AML awareness and screening commitment is good practice for non-DNFBP businesses.