KYC Document Verification Requirements in the UAE

What is KYC Document Verification?

ID documents like passports, national IDs, official government documents, utility bills, and tax statements are all part of the KYC document verification procedure. The verification method takes into account documents showing the user’s real photograph, allowing for perfect verification of identification and the risk of probable impersonation to be eliminated.

Who Oversees AML KYC Regulations In The UAE?

The United Arab Emirates (UAE) has created a strong regulatory framework to ensure the financial system’s stability and integrity, with a special emphasis on preventing money laundering and terrorism financing. Several regulators and organizations are responsible for supervising various sectors of the financial sector and enforcing anti-money laundering (AML) and counter-terrorist financing (CTF) legislation. These regulatory authorities take the necessary steps to ensure the UAE’s overall financial stability and to prohibit unlawful financial activities. Some of the most important regulatory bodies in the UAE are

• Central Bank of the UAE (CBUAE)
• UAE Securities and Commodities Authority (SCA)
• Dubai Financial Services Authority (DFSA).
• Abu Dhabi Global Market Financial Services Regulatory Authority (ADGM FSRA)
• Ministry of Economy

Domestic and international businesses operating in the UAE must follow AML-CFT regulations. Companies that must comply are classified into three types:

1. Designated non-financial businesses and professions (DNFBPs)
2. Financial institutions
3. Non-profit organizations (NPO)

What Are The Key AML KYC Regulations In The UAE?

The key Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements in the United Arab Emirates (UAE) are controlled by a comprehensive legal and regulatory framework.

• The Federal Decree-Law No. (20) of 2018 On Anti-Money Laundering and Combating the Financing of Terrorism and Financing of Illegal Organizations (the “AML-CFT Law” or “the Law”) and its implementing regulation are the major AML/KYC laws in the UAE.
• Cabinet Decision No. (10) of 2019 Concerning the Implementation Regulation of Decree Law No. (20) of 2018 Concerning Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organizations (the “AML-CFT Decision” or “the Cabinet Decision”).

These rules and regulations are intended to prevent money laundering, terrorism financing, and the financing of unlawful organizations. They are valid across the United Arab Emirates, including the Financial and Business Free Zone. The competent supervisory and regulatory agencies in either federal or local jurisdictions must implement and enforce these laws.

Here are some important aspects of the KYC regulatory framework in the UAE:

• Customer due diligence (CDD) procedures must be established and maintained by financial institutions operating in the UAE.
• When opening and maintaining an account, customer identification and verification steps, including the collection of identification documents, are mandatory.
• For high-risk customers, politically exposed persons (PEPs), and transactions with a higher risk of money laundering or terrorist funding, enhanced due diligence (EDD) is necessary.
• Ongoing monitoring of consumer transactions and activity is important to detect and report suspicious transactions.

The UAE works with international organizations and other countries to exchange information and combat cross-border financial crime successfully. The country has worked to integrate its regulatory structure with international standards established by organizations such as the Financial Action Task Force (FATF).

KYC Document Verification Requirements in UAE

What KYC documents are required in the UAE for Individuals?

Individual customers (individuals) must provide the following KYC documents:

• Emirates ID
• Passport
• Driving License
• Any other Government issued document having a photograph

KYC document verification for an individual customer’s address:

• Utility Bill (not older than 3 months)
• Municipal Tax Record
• Property Purchase or Rent Agreement
• Bank Statement
• Insurance Policy
• Any other Government issued document capturing address

What KYC documents are required in the UAE for corporate clients (legal entities)?

The following KYC documents are required for corporate customers in the UAE

• ID/travel document for all shareholders with 25% and more shares
• Trade License
• Certificate of Incorporation
• Memorandum of Association
• Articles of Association
• Certificate of Good Standing

KYC document verification for a corporate customer’s address

• Utility Bill (not older than 3 months)
• Municipal Tax Record
• Property Purchase or Rent Agreement
• Bank Statement/Insurance Policy
• Any other Government issued document capturing address

Other KYC Documents for a Corporate Customer’s Onboarding include:

• Personal documents same as individual
• Audited Financial Statements
• Register of Shareholders
• Directors/UBOs
• Board Resolution appointing authorized signatory

KYC Document Verification for Foreign Nationals in UAE

As discussed in the significance of KYC document verification in our previous blog, in the case of foreign nationals, it is critical to understand and obtain just those identification documents that are valid in the relevant jurisdictions. Documents that can be used for verification include:

• Bills or account statements from public utilities
• Local and national government-issued documents
• Registered property purchase, lease, or rental agreements
• Documents from supervised third-party financial institutions, such as bank statements, credit or debit card statements, or insurance policies

Also Read: What are some major KYC Document Verification requirements in the UK?

Why KYC document verification is Important for Companies in the UAE?

KYC is a legal and regulatory requirement in the UAE, as it is in many other nations. Companies must follow KYC document verification to avoid financial crimes such as money laundering and terrorism financing. Companies that know their clients can better manage their risks and protect themselves from financial and reputational harm.

For companies operating in the UAE, this entails having effective KYC document verification systems in place, They must be able to authenticate their customers’ identities, as well as the nature of their customers’ activities, and they must be able to monitor their customers’ transactions for signals of suspicious behavior. Failure to meet these criteria can result in severe penalties as well as major reputational damage.

The UAE is constantly enacting new policies to reduce money laundering, terrorism financing, and other illicit activities in the country. As a result, all types of enterprises must guarantee that they adhere to all applicable regulations.

Also Read: How is the KYC Document Authentication process done for Fintech?

The Role of KYC Solution Providers in Identity Document Verification

For UAE banks and other financial institutions, establishing a good KYC system is critical, and KYC Solution Providers play a critical role in the Document Identity Verification system, enabling compliance with AML rules and secure operations in a legal environment.

The KYC AML Guide is your strategic tool for achieving compliance and avoiding the financial and reputational consequences of poor decision-making. When investing in a KYC Solution, it is critical to collect precise information on how well the selected KYC Vendor meets your specific customer onboarding criteria by booking our KYC technology buying services.