Introduction
According to the UAE’s regulatory authorities, there are comprehensive Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) frameworks in the UAE. These frameworks impose strict compliance obligations on real estate companies, in addition, all real estate companies operating in the UAE must comply with AML laws as part of their statutory obligations. Any real estate company that fails to comply with the AML Framework will face regulatory penalties. Therefore, compliance with the AML legislation is now a statutory requirement for all real estate companies doing business in the UAE.
Regulatory Framework Governing AML in UAE Real Estate
The Anti-Money Laundering and Combating the Financing of Terrorism and the Illegal Organisations Regulations which came into force via Federal Decree-Law No 20 of 2018, and the Implementing Regulations and Designated Non-Financial Businesses and Professions (DNFBPs) Cabinet Decisions dated 10 February 2019 and 58 September 2020, govern all forms of Anti-Money Laundering activity associated with property in the United Arab Emirates. As a result of these Decrees and Regulations, real estate brokers, agents, developers, and property dealers all fall within the definition of Designated Non-Financial Businesses and Professions (DNFBPs), thus they will have the same obligations to carry out Enhanced Due Diligence, Report and Maintain Records, just as Financial Institutions do.
Applicability to Real Estate Businesses
Any entity engaged in real estate transaction activities must comply with AML obligations regardless of whether they are a real estate broker, create development projects through direct sales, or operate a business that purchases, sells, or leases out real estate. Each of these entities is subject to both mainland and free zone AML requirements even if their real estate transaction activity involves only local clients or foreign clients. Regulatory bodies are increasing the number of investigations into the operations of companies engaged in real estate activity because of the risk that these companies could be used for illicit financial transactions.
Customer Due Diligence and Risk Assessment
A main obligation of anti-money laundering legislation in relation to Real Estate is conducting Customer Due Diligence (CDD). Real Estate businesses must know their clients and who the beneficial owners are and the persons named as signatories for transactional documents. They must also determine if their clients are Politically Exposed Persons (PEPs) and the source of the funds and/or source of wealth the client provides and how they arrived at these sources. Where relevant transactions, or clients, pose elevated risks such as foreign investors or complex corporate structures or are very large dollar value, it will be necessary to perform an Enhanced Due Diligence (EDD) review. Real Estate businesses must also perform a company-wide risk assessment on their business and document the outcomes to assess and classify their clients and or the transactions on a range of money laundering risks and create and implement an appropriate set of mitigation measures. Risk assessments for RE businesses must be completed across all regions within the business including both Mainland and Free Zone entities, regardless of whether the transactions are made to or from local or foreign customers. The increased scrutiny of the real estate sector from regulators is because of the ability for the real estate sector to be misused for the movement of illicit funds.
Suspicious Transaction Reporting Obligations
Reports of Suspicious Transactions (STRs) must be issued to the UAE Financial Intelligence Unit (FIU) within the parameters of the goAML platform by all land-based real property organizations. If the transaction is not an indication of what one may reasonably anticipate from that customer’s financial profile; there is no clear economic rationale for the transaction; or if it exhibits characteristics that are considered abnormal, the transaction will be reported as a suspicious activity; and the customer shall not be advised that the report was filed with the FIU. Not filing STRs that should have constituted a STR is a grave regulatory violation.
Record-Keeping and Internal Controls
The real estate industry is also subject to AML regulations that require them to keep complete records for Client ID documents, Transaction records, Risk Assessment information and Suspicious Transaction Reporting (STR) for a minimum of 5 years. Regulatory auditors must have access to these records. Additionally, real estate businesses are required to develop internal AML Policies and Procedures, have an appointed compliance officer, and ensure all employees are trained regularly on AML policy and procedures based on employees’ specific job functions and responsibilities.
Penalties for Non-Compliance
Failure to follow Money Laundering (AML) Regulations in regards to real estate transactions in the UAE can lead to heavy financial penalties, loss of trade licenses, being put on a blacklist, and in the worst case, being charged with a crime. The UAE has made it clear that it will not tolerate any violation of AML Regulations particularly in relation to real estate transactions. Recent cases show the growing trend of enforcement in the real estate sector.
Role of Legal Advisors in AML Compliance
Real estate is under increased scrutiny by AML regulators. This increased scrutiny makes it critical for legal advisors to assist real estate businesses with their compliance efforts. Legal advisors provide services such as performing AML risks assessments, creating and implementing AML policy/ies, advising on Customer Due Diligence (CDD) requirements, responding to regulatory inspections, as well as advice on the reporting of Suspicious Transaction Reports (STRs). Using proactive legal assistance will help minimize regulatory risk and improve organizational governance and investor confidence.
AML compliance is integral to the operation of Property Sector of the UAE and as such, real estate companies must have a structured written AML program and apply a “Risk-Based” methodology when establishing their AML frameworks and to collaborate with government organisations/agencies. Continuously monitoring your compliance with AML Laws and Regulations through legal counsel is your best way to protect yourself from Financial Penalties, Reputational Damage and Criminal Exposure.
Hrehaan Tuli is a law graduate and content contributor for Legallands.com, recognized for his clear, research-based approach to writing on global trade, digital policy, and corporate compliance. His articles reflect a nuanced understanding of international legal frameworks and their practical implications for businesses operating across borders.
With a strong foundation in commercial and regulatory law, Hrehaan focuses on analyzing evolving trade agreements, data governance models, and compliance mechanisms shaping the modern corporate landscape. His work emphasizes clarity, legal accuracy, and practical relevance—making complex legal concepts accessible to both professionals and entrepreneurs.
Through his association with LEGALLANDS LLP, Hrehaan contributes to thought leadership in the areas of digital economy law, trade facilitation, and transnational corporate regulation, supporting informed decision-making in a rapidly changing global market.
