Understanding Record Keeping Obligations and Legal Retention Requirements in the UAE

Keeping the right records for the right amount of time is a legal responsibility for every business in the UAE. Yet many companies are unsure what must be stored, how long to retain it, and who is accountable. This guide breaks down record-keeping obligations, legal retention periods, and practical steps to stay compliant with confidence and how Arnifi’s services and AI tools help make your journey seamless and compliant from the very first day.

Introduction

If you are a person or a business owner operating in the UAE, you know the importance of keeping proper records. Although it is so important, keeping records is sometimes considered a back-office administrative task when, in fact, it is more than that. When it comes to regulatory compliance, the length of time you keep your records, where you store them, and how quickly you can access them are all connected.

Be it corporate documents and financial statements, customer records, and AML files, UAE laws have a certain rule. Minimum retention periods are imposed, which businesses are required to follow. One must understand these obligations with the objective of protecting your company during inspections, disputes, regulatory reviews, and audits.

What Are Record Keeping Obligations

Of course, the most asked question is what exactly are record-keeping obligations? Well, it refers to the legal duty of businesses to maintain, create, store, and preserve specific documents for a definitive period of time.

These obligations apply to:

• Companies in free zones and on the mainland
  
• Financial institutions
  
• Professional service firms
  
• Trading and manufacturing businesses
  
• Startups and SMEs
  

Records typically covered include:

• Accounting and financial records
  
• Corporate governance documents
  
• Customer and client files
  
• Employment records
  
• Compliance documentation
  

One might question the purpose. These obligations are kept in mind to ensure that transparency, accountability, and most importantly, traceability are convenient for individuals.

Why Record Retention Laws Exist

Record retention laws are designed to support regulatory oversight and protect the integrity of the business environment.

Key objectives include:

• Enabling regulatory inspections
  
• Supporting tax and audit reviews
  
• Preventing financial crime
  
• Resolving commercial disputes
  
• Protecting customer rights
  

It is vital for records to be maintained properly and correctly. This helps various authorities verify the transactions that are made, assess compliance, and investigate any sort of misconduct when required.

Overview of the 5 Year Legal Retention Rule

One of the most commonly referenced requirements is the 5-year record-keeping rule in the UAE. In general terms, many UAE laws require businesses to retain core records for a minimum of five years.

This typically applies to:

• Accounting books
  
• Financial statements
  
• Tax records
  
• AML-related documents
  

However, it is important to understand:

• Five years is often the minimum
  
• Certain records may require longer retention
  
• Industry-specific regulations may impose extended periods
  

Businesses must treat assessments of statutory record retention periods based on their regulatory framework and activity as a priority.

Types of Records Businesses Must Retain

Accounting and Financial Records

• General ledger
  
• Trial balance
  
• Invoices and receipts
  
• Bank statements
  
• Tax filings
  
• Audit reports
  

Corporate and Governance Documents

• Trade license
  
• Memorandum and Articles of Association
  
• Share registers
  
• Board resolutions
  
• Power of attorney
  

Customer and Client Records

• Contracts and agreements
  
• KYC documents
  
• Correspondence
  
• Service records
  

Employment Records

• Employment contracts
  
• Payroll records
  
• Leave records
  
• End-of-service calculations
  

These types of records form the foundation of legal record retention in the UAE.

Record Keeping Obligations Under UAE AML Laws

Businesses subject to AML regulations must maintain extensive compliance documentation in the UAE.

This includes:

• Customer due diligence (CDD) files
  
• Enhanced due diligence records
  
• Transaction monitoring data
  
• Suspicious transaction reports
  
• Risk assessments
  
• Screening results
  

Retention periods generally require:

• At least five years after the end of the relationship
  
• Longer if investigations are ongoing
  

If one fails to retain AML records, it can lead to severe regulatory action.

Electronic vs Physical Records

UAE regulations allow businesses to maintain records electronically, provided certain conditions are met.

Electronic records must:

• Be accurate and complete
  
• Be accessible upon request
  
• Be protected from tampering
  
• Allow retrieval in a readable format
  

Good practice includes:

• Secure cloud storage
  
• Encrypted systems
  
• Regular backups
  
• Disaster recovery planning
  

Physical records should be:

• Stored securely
  
• Protected from damage
  
• Indexed and catalogued
  

Who Is Responsible for Record Keeping

Responsibility typically rests with:

• Company directors
  
• Senior management
  
• Compliance officers
  
• Finance managers
  

Businesses may also engage outsourced service providers, but accountability remains with the company.

Clear assignment of responsibility ensures:

• Records are created correctly
  
• Retention schedules are followed
  
• Disposal occurs lawfully

Record Keeping Obligations | Common Mistakes

• Deleting records too early
  
• Storing files without indexing
  
• Mixing personal and business records
  
• Failing to back up data
  
• Inconsistent naming conventions
  
• Lack of access controls
  

These mistakes make it difficult to respond to audits and inspections.

How to Create a Record Retention Policy

A business record retention policy should clearly define how records are managed.

Key steps:

• Identify applicable laws and regulations
  
• List record categories
  
• Assign retention periods
  
• Define storage methods
  
• Assign responsibility
  
• Establish disposal procedures
  

A well-documented policy ensures consistent regulatory record-keeping across the organisation.

Consequences of Non-Compliance

Failure to meet record-keeping obligations in the UAE can result in:

• Regulatory fines
  
• License suspension
  
• Business closure
  
• Increased audit scrutiny
  
• Reputational damage
  

Non-compliance often signals broader governance weaknesses.

FAQs

Q) Is the 5-year retention rule universal for all records?
A) No. Some records require longer retention depending on the law and industry.

Q) Can records be stored outside the UAE?
A) Yes, provided they remain accessible and secure.

Q) Are scanned copies legally valid?
A) Yes, if they are accurate and tamper-proof.

Q) What happens if records are lost?
A) Businesses must report incidents and demonstrate reasonable safeguards.

Conclusion

Businesses protect themselves in various ways, but the central part of it all is maintaining a strong record-keeping process. It is more convenient and easier when records are organised and accessible by the business. Retention for the correct period of time helps in making compliance processes streamlined, and audits are no longer stressful, with operational risks barely there.

However, keeping pace with evolving regulations and documentation standards can feel overwhelming, especially for growing businesses. This is where Arnifi compliance support services add real value. Arnifi helps organisations design practical record retention policies, strengthen compliance documentation, and align internal processes with regulatory expectations.

In addition, Arnifi’s Arni AI platform brings intelligent automation into compliance workflows. With tools like the AML Checker, businesses can quickly assess risk, support due diligence processes, and maintain stronger oversight of compliance obligations. Together, expert guidance and smart technology create a simpler, more reliable path to regulatory confidence in the UAE.