What are the AML red flags for nominee directors and shareholders in the UAE?
Nominee directors and shareholders are a recognised money laundering risk because they can be used to hide the real owner of a company. Red flags a UAE TCSP should watch for include informal nominees such as relatives, friends or associates who have no genuine role in the business; a nominee who cannot explain the arrangement or refuses to provide information; and a single address used to register many otherwise unconnected companies, often the TCSP’s own address.
Further indicators include a beneficial owner who is also the UBO of numerous unrelated entities, a professional service provider acting as owner without a clear commercial reason, companies with no staff, no premises and no evident economic activity, and structures that appear designed only to move funds in transit. When these features appear, the provider should apply enhanced due diligence, establish the genuine source of funds and control, and consider a suspicious transaction report if the concerns are not resolved.
Legal Reference (UAE):
· Cabinet Resolution No. 109 of 2023 (Real Beneficiary Procedures), Article 9 - requires nominee board members to disclose their nominee status.
· Federal Decree-Law No. 10 of 2025, Article 19(2)(c) - addresses the obligations of companies, nominee directors and nominee shareholders.
For more details, consult the full text of Cabinet Resolution No. 109 of 2023 or seek guidance from your AML compliance officer.