Compliance Audit Guide in ADGM: Documentation Requirements

Most ADGM entities find out what condition their records are in at the worst possible moment: a request from the Registration Authority, a themed review by the Financial Services Regulatory Authority, an auditor asking who actually owns the shares, or a buyer's due diligence list two weeks before signing. None of these questions are difficult if the file has been kept the way the rules assume it will be. Answering them retrospectively, from memory and email archives, is another matter.

This guide sets out what an ADGM company should be able to produce on request, who is likely to ask for it, and where the gaps usually appear.

Two rulebooks sit on top of each other

Abu Dhabi Global Market is a common-law jurisdiction with its own courts and its own financial services regulator, the FSRA. In practice that means two separate sets of obligations, and confusing them is the first mistake companies make.

Every entity registered in ADGM, regulated or not, answers to the Registration Authority on corporate matters: the register of members, the register of directors, beneficial ownership, accounts, the registered office, and notification of changes within the period the Authority specifies. A firm that holds an FSRA licence carries a second file entirely, covering licence conditions, the individuals approved to perform controlled functions, anti-money-laundering systems, and client records.

Federal obligations do not fall away because an entity sits inside the centre. Corporate tax under Federal Decree-Law No. 47 of 2022 applies to financial years starting on or after 1 June 2023, at 0% on taxable income up to AED 375,000 and 9% above that. VAT is charged at 5% under Federal Decree-Law No. 8 of 2017, as amended by Federal Decree-Law No. 18 of 2022. The records supporting both are federal records, and they need to be retrievable rather than merely present somewhere in an accounting system.

The corporate file

This is the set of documents the Registration Authority, your auditor and any counterparty's lawyer will all ask for, and it is the one most often out of date:

• Certificate of incorporation, the articles of association in their current form, and every amendment actually filed rather than merely approved internally.
• Register of members, showing each transfer and allotment in sequence, with the share certificates and stock transfer forms that support them.
• Register of directors and officers, matched to signed consents to act and to the resignations that removed the people no longer there.
• Beneficial ownership records identifying the natural persons behind the shareholding, with the evidence relied on to reach that conclusion.
• Board and shareholder minutes and written resolutions, signed and dated, covering every decision the constitution requires a decision for.
• Registered office details and the lease or service agreement that supports them.
• Powers of attorney, together with a note of what each one permits and when it lapses.

Accounting records and the audit

The accounts an ADGM company files are the visible end of a longer chain. The auditor works backwards from the financial statements to the underlying records: ledgers, bank statements, contracts, invoices, intercompany agreements and the board approvals for material transactions. Where a group operates across several jurisdictions, the recurring problem is that the supporting documents sit with a parent company abroad and cannot be produced quickly in the form the auditor needs.

Two points save time. Appoint the auditor and confirm the financial year in writing rather than by assumption, and keep intercompany arrangements documented as agreements rather than as balances that appear in the ledger with no paper behind them.

The regulated firm's compliance file

A firm with an FSRA licence should be able to hand over, without preparation:

• The licence and its conditions, with a written record of how each condition is met in practice.
• The compliance manual and the compliance monitoring programme, together with evidence that the monitoring was actually carried out and reported to the board.
• The business risk assessment for money laundering and financial crime, reviewed and updated, not adopted once and filed.
• Customer due diligence files, including the source-of-funds and source-of-wealth work for higher-risk relationships.
• Records of sanctions and screening checks, internal escalations and reports made to the authorities.
• Training records for staff, and the register of approved individuals and their responsibilities.
• Outsourcing and delegation agreements, and the complaints log with outcomes recorded.

The distinction that matters in a review is between having a policy and being able to show it operating. A manual with no monitoring evidence behind it tends to make matters worse rather than better, because it establishes what the firm said it would do.

Employment, data and substance records

Keep signed employment contracts, visa and identity records, payroll evidence and end-of-service calculations together, and confirm which employment regime governs your contracts before you issue them. The federal regime is Federal Decree-Law No. 33 of 2021, which replaced Federal Law No. 8 of 1980, while ADGM applies its own common-law framework — this is exactly the kind of question that should be settled at drafting rather than at termination.

On personal data, ADGM operates its own regime, as does the DIFC, while Federal Decree-Law No. 45 of 2021 governs elsewhere in the UAE. A group that processes data across those lines needs to know which regime applies to which activity, and to keep records of what it processes, why, and with whom it shares it.

Economic Substance Regulations were cancelled for financial years ending after 31 December 2022 by Cabinet Decision No. 98 of 2024, with obligations remaining only for financial years 2019 to 2022. Two consequences follow: stop running a live substance filing routine that is no longer required, and do not discard the notifications, reports and supporting evidence for those earlier years.

What to hold and who asks for it

Document set	Typically requested by	Common failure
Registers of members and directors	Registration Authority, auditors, counterparties	Not updated after a transfer or resignation
Beneficial ownership evidence	Registration Authority, banks, regulated counterparties	Contradicts the shareholder register
Minutes and resolutions	Auditors, buyers, courts	Written after the event, unsigned or undated
Accounting records and supporting contracts	Auditors, tax authorities	Held offshore by a parent, not retrievable
AML and customer due diligence files	FSRA, correspondent banks	Policy exists, monitoring evidence does not
Employment and payroll records	Auditors, employees in dispute	Contract terms differ from what was applied

Preparing before you are asked

The work that makes an audit straightforward is unglamorous. Give one named person responsibility for the corporate file rather than leaving it between finance and the company secretary. Reconcile the registers against the beneficial ownership record and the bank's own records at a fixed point each year. Document decisions when they are taken. Keep originals of attested and legalised documents where the entity can reach them.

Where records are already incomplete, the sensible order is to fix the position going forward, reconstruct what can properly be reconstructed with a clear note of how, and take advice before filing anything that corrects an earlier statement. Our corporate legal services team handles that remedial work regularly, and the same records tend to determine the outcome if a matter later moves into commercial dispute resolution, where the party with a contemporaneous file is in a materially better position than the party reconstructing one.

Conclusion

A compliance audit in ADGM tests record-keeping discipline more than legal sophistication. The entities that come through them without difficulty are not the ones with the longest manuals; they are the ones whose registers match reality, whose minutes exist, and whose supporting documents can be produced on the day they are requested.

If you need your ADGM records reviewed before someone else reviews them, contact the Nour Attorneys team.

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Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal advice. Readers should seek professional legal advice tailored to their specific circumstances before making any decisions or taking any action based on the content of this article.

Nour Attorneys Team

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