RAK ICC Confirmation Letter: AML Due Diligence for Offshore Company Formation

What is a RAK ICC confirmation letter?

A RAK ICC confirmation letter is a formal letter, on the registered agent's letterhead and addressed to the Registrar of RAK ICC, confirming that due diligence has been carried out on a named shareholder and that the person can be accepted as a client. It is one of the core compliance documents in a RAK ICC company incorporation file, and no company is formed without it.

In substance, the letter makes a short set of specific confirmations about the shareholder: that the necessary due diligence has been completed; that the individual has no negative allegations on their profile and no criminal record in the UAE or elsewhere; that the client can be accepted in line with the UAE's Federal AML Law, the AML Cabinet Decision and the Federal Law on combating terrorism offences; that the person is not a Politically Exposed Person; that the business will not involve any sanctioned country or breach applicable sanctions; and that the Registrar will be notified immediately if any of this changes.

Crucially, this is not a document the shareholder writes about themselves. It is the registered agent — a corporate service provider licensed by RAK ICC — putting its own name and stamp behind the statement that it has checked the client and found nothing that should stop the company being formed. That is what gives the letter its weight, and why the checks behind it matter.

Why does RAK ICC require a confirmation letter?

RAK ICC requires the letter because registered agents are gatekeepers under the UAE's anti-money-laundering regime, and the registry must be satisfied that a company is not being used for money laundering, terrorism financing or sanctions evasion. The confirmation letter is the agent's documented evidence that Customer Due Diligence (CDD) was performed before the company was accepted.

The obligation traces back to the UAE's core AML framework — principally Federal Decree-Law No. 20 of 2018 on anti-money laundering and combating the financing of terrorism, its implementing regulation under Cabinet Decision No. 10 of 2019, and the Federal Law on combating terrorism offences, all as amended. Corporate service providers and company registries sit squarely inside this framework, and RAK ICC builds the requirement into its own rules and regulations. For a fuller view of what this means in practice, see our UAE AML compliance service.

There is also a wider context. The UAE was placed on the FATF “grey list” in 2022 and removed from it in February 2024 after strengthening its AML controls. One visible result is that gatekeeper attestations like the RAK ICC confirmation letter are taken seriously: the registered-agent model only works if agents genuinely screen their clients, and the letter is where that screening is certified.

Who signs the RAK ICC confirmation letter?

The confirmation letter is signed by the licensed registered agent, through an authorised signatory from its senior management — not by the shareholder or the new company. It is issued on the agent's letterhead and completed with a signature, the date, and the agent's company stamp.

That distinction is the whole point. The shareholder provides documents and information; the agent verifies them, forms a view, and then vouches for the client to the Registrar. Because the agent is the AML-regulated party, it is the agent — not the client — that is accountable if the attestation turns out to be false. This is exactly why a reputable agent will not sign until full KYC is complete, and why “just sign it, I’m fine” is never an acceptable basis for the letter.

What due diligence stands behind the letter?

Behind a single-page letter sits a full Customer Due Diligence process: verifying who the shareholder is, where their money comes from, who ultimately owns and controls the company, and whether they appear on any watchlist. The letter is only the certificate; the due diligence is the work.

In practice, a registered agent will identify and verify each shareholder and ultimate beneficial owner, understand the intended purpose of the company, establish the source of funds and wealth, screen every individual against sanctions, PEP and adverse-media databases, and assign a risk rating that determines how much further scrutiny is needed. The table below sets out the typical building blocks.

What is a Politically Exposed Person (PEP), and why does the letter mention it?

A Politically Exposed Person (PEP) is someone entrusted with a prominent public function — and the letter specifically confirms non-PEP status because PEPs carry a higher money-laundering and corruption risk that demands extra checks. The confirmation that a shareholder is “not a PEP” is one of the load-bearing statements in the whole document.

The definition is broad. It covers heads of state and government, senior politicians, senior government, judicial and military officials, senior executives of state-owned enterprises and important political party officials — and it extends to their immediate family members and known close associates. It also distinguishes foreign PEPs, domestic PEPs, and those holding senior positions in international organisations.

Being a PEP is not a bar to forming a RAK ICC company. What it changes is the process: a PEP shareholder moves the file into Enhanced Due Diligence, which means establishing source of wealth in detail, obtaining senior-management approval to onboard, and applying closer ongoing monitoring. If a shareholder is a PEP, the honest and workable path is to disclose it up front — not to have it surface later in screening.

What sanctions confirmations does the letter include?

The letter confirms that no business conducted through RAK ICC will involve a sanctioned country or otherwise breach economic or financial sanctions and trade embargoes enforced by the relevant authorities. This clause is how RAK ICC pushes sanctions responsibility down to the agent and the client, in writing.

In the RAK ICC template, the sanctioned countries listed are Crimea, Cuba, Iran, North Korea and Syria, and the undertaking covers goods procured from — or trans-shipped through — a sanctioned country. The named sanctions authorities are the United Arab Emirates, the United Nations, the United States, the European Union, the United Kingdom, and other relevant sanctions bodies. The declaration is deliberately wide, because it is meant to catch indirect exposure, not just direct dealings.

What is the ongoing notification obligation?

The letter ends with an undertaking to notify the Registrar with immediate effect if anything in the confirmation changes — which makes it a continuing duty, not a one-time formality. Signing the letter at incorporation does not close the matter; it opens an ongoing obligation.

Several events can trigger that duty: a change of shareholder or ultimate beneficial owner, a shareholder subsequently becoming a Politically Exposed Person, new sanctions exposure through a counterparty or jurisdiction, criminal proceedings against a beneficial owner, or a material change in the company’s activity. Each of these can undermine a confirmation that was accurate when it was signed, which is precisely why the letter requires prompt notification. This mirrors the ongoing-monitoring obligation that sits at the heart of the UAE AML regime and is one reason the registered-agent relationship is a continuing one rather than a single transaction.

When is Enhanced Due Diligence (EDD) required, and what does it cost?

Enhanced Due Diligence is required whenever a case is higher-risk — typically PEPs, high-risk jurisdictions, complex or opaque ownership, and trust structures — and RAK ICC charges a specific high-risk differential for it. EDD is not a penalty; it is simply a deeper level of the same checks.

In an EDD case, the agent goes further: establishing source of wealth with supporting evidence, obtaining senior-management sign-off, examining the ownership chain more closely, and scheduling more frequent reviews. RAK ICC prices this into its fee schedule, and complex ownership carries its own surcharges on top.

Worked example: due diligence cost for a standard vs high-risk shareholder

The practical impact is easiest to see side by side: a clean, straightforward profile pays only the standard fee, while a high-risk profile can add several thousand dirhams in RAK ICC charges before the agent’s fee is even counted.

Take two people forming the same one-year RAK ICC IBC. Aisha is a UAE-resident entrepreneur with a clean background, a single individual shareholding and a clear source of funds — a standard, low-risk file. Omar is a foreign shareholder who is a PEP and holds the company through a two-level corporate structure — a high-risk file that needs Enhanced Due Diligence. Here is how the RAK ICC government charges compare.

Same company, same registry — but Omar’s file carries an extra AED 8,250 in RAK ICC charges purely because of its risk profile, and that is before the registered agent’s professional fee for the additional EDD work. The lesson is not that complex or PEP-linked structures are impossible; it is that they are more expensive and more document-heavy, and it is far better to know that at the outset than to discover it mid-application.

What happens if the confirmation letter is inaccurate or you don’t update it?

An inaccurate confirmation, or a failure to notify the Registrar of a change, is treated as a false or outdated attestation — and the consequences fall on both the agent and the client. The undertakings in the letter are meaningful precisely because breaching them has teeth.

The exposure runs on several tracks. RAK ICC operates a schedule of fines and can impose a late-notification penalty (AED 600 per year) for failing to keep information current, alongside graduated fines for other breaches. Under the wider UAE AML framework, providing false information or failing to meet AML obligations can attract regulatory penalties and, in serious cases, criminal liability — for the registered agent as the regulated party, and potentially for a client who knowingly misled it. And commercially, a discredited attestation can unravel a company’s banking relationships, since banks rely on the same underlying KYC.

How does Fastlane help with RAK ICC due diligence and confirmation letters?

Fastlane acts as your corporate service provider for the whole RAK ICC process — running KYC and screening, preparing the confirmation letter and incorporation file, and maintaining ongoing monitoring — so the compliance side is handled correctly the first time. Because we are an FTA-registered tax agent and MoE-approved auditor, the due diligence is done to the standard the Registrar and the banks expect.

Our process is straightforward, and it is designed so nothing surfaces at the wrong moment. If your structure needs Enhanced Due Diligence, we tell you at the start — and we pair the formation work with our AML compliance support and, where relevant, Corporate Tax registration, since RAK ICC companies are UAE juridical persons within Corporate Tax scope.

1. Collect KYC documents. We gather passports, proof of address and source-of-wealth information for every shareholder and ultimate beneficial owner.
2. Screen and risk-rate. We screen each individual for PEP status, sanctions exposure and adverse media, and assign a risk rating.
3. Apply enhanced due diligence where needed. Higher-risk profiles get source-of-wealth verification and senior-management approval, with the fees explained up front.
4. Issue the confirmation letter. We prepare and sign the confirmation letter on letterhead and file it, along with the rest of your incorporation documents, with the Registrar.
5. Monitor and update. We keep your registers current and notify the Registrar immediately if any confirmed fact changes.