Acquiring a Licensed Money Exchange in the UAE: Key Considerations

The money exchange sector is a vital pillar of the UAE’s financial ecosystem, facilitating remittances, currency conversions, and cross-border payments. For investors seeking a foothold in this market, acquiring an existing licensed exchange can often be more attractive than establishing one from scratch. However, such acquisitions are complex, heavily regulated, and require careful planning. This article outlines the essential considerations—due diligence, Central Bank of UAE (CBUAE) approval, share purchase agreement (SPA) structuring, and change of control procedures—to acquire a money exchange business in the UAE successfully. 

Why Acquire an Exchange Instead of Building Anew? 

Acquisition offers several advantages over greenfield entry: 

• • Regulatory “savings”: The existing license and regulatory relationships are in place, reducing lead time and risk. 

• • Established customer base: You inherit client contracts, correspondents, and systems. 

• • Operational continuity: Transition is easier than starting from zero. 

• • Market credibility: A known brand may command better trust among clients and banks. 

That said, risks loom large: legacy liabilities, hidden compliance gaps, or regulatory disallowance of the transfer. Structuring the deal properly is critical. 

 This Article is a Part of our Setting Up or Acquiring a Money Exchange in the UAE Blogpost and Corporate and Commercial Services.

Due Diligence: The Foundation of a Safe Acquisition 

Before even offering a purchase price, one must conduct exhaustive due diligence across several domains: 

Regulatory & Compliance 

• • Check past filings, audit reports, suspicious transaction reporting, and any sanctions or regulatory actions. 

• • Check for outstanding fines, warnings, or non-compliance notices within CBUAE 

• • Check whether there are any de-risked or blacklisted relationships.  

Financial Health 

• • Audited financial statements for the past 3–5 years. 

• • Liabilities and contingent liabilities, lawsuits, unsettled claims, employee obligations. 

• • Cash flow sufficiency to sustain operations and capital buffers. 

Operational & Technical 

• • IT architecture and connection to CBUAE reporting systems. 

• • Internal controls, compliance processes, and audit logs. 

• • Contracts with vendors, agents, and agents in other jurisdictions. 

Corporate & Ownership 

• • Verification of constitutional documents, shareholders’ registers, and beneficial ownership disclosures. 

• • Check any encumbrances or pledges on shares. 

Reputation & Market Standing 

• • Client feedback, industry reputation, regulatory credibility. 

• • Review media, litigation, or negative press risk. 

The due diligence report must be shared with the CBUAE in acquisition applications, so it needs high fidelity. 

Central Bank Approval: The Critical Gatekeeper 

Any acquisition or change in control in a licensed exchange requires prior approval from CBUAE. Here is how the process generally works: 

1. A Letter of No Objection from the Banking Supervision Department must be obtained for any person/company to merge, amalgamate, acquire, or enter into a joint venture with any other person, whether natural or juridical. 
2. The merger, acquisition, joint venture, or amalgamation is not permitted or cannot enter into any agreement to manage or to be managed by any other person, whether natural or juridical, without obtaining the Letter of No Objection from the Banking Supervision Department. All such management agreements must be in line with the UAE Laws and all applicable Regulations; and 
3. The person who is acquiring/merging or amalgamating is not permitted to transfer, rent/lease out the license for remuneration or otherwise to any other party, whether it is a natural or juridical person. 
4. Submit detailed buyer/owner information, including fit-and-proper credentials (integrity, experience, solvency). 
5. Provide source of funds documentation for the acquisition. 
6. The CBUAE assesses whether the acquisition threatens the stability, compliance posture, or integrity of the existing licensee. 
7. It reviews whether the buyer meets all regulatory criteria, including financial strength, track record, and suitability. 
8. If satisfied, the CBUAE issues an Approval In-Person, subject to conditions (e.g., capital top-up, remedial actions). 
9. The entity must satisfy those conditions and complete the handover. 
10. On satisfying conditions, the CBUAE approves the ownership change. 
11. The license is formally transferred or reissued under the new controlling ownership. 

Key caution: Operating the business before formal change approval can lead to penalties or non-recognition of the transfer. 

Structuring the Share Purchase Agreement (SPA) 

The SPA is the legal instrument that governs the acquisition. In a money exchange deal, it must incorporate regulatory safeguards and conditions unique to the sector. 

1. The acquisition must be conditional on CBUAE approval (i.e. no closing without it). 
2. Capital adequacy, compliance remediation, or contractual consents may also be conditions. 
3. Strong warranties around past AML compliance, undisclosed liabilities, and regulatory adherence. 
4. Indemnities that protect the buyer from material breaches in the transition period. 
5. A time cap for claims or a sliding scale for liability in light of regulatory sensitivities. 
6. Representations about the status of the licensee, contractual relationships, compliance, and authority to sell. 
7. Undertakings to maintain operations, avoid adverse actions, and assist in transition during the interim. 
8. A roadmap to transfer board control, management rights, and system access. 
9. Transition services by the seller (e.g., support in regulatory compliance, client handover, systems integration). 

A well-drafted SPA aligns incentives, mitigates risk, and provides clarity in regulatory approvals. 

Change of Control Procedures & Post-Acquisition Integration 

After closing, follow these essential steps: 

1. File the approved SPA and change-of-control instruments with the CBUAE as required. 
2. Update the corporate registry and internal filings (in onshore or relevant free zone jurisdictions). 
3. Revise the compliance program, control functions, internal audit, and training to reflect new ownership. 
4. Reaffirm the board of directors, compliance officers, and risk policies. 
5. Notify correspondent banks, clients, vendors, and service providers of the ownership change (if permitted under contracts). 
6. Ensure continuity of service and reassure business partners. 
7. Be ready for CBUAE post-change inspections or audits to verify compliance with conditions. 
8. Implement continuous monitoring to address any leftover compliance gaps. 

If any condition of Approval In Person is not met or regulatory issues emerge post-change, the CBUAE may reconsider or even revoke the license transfer. Diligence and strict execution in this phase are non-negotiable. 

Challenges, Risks & Mitigation Strategies 

Here are key risks and how to mitigate them: 

Successful acquisitions almost always depend less on negotiating price and more on managing these regulatory and compliance risks. 

Practical Checklist for Acquirers 

1. Pre-screen potential exchange targets for license status, compliance, and reputation. 
2. Sign confidentiality/non-disclosure agreements. 
3. Perform robust due diligence across regulatory, financial, operational, and governance domains. 
4. Engage with CBUAE early (pre-consultation) to vet buyer credentials. 
5. Draft SPA with regulatory conditions, escrow/deferred payments, and indemnities. 
6. Secure Approval In Person from CBUAE. 
7. Complete transition of ownership, management, and control. 
8. Apply for final approval and licensing transfer. 
9. Update internal governance, AML program, systems, and policies. 
10. Communication to stakeholders and continuous compliance monitoring. 

Acquiring a licensed money exchange in the UAE offers significant strategic and commercial upside—but only if done carefully and compliantly. The path involves meticulous due diligence, regulatory alignment, a carefully structured SPA, and strict execution of change-of-control and post-close integration. 

For investors eyeing this sector, the message is clear: success lies not in speed or cost alone, but in navigating the regulatory labyrinth with precision, foresight, and legal rigor. With the proper structure and guidance, acquiring an established exchange can accelerate market entry and set the stage for sustainable growth in the UAE’s vibrant cross-border payments environment.