Ultimate Guide to Data Retention Policies in 2025

Data retention policies are now mandatory for businesses to comply with global laws like GDPR and UAE PDPL. These policies dictate how long data is stored, when it must be deleted, and how to securely dispose of it. Non-compliance can result in penalties reaching millions of dollars, such as AED 5 million under UAE PDPL or up to $28 million in free zones like ADGM. Here's what you need to know:

• Key Laws: GDPR (global), UAE PDPL (Federal Decree-Law No. 45 of 2021), and sector-specific rules (e.g., healthcare, finance, technology).
• Retention Periods: Vary by sector (e.g., healthcare records: 25 years; financial data: 5 years).
• Compliance Requirements: Explicit consent is critical under UAE PDPL, along with maintaining a Record of Processing Activities (RoPA).
• Fines: UAE PDPL fines go up to AED 5 million; ADGM fines can reach $28 million.
• Best Practices: Automate retention processes, train employees, and review policies regularly.
• Technology: Tools like Customer Data Platforms (CDPs) and AI-powered systems help manage retention schedules, deletion, and compliance.

Data Retention Policies | Exclusive Lesson

Legal Requirements for Data Retention

Global Standards and UAE PDPL

The UAE Personal Data Protection Law (PDPL), introduced through Federal Decree-Law No. 45 of 2021, sets the framework for handling and retaining personal data across mainland UAE. Under this law, organisations are prohibited from holding personal data beyond its intended purpose. However, there’s an exception - data can be retained indefinitely if it is anonymised using an approved Anonymisation Mechanism.

Unlike the GDPR, which allows multiple legal bases for data processing (such as legitimate interest), the UAE PDPL places a strong emphasis on explicit consent as the primary legal basis. This makes consent a cornerstone of compliance in the UAE. Article 7 of the PDPL requires data controllers to maintain a Record of Processing Activities (RoPA), which must include details like processing durations, storage limits, and data deletion protocols. Data processors, on the other hand, are obligated to process data only for the specified duration and to erase it once that period ends.

The penalties for non-compliance are hefty. Under the PDPL, fines can go up to AED 5,000,000 (around $1.36 million). In free zones like the Abu Dhabi Global Market (ADGM), which follows a GDPR-aligned regime, fines can soar to $28,000,000. Meanwhile, the Dubai International Financial Centre (DIFC) imposes penalties ranging from $10,000 to $100,000 per violation.

Recent cases highlight the enforcement of these penalties. For example, in May 2024, the ADGM Commissioner of Data Protection fined Okadoc Technologies Limited $20,000 for failing to comply with a data subject’s access request and for lacking sufficient technical safeguards under Articles 10 and 29 of the ADGM Regulations. Similarly, in June 2023, Venture Rock Global Limited faced formal action for breaches of Articles 22 and 30, which were attributed to human error stemming from weak cybersecurity measures.

These legal foundations set the stage for sector-specific data retention rules, which are outlined below.

Industry-Specific Retention Guidelines

Different industries in the UAE have specific regulations governing data retention, tailored to their operational needs.

In the healthcare sector, Federal Law No. 2 of 2019 mandates that medical files and electronic health records be retained for at least 25 years. Additionally, all health data must be stored and processed within the UAE unless an explicit exception is granted by the relevant Health Authority.

In finance, licensed entities such as banks, retail payment providers, and stored value facilities must securely retain personal data and transaction records for at least 5 years. The UAE Central Bank’s Consumer Protection Standards further require these institutions to implement robust Data Management Control Frameworks and ensure that data collection serves lawful purposes. Moreover, card schemes are obligated to notify the UAE Central Bank of any data breaches within 72 hours.

The technology and IoT sector is subject to specific requirements from the Telecommunications and Digital Government Regulatory Authority (TDRA). Service providers must register with the TDRA and ensure that sensitive and confidential data - whether personal or governmental - is stored within the UAE. Additionally, the DIFC has introduced amendments under Regulation 10 to govern autonomous and semi-autonomous systems, requiring transparency and risk assessments for AI-driven data processing.

Here’s a summary of key regulations by sector:

For businesses operating in multiple sectors or jurisdictions, compliance can become complex. For instance, entities in the DIFC and ADGM follow their own data protection frameworks, which are closely aligned with the GDPR, and these differ from the federal PDPL. This means businesses must carefully assess whether they fall under federal law or specific free zone regulations, as the compliance requirements and penalties vary significantly. Navigating these frameworks is critical for developing a strong and compliant data retention policy that aligns with both local and sector-specific rules.

How to Develop a Data Retention Policy

Creating a data retention policy involves a thoughtful process that ensures compliance with legal requirements while maintaining operational efficiency. It starts with understanding the types of data your organisation holds, determining how long each category should be retained, and setting up secure methods for both storage and disposal. A detailed retention schedule is crucial for adhering to UAE regulations. Here’s a step-by-step guide to help you craft a policy that aligns with both legal and business goals.

Identify and Classify Data

The first step is to perform a thorough inventory of all the data across your organisation. Categorise this data into groups such as Business, HR, Customer, and Operational records. This inventory serves as the backbone of your retention policy.

Once the data is collected, classify it based on three key factors: sensitivity, business value, and regulatory requirements. For example, under UAE PDPL Article 1, you must differentiate between Personal Data, Sensitive Personal Data, and Biometric Data. Customer email addresses fall under personal data, while medical records or financial details are classified as sensitive data, requiring stricter safeguards. Automated tools can help tag records with retention dates, ensuring they are removed when no longer needed.

Assigning clear ownership for each data category is equally important. Designate a responsible team member to maintain the retention schedule and oversee compliance. This not only ensures accountability but also prevents unnecessary data storage, which can lead to higher costs.

Define Retention Schedules

Retention schedules should be documented in line with UAE PDPL Article 5, prioritising the strictest legal requirement and business needs. For instance, financial records are often required to be kept for seven years. Similarly, active contracts should be stored for their duration plus seven years to comply with statutory limitations. Employee records must also be retained for seven years after termination, as per labour laws and EEOC guidelines.

According to UAE PDPL Article 5, personal data should only be stored for a specific purpose and must be deleted once that purpose is fulfilled unless the data is anonymised. If multiple laws specify varying retention periods for the same data, always apply the longest period and document the reasoning behind this decision. Additionally, organisations are required to maintain a Record of Processing Activities (RoPA), which includes details about data categories, authorised personnel, processing durations, and the methods for modifying or erasing data.

Be prepared for situations where normal deletion schedules need to be paused, such as during legal disputes, government investigations, or regulatory audits. These are known as legal holds, and your policy should outline how to handle them. Furthermore, under UAE PDPL Article 13, data subjects have the right to know how long their data will be stored, so this information should be communicated clearly.

Once the retention periods are defined, the focus shifts to secure storage and proper disposal methods.

Set Up Secure Storage and Disposal Procedures

During the retention period, data must be protected against unauthorised access. Encrypt digital records to enhance security. For physical documents, consider scanning them into electronic systems and securely destroying the originals using cross-cut or micro-cut shredders to minimise risks like tampering or loss.

When the retention period ends, ensure expired data is securely removed from active systems, archives, and backups. Use secure deletion methods that permanently erase the data. For large datasets or devices that cannot be physically destroyed, deleting encryption keys can render the data inaccessible. Any electronic devices awaiting destruction should be stored in locked, restricted areas with access logs to prevent leaks.

If certain records cannot be permanently deleted due to system limitations, move them to a restricted area where they are inaccessible to general users. When outsourcing disposal tasks to third parties, always obtain certificates of destruction and maintain audit rights. Regularly reviewing and purging outdated or unnecessary information ensures your policy remains effective and compliant. These routine checks also help refine storage and disposal procedures over time.

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Data Retention Best Practices in 2025

Creating an effective data retention policy requires a blend of automation, employee training, and regular policy reviews. When done right, this approach can reduce storage costs by 40–60% while maintaining compliance. Let’s break down how these elements work together in a cohesive strategy.

Automate Data Retention Processes

Did you know that 90% of organisational data is unstructured? Manually sorting through and managing such vast amounts of data is next to impossible. This is where automation steps in. AI-powered tools can identify, tag, and classify data across platforms, applying retention periods based on how sensitive the content is.

Automation also brings efficiency to the deletion process. For instance, cryptographic erasure - deleting encryption keys to make data permanently inaccessible - is a key feature of automated systems. Tim Herr, Brand Marketing Copywriter at Forcepoint, notes:

Encryption is the gold standard of data retention... Deleting the encryption keys causes the encrypted data to become permanently inaccessible.

Here’s how automated retention compares to manual processes:

Tools like Microsoft Purview simplify this process by applying retention policies across platforms such as Teams, SharePoint, and OneDrive. These systems can automatically notify users or delete data once the retention period ends, preventing unnecessary accumulation.

Train Employees and Assign Responsibilities

Technology alone isn’t enough - people play a critical role in ensuring data retention policies are followed. Clear responsibilities must be assigned and communicated to avoid lapses in compliance. Studies show that human error and inadequate training are common culprits behind enforcement failures.

To ensure consistency, assign specific roles to records managers, IT staff, and other employees. For example, having a dedicated team member oversee the retention schedule and deletion process can prevent data from lingering indefinitely. Role-based training is equally important. Data Loss Prevention (DLP) tools can provide just-in-time training to employees, reinforcing best practices when they’re most needed.

Review Policies Regularly

Regulations are always changing, and your data retention policies need to keep up. Take the UK Data (Use and Access) Act, which came into effect on 19 June 2025 - it requires organisations to review and update their automated retention schedules. This underscores the importance of conducting formal reviews at least once a year or whenever significant changes occur, such as new regulations, mergers, or system upgrades.

Regular reviews also help identify data that no longer serves a purpose, cutting storage costs and improving system performance. To stay ahead, organisations should add data retention and deletion reviews as a recurring agenda item in management or IT security meetings. Keeping a clear record of all policy versions is another smart move, as it demonstrates compliance to auditors and regulators. And when dealing with multiple legal requirements for the same dataset, applying the longest retention period and documenting the rationale ensures global compliance.

Technology for Data Retention Compliance

Technology has become a game-changer in simplifying compliance with data retention laws. By automating processes, modern tools significantly cut down on manual efforts. With the UAE’s Personal Data Protection Law (PDPL) now fully enforced, businesses need solutions that handle everything from scheduling automatic data deletions to maintaining the "special record" required under Article 7. New platforms have stepped in to automate these critical tasks, making compliance more manageable.

Using CDPs for Data Retention

Customer Data Platforms (CDPs) play a crucial role for businesses in the UAE managing personal data. These platforms centralise first-party data from departments like marketing, sales, and customer support into a single system. This is especially important because Article 5 of the UAE PDPL requires that personal data must not be retained once its processing purpose is fulfilled. CDPs handle this efficiently by automating retention schedules to either delete or anonymise data when it’s no longer needed.

CDPs also shine when it comes to handling data subject rights. For instance, Article 15 allows customers to request the complete erasure of their personal data. Without a CDP, locating and deleting every piece of a customer’s data across multiple systems can be a nightmare. Rob Tarkoff, Executive Vice President at Oracle Cloud CX and Oracle Data Cloud, explains:

Unifying customer data from different marketing and advertising systems is the only way brands will be able to eliminate blind spots and make every customer interaction matter.

CDPs can be tailored to meet industry-specific retention schedules while supporting anonymisation workflows for extended data use. This flexibility allows businesses to retain data for analytics while still complying with legal requirements. These platforms also track processing timelines, storage limits, and erasure protocols, creating the audit trails mandated by Article 7. By enhancing data governance, CDPs align well with earlier compliance strategies.

Features of Retention Management Tools

Advanced retention tools go beyond simple automation, offering comprehensive solutions for secure storage and compliance monitoring. For businesses operating in the UAE, these tools should include key features such as automated retention schedules that manage the entire data lifecycle. This includes classifying data, scheduling deletions, and sending alerts when records near their expiration dates. For instance, VAT records need to be kept for five years, corporate tax records for seven years, and real estate VAT records for 15 years.

AI-powered tools are now capable of turning complex policies into actionable steps and can even detect regulatory changes automatically. This is particularly important, as shown in June 2023 when the ADGM Commissioner of Data Protection issued a directive to Venture Rock Global Limited, citing data breaches caused by "human error from poor cybersecurity practices" and insufficient policies.

Security measures like encryption (both at rest and in transit), multi-factor authentication (MFA), and role-based access controls are non-negotiable. The financial risks are steep: ADGM regulations impose fines of up to US$28 million for violations, while DIFC penalties range from US$10,000 to US$100,000.

Integration is another critical factor. With the average business relying on 371 SaaS applications, retention tools must seamlessly connect with existing systems like HR, ERP, and CRM platforms. Additionally, these tools must support data residency requirements, ensuring data is hosted within UAE-based cloud centres. This is especially vital for sensitive data, such as health records, which generally cannot be stored outside the country. By incorporating these features, retention management tools provide a comprehensive solution for staying compliant with UAE regulations.

Conclusion

In 2025, data retention policies have become a cornerstone of strategic risk management and cost efficiency. By aligning with the UAE's PDPL and international standards, well-structured retention policies not only ensure compliance but also enhance operational efficiency. With strict regulations imposing hefty penalties and effective policies cutting down storage costs, proper data retention significantly reduces the risks associated with breaches by eliminating unnecessary data.

The sheer scale of modern data - about 2.5 quintillion bytes generated daily - has made manual management methods obsolete. This reality calls for automated systems capable of handling such volumes efficiently. Tools like Customer Data Platforms help centralise scattered data, simplify deletion processes, and maintain audit trails. As Mark Stone from Concentric AI aptly puts it:

A smart data retention policy acts as a strategic tool to manage risk, reduce costs, and strengthen your data governance.

Now is the time to embrace automated retention solutions to ensure compliance and unlock business value in 2025.

FAQs

How does the UAE PDPL differ from the GDPR in terms of data retention?

The UAE Personal Data Protection Law (PDPL) and the EU's General Data Protection Regulation (GDPR) approach data retention differently, particularly in two major areas:

• Retention Periods: The PDPL allows organisations to determine how long they retain data, as long as it’s necessary for the original purpose of collection. However, organisations must justify any extended retention. On the other hand, the GDPR enforces a stricter "storage limitation" principle, requiring organisations to set specific retention timelines and ensure data is deleted or anonymised once it’s no longer needed.
• Right to Erasure: While the PDPL permits individuals to request corrections or stop data processing, it doesn’t explicitly include a "right to be forgotten." In contrast, the GDPR provides individuals with the right to request complete erasure of their data if there’s no legal or legitimate reason to keep it.

These differences highlight how the PDPL gives organisations more leeway in managing data retention, whereas the GDPR enforces tighter controls and includes a defined right to erasure.

What are the best ways for businesses to automate their data retention processes?

To streamline data retention, businesses should begin by establishing a clear retention schedule. This schedule should specify how long different types of data need to be stored, based on legal obligations or internal business needs. Once defined, automation tools can be used to tag data with retention timelines and automatically initiate actions like archiving or deletion once those periods expire.

Platforms like Microsoft 365 come equipped with features that allow organisations to enforce retention policies across services such as Exchange, SharePoint, and Teams. Additionally, businesses should implement alert systems to track compliance and conduct regular reviews to ensure their policies align with regulations, such as GDPR or the UAE’s data protection laws. By integrating these tools into their existing workflows, companies can manage data efficiently, stay compliant, and significantly cut down on manual tasks.

What are the penalties for not complying with data retention laws in UAE free zones?

Non-compliance with data retention laws in UAE free zones can lead to hefty fines. Businesses may face penalties ranging from $10,000 to $50,000, depending on the seriousness of the violation. Within the Dubai International Financial Centre (DIFC), specifically, skipping the annual data assessment could result in fines of up to $25,000.

For companies operating in UAE free zones, keeping up with local regulations and ensuring their data retention policies align with legal requirements is crucial to avoid these penalties.