Understanding Dubai’s New Regulatory Framework for Contracting Activities

On 8^th July, 2025, Dubai issued a new law named the “Law Regulating the Practice of Contracting Activities in the Emirate of Dubai Law No. 7/2025”, which is said to take effect on 8^th January, 2026, six months after its publication. Pursuant to Article 3, this Law aims to develop the contracting sector, regulate practices according to global standards, attract investment, and ensure projects comply with urban planning and safety regulations.

This law marks a significant advancement in reinforcing the legal and regulatory structure of Dubai’s contracting sector. It introduces a cohesive framework to oversee contracting practices and sets out defined standards and benchmarks for company classification and performance assessment. These standards are customised to each contractor’s capabilities and experience, ensuring top quality and professionalism. The law also resolves regulatory inconsistencies across authorities, free zones, and special development areas.

All local and international contractors are required to register under the new regulatory system. The contractors are strictly forbidden from operating beyond their licensed technical or financial limits or subcontracting tasks without prior written consent. Contractors must also comply with ongoing obligations such as maintaining accurate records, submitting periodic updates, and cooperating with digital audits.

What is covered under this law?

Under the provisions of this law, all contactors operating across the Emirate of Dubai. This includes the special development zones and free zones, including the Dubai International Financial Centre (DIFC).

This Law applies to all contracting activities, with an exception of:

i. Contracting activities related to airports, their infrastructure, and associated facilities.

ii. Contracting activity decided to be exempted from the provisions of this Law by a decision of the Chairman of the Executive Council based on the Committee’s recommendation.

This Law has established a new Committee for Regulating and Developing Contracting Activities, which will be chaired by a representative from the Municipality and include members from the Competent Authorities and other relevant entities in the Emirate. This multi-sector body will:

a. Approve contracting activities in Dubai and define the Competent Authority responsible for supervising each of these activities in accordance with the legal jurisdiction assigned to each entity.

b. Oversee the application of the provisions of this Law and the resolutions issued thereunder.

c. Propose policies and legislations regulating the practice of contracting activities, and submit them to the Competent Authorities in Dubai for necessary action.

d. Resolve any disputes that may arise between the Competent Authorities by virtue of their supervision of contracting activities in Dubai.

e. Approve the code of conduct and ethics for practicing contracting activities in Dubai.

f. Determine the requirements, solutions, and guarantees to be taken to address the consequences and effects resulting from the cancellation or striking off of a contractor’s registration from the Register, their temporary or permanent cessation of contracting activities, or the reduction of their classification category.

g. Coordinate with various public and private entities on all matters related to the practice of contracting activities in Dubai.

h. Study recommendations and proposals submitted by the Competent Authority concerning the advancement of the contracting sector in Dubai, and issue directives as it deems appropriate.

i. Define the tasks, and seek assistance from experts and specialists as it deems appropriate, form sub-committees and permanent and temporary working groups, provided they do not have a counted vote in its deliberations.

j. Any other tasks or powers necessary to achieve the objectives of this Law, as assigned by the Chairman of the Executive.

A violation or breach of this law can lead to fines ranging from 1,000 to 100,000. If the same violation is repeated within one year, the penalties may possibly be doubled, reaching up to 200,000. In addition to fines, violators may face further consequences such as temporary suspension from contracting activities for up to one year, downgrading of their classification, removal from the official contractor registry, cancellation of their commercial license, suspension or deregistration of technical staff involved and revocation of professional certificates.

All contractors operating across Dubai have been given one year from the date of enforcement of this law for the purpose of regularising their status. The Committee grants extensions for an extra year, if felt necessary. During this period, contractors with expiring registrations may renew them after submitting a declaration of compliance with this new law.

This Law provides contractors with procedural safeguards against adverse regulatory actions. When measures such as licence suspension, classification downgrade, or other administrative actions are imposed, affected contractors may submit a formal grievance to the official of the Competent Authority. This process ensures that regulatory decisions are reviewed within specified timelines, thereby reinforcing due process and accountability in the contracting sector.

The Law also requires Dubai Municipality to establish and manage a centralised digital registry for contractors. This will consolidate important information regarding contractors’ licensing status, classification category and permitted activities, and will be fully integrated with the Invest in Dubai platform. The unified digital system is intended to enhance regulatory oversight and provide investors and stakeholders with streamlined access to verified, current contractor information.

Conclusion:

Dubai Law No. 7 of 2025 represents a decisive step towards unifying the regulation of contracting activities across the Dubai. By introducing this legislation, clear classification standards, enhanced compliance obligations, and digital oversight mechanisms, the Law strengthens professionalism, transparency, and accountability within the sector.

As Dubai continues to position itself as a global hub for infrastructure development and investment, this Law lays the groundwork for a more resilient, efficient, and investor-friendly contracting ecosystem. In the long term, the combined emphasis on quality, ethical conduct, digital integration, and due process is anticipated to enhance confidence among investors, regulators, and project stakeholders alike thereby supporting Dubai’s broader urban development and future economic growth objectives.

• Construction Law UAE
• Contracting Law Dubai
• Contractor Compliance
• Dubai Law No 7 of 2025
• Dubai Municipality

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