Introduction
His Highness Sheikh Mohammed bin Rashid Al Maktoum issued Law
No. 7 of 2025 regarding the regulation of contracting activities in
the Emirate of Dubai, as part of the Government of Dubai's
ongoing efforts to enhance the legislative framework of vital
economic sectors, in line with and continuing Dubai's
pioneering vision and its commitment to exceeding global best
practices.
This law represents a qualitative step toward strengthening the
legal and governance framework of the contracting sector in Dubai.
It establishes a unified regulatory system to control the practice
of contracting activities and lays down clear standards and
criteria for classifying companies and evaluating their
performance. These standards are tailored to each contractor's
financial, technical, and administrative capacities and experience,
ensuring the highest levels of quality and professionalism are
applied. The law also addresses inconsistencies in regulatory
requirements among competent authorities, free zones, and special
development areas.
Furthermore, the law reinforces the principle of transparency within the Emirate and plays a key role in enhancing coordination among the various competent authorities involved in the contracting sector. This supports Dubai's developmental journey and aligns with the Emirate's economic growth, urban expansion, and compliance with building, planning, and urban development standards.
Objectives of the Law
The law aims to:
- Strengthen the role of the contracting sector in Dubai's developmental and urbanization efforts.
- Improve the efficiency of contractors and regulate the profession according to top global standards.
- Encourage investment by removing obstacles for investors.
- Promote integration with urban and planning legislation to ensure safe and efficient project execution.
Overview of the New Law
Law No. 7 of 2025 becomes effective six months after its
publication in the official gazette.
The law applies to:
- All contractors operating in Dubai, including special development zones and free zones, such as the Dubai International Financial Centre.
- All types of contracting activities, except for those related to airports and associated infrastructure or any activity excluded by decision of the Chairman of the Executive Council of Dubai.
The law outlines the responsibilities of Dubai Municipality, including:
- Creating and managing a unified electronic system across the Emirate, linked to the "Invest in Dubai" platform, to enable the registration, evaluation, and classification of contractors.
- Establishing and managing the contractor registry, which includes data on licensed activities, classification, technical staff, and other relevant information.
- Preparing a Code of Ethics and Conduct for contracting activities, to be submitted to the competent committee for approval.
- Classifying and certifying contractors engaged in building, construction, and demolition activities, and issuing professional competency certificates to technical personnel.
The law also sets out conditions for registering contractors, the procedures and duration of registration (one year, renewable), and situations where a contractor's registration may be cancelled.
Contractor Obligations
Key obligations include:
- Compliance with applicable laws in Dubai, especially those related to construction, planning, environment, health, and safety.
- Meeting classification standards throughout the classification period.
- Avoiding the use of unregistered or uncertified personnel.
- Abiding by the scope of licensed activities and assigned classification tier.
- Not undertaking projects that exceed financial, technical, or manpower capabilities.
- Personally executing work using in-house technical staff, unless authorized to subcontract with prior approval.
The law allows for subcontracting and forming contractor alliances for large-scale projects, provided that conditions are met such as client and authority approval, valid registration of all participating contractors, and project scope justification.
Additionally, the Director General of Dubai Municipality is authorized to issue decisions—coordinated with competent authorities—defining:
- Procedures for registration and renewal of technical staff.
- Validity periods for registrations.
- Conditions for temporary suspension, deletion, or re-registration.
- Technical staff obligations.
Legislative and Legal Context
The law mandates the formation of a permanent committee called the Committee for the Regulation and Development of Contracting Activities, chaired by a Dubai Municipality representative and comprising members from relevant authorities.
The committee's responsibilities include:
- Approving contracting activities in Dubai and assigning regulatory oversight.
- Overseeing implementation of the law and related decisions.
- Proposing policies and legislation to organize the sector.
- Resolving disputes between regulatory bodies.
- Approving the Code of Ethics and coordinating with stakeholders.
- Reviewing recommendations from competent authorities and taking appropriate actions.
Key Legal Provisions
Without prejudice to stricter penalties in other legislation, violators of this law or its implementing regulations may face:
- Fines ranging from AED 1,000 to AED 100,000.
- Doubled fines for repeat violations within one year, up to a maximum of AED 200,000.
Additional penalties may include:
- Temporary suspension (up to one year).
- Downgrading of contractor classification.
- Deregistration of the contractor (upon committee approval).
- Suspension or cancellation of professional certification for technical personnel.
Compliance Period
All contractors operating in Dubai at the time of enforcement
must regularize their status within one year from the effective
date of the law. The committee may extend this grace period if
necessary.
If a contractor's registration expires during the compliance
period, renewal will be permitted provided a written commitment is
submitted confirming that the contractor will fulfil the new legal
requirements within the specified timeframe.
Practical Implications and Legal Recommendations
- Expected Sectoral Impact
- Enhancing Market Competitiveness:
Mandatory classification will raise entry standards and exclude non-qualified contractors, improving quality and encouraging competitive, skilled participants. - Regulatory Unification:
The law resolves jurisdictional fragmentation between mainland, free zones, and special areas, enabling centralized coordination and faster processing. - Real-Time Monitoring and Accountability:
Through the integrated electronic system, regulatory bodies can oversee contractors' activities, ensuring timely intervention when needed. - Boosting Technological Transformation:
The digital platform linked to "Invest in Dubai" promotes automation, reducing bureaucratic delays and increasing transparency. - Facilitating Strategic Collaborations:
Provisions on alliances for large projects encourage joint ventures and specialization, improving project execution at scale.
- Anticipated Challenges
- Awareness and Preparedness:
Smaller contractors may lack understanding of the new requirements and struggle with administrative readiness. - Compliance Burden:
Some contractors may find it difficult to align with the law's financial, technical, and classification criteria within the stipulated timeframe. - Operational Transition:
Adapting legacy contracting models to meet the new ethical, administrative, and technical standards may involve restructuring.
- Legal and Professional Recommendations
- Training and Outreach:
Stakeholders, especially SMEs, should undergo legal awareness programs and technical workshops to facilitate smooth registration and classification. - Contractual Adjustments:
Companies should review existing contracts and procurement practices to ensure they align with the law, especially regarding scope, liability, and subcontracting. - Engagement with Legal Counsel:
Law firms will play a crucial role in: -
- Advising on registration, appeals, and compliance.
- Representing clients before the regulatory committee.
- Mitigating legal risks arising from penalties or suspension decisions.
- Promoting Corporate Transparency:
Contractors should adopt clearer internal documentation, including financial disclosures and workforce records, to improve classification rankings and avoid penalties.
Conclusion
Law No. 7 of 2025 concerning the Regulation of Contracting
Activities in the Emirate of Dubai constitutes a progressive
legislative framework that enhances institutional governance and
legal organization within this vital sector. It aligns with
Dubai's vision of establishing the highest standards of
excellence and quality across all areas of development.
The law ensures the unification of rules and regulatory controls
governing the practice of contracting activities through the
adoption of clear mechanisms for registration, classification, and
oversight. It guarantees that contractors adhere to professional
and technical standards and conditions, thereby contributing to
improved sectoral efficiency, a safe and sustainable operational
environment, and alignment with applicable planning and urban
development legislation.
It also represents a strategic step toward consolidating an
attractive and well-regulated investment environment. With active
compliance and cooperation from all stakeholders, the law supports
Dubai's ongoing economic and urban development journey in
accordance with global best practices and ensures the continuity of
growth based on clear and equitable legal foundations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
