Dubai Launches Comprehensive Contracting Law to Strengthen Sector Governance
In a major regulatory development, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has issued Law No. (7) of 2025. This landmark legislation establishes a unified regulatory framework for contracting activities across the emirate, enhancing transparency, accountability, and alignment with Dubai’s long-term economic vision.
Why Dubai Introduced Law No. (7) of 2025
The contracting sector is a cornerstone of Dubai’s economy, directly impacting construction, real estate, and infrastructure development. Law No. (7) of 2025 was introduced to unify contractor classification, licensing, supervision, and ethical standards.
By aligning with international best practices, this law supports Dubai’s sustainable growth ambitions and ensures fair competition while safeguarding investor confidence.
Creation of the Contracting Activities Regulation and Development Committee
A central feature of the new law is the establishment of the Contracting Activities Regulation and Development Committee. Formed through a decision by the Chairman of The Executive Council of Dubai, this committee will be chaired by a Dubai Municipality representative and include members from relevant government bodies.
Key Responsibilities of the Committee:
- Overseeing implementation of Law No. (7) of 2025
- Determining regulatory authority for each contracting activity
- Proposing new policies and sector legislation
- Resolving jurisdictional disputes between regulatory bodies
- Developing a unified sector code of ethics
- Coordinating with public and private stakeholders
Scope and Exemptions Under the Law
The law applies to all contractors operating in Dubai, covering special development zones and free zones such as the Dubai International Financial Centre (DIFC).
Exemptions Include:
- Contracting activities related to airport infrastructure
- Activities exempted by the Executive Council based on committee recommendations
Digital Oversight System Implementation
Dubai Municipality is tasked with developing an integrated electronic system linked with the “Invest in Dubai” portal.
Key Features of the System:
- Central registry for all contracting activities
- Contractor classification (construction, building, demolition)
- Issuance of professional competency certificates
- Creation of a code of conduct for technical personnel
Contractor Requirements and Regulatory Compliance
Contractors must operate strictly within the limits of their approved classification and comply with all related legislation.
Prohibited Activities:
- Unauthorised subcontracting
- Exceeding approved technical or financial capacities
Penalties for Violations:
- Fines from Dhs1,000 to Dhs100,000
- Double penalties up to Dhs200,000 for repeat offenses within a year
- Suspension from operations (up to one year)
- Downgrading of contractor classification
- Removal from the official registry
- Cancellation of commercial licenses
- De-registration and revocation of professional certifications
Compliance Period and Enforcement Timeline
Contractors already operating in Dubai must regularise their status within one year of the law’s effective date. The committee may extend this period by an additional year if required.
Contractors with expiring registrations during the transition period can renew them by submitting a compliance declaration.
Effective Date and Repeal of Conflicting Laws
Law No. (7) of 2025 will take effect six months after its publication in the Official Gazette. Any previous legislation that conflicts with the new law will be annulled.
Conclusion
Dubai’s introduction of Law No. (7) of 2025 marks a strategic step towards enhancing the governance of its contracting sector. By establishing clear regulatory structures, digital oversight, and strict penalties, the emirate reinforces its commitment to sustainable development, investor confidence, and international best practices in construction and contracting activities.
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