Dubai: Sheikh Mohammed Issues New Law To Regulate Contracting Sector

Dubai Ruler Sheikh Mohammed bin Rashid Al Maktoum has issued a new law to regulate contracting activities across the emirate, Dubai Media Office said.

Law No. 7 of 2025 aims to unify standards and practices within the contracting sector, laying down a clear framework for classifying contractors based on their expertise, qualifications, and capabilities.

The law also outlines rules for contractor registration. Contractors must comply with all relevant legislation and operate within their approved classification and capacity. They are prohibited from exceeding their technical or financial limits or subcontracting without prior approval.

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The move is designed to enhance transparency, streamline coordination between relevant authorities, and better align the sector with Dubai's rapid urban and economic development.

A key feature of the new law is the creation of the Contracting Activities Regulation and Development Committee, chaired by a representative from Dubai Municipality. The committee will include members from relevant government entities and will be tasked with approving contracting activities.

The committee will also assign supervising authorities, oversee law implementation and resolve jurisdictional conflicts that may arise between regulatory entities.

It will also adopt a sector-wide code of ethics will work closely with public and private stakeholders as well as review recommendations submitted by concerned authorities.

The law applies to all contractors in Dubai, including those operating in special development zones and free zones such as the Dubai International Financial Centre (DIFC). However, contracting activities related to airport infrastructure and other exempted projects, based on the committee's recommendations, will not fall under its scope.

Dubai Municipality was assigned to establish and manage an integrated electronic registry for all contracting activities in the emirate. This system will be linked to the 'Invest in Dubai' platform and serve as the central registry for contractors.

The municipality is also responsible for developing a code of conduct for the industry, categorising contractors by field - such as construction, building, and demolition - and issuing professional competency certificates to technical personnel.

Violations of these provisions can result in fines ranging from Dh1,000 to Dh100,000, while repeated infractions within a year may double penalties up to Dh200,000.

Violators may also face further penalties, including temporary suspension from contracting activities for up to one year, downgrading of their classification, removal from the official contractor registry, and cancellation of their commercial licence. In addition, technical staff involved could be suspended or deregistered, with their professional certificates subject to revocation.

All contractors operating in Dubai at the time the law comes into effect are required to regularise their status within a year. This period may be extended by the Committee for another year, if necessary. Those with expiring registrations in that period will be allowed to renew after signing a declaration to comply with the law.

This update comes after the Dubai Municipality recently announced a major update to its 'Contractors and Engineering Offices Evaluation System'.

Set to take effect in early 2026, the revised system introduces more precise performance standards and evaluation criteria - bolstering professional and ethical norms, and ensuring safer, more efficient construction projects.

As part of this effort, two engineering consultancy firms have been suspended for six months after violating regulations and ethics, posing risks to property owners and developers. The action was taken by the municipality's Professional Practice Registration and Licensing Committee.

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