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New Law in Dubai Regulating Contracting Activities
In a move set to reshape Dubai’s construction and infrastructure sectors, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister of the UAE, and Ruler of Dubai, has issued Law No. (7) of 2025 regulating contracting activities across the Emirate.
This landmark legislation introduces a comprehensive legal and governance framework designed to enhance contractor classification, licensing, ethical standards, and compliance mechanisms. It underscores Dubai’s commitment to sustainable urban development and transparent economic regulation.
Centralised Oversight Through a New Regulatory Committee
The law mandates the formation of the Contracting Activities Regulation and Development Committee, chaired by a representative from Dubai Municipality. The committee will include members from key government and regulatory entities involved in contracting and infrastructure oversight.
Its responsibilities include:
- Approving contracting activities and assigning supervisory authorities
- Monitoring law enforcement and implementation
- Recommending new policies and regulations
- Resolving disputes between regulatory bodies
- Establishing a sector-wide code of ethics
- Enhancing collaboration across public and private stakeholders
Digital Transformation Through a Unified Registration System
To operationalise the law, Dubai Municipality has been tasked with launching a centralised electronic system for all contracting activities in the emirate. This platform will integrate with the existing ‘Invest in Dubai’ initiative and serve as the primary registry for contractor classification and licensing.
The system will manage:
- Contractor registration and renewal
- Professional competency certification for technical staff
- Monitoring of compliance with capacity limits and subcontracting regulations
Scope and Applicability
The law applies to all contractors operating within Dubai, including those in free zones and special development zones such as the Dubai International Financial Centre (DIFC). However, it excludes contracting activities related to airports and other exempted infrastructure, as determined by the Executive Council upon recommendation from the new committee.
Strict Compliance and Enforcement Measures
To maintain the integrity of Dubai’s contracting ecosystem, the law sets out clear penalties for violations:
- Fines from AED 1,000 to AED 100,000
- Double penalties for repeat violations (up to AED 200,000)
- Potential suspension of operations, downgrading of contractor classification, and removal from the official registry
- Possible cancellation of commercial licenses and revocation of staff certifications
Transition Period for Existing Contractors
Contractors already operating in Dubai will be required to regularise their status within one year of the law’s effective date. This grace period may be extended by the committee if necessary. Contractors whose licenses expire during this window can renew them by submitting a formal undertaking to comply with the law.
A Legal Milestone for Dubai’s Contracting Sector
Law No. (7) of 2025 signals a pivotal shift in the regulation of Dubai’s contracting landscape. By enforcing transparent classification, ethical oversight, and strong governance, the law aims to promote sustainable infrastructure development while protecting stakeholders and maintaining market confidence.
How Al Kabban & Associates Can Help
As legal advisors to some of the UAE’s largest contractors and real estate developers, Al Kabban & Associates offers in-depth guidance on contractor classification, compliance strategies, and registration under the new law.
Whether you're seeking to regularise your contracting business or require legal support navigating Dubai’s evolving regulatory landscape, our firm is here to assist.
For more information or legal assistance, contact us at +971 4 453 9090 or visit www.alkabban.com.
You can also follow us on social media for more updates on everything law related in the UAE: @Alkabban_Law
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