Dubai’s Law No. 7 of 2025: Transforming the Contracting Sector in the Emirate

Dubai has issued a new law, Law No. 7 of 2025, regulating contracting activities in the Emirate.

The new law sets out a unified regulatory framework for contractor classification, oversight, transparency and accountability, supporting Dubai’s goals for sustainable growth. It also aligns with the emirate’s building codes, planning regulations, and long-term development strategy.

The law will come into force six months after its publication in the Official Gazette, placing its likely effective date in late 2025. Upon its enactment, there is a one-year grace period during which all contractors operating in Dubai must comply with the law’s provisions.

Law No. 7 applies to all contractors operating in Dubai, including entities within special development zones and free zones, such as the Dubai International Financial Centre (DIFC). Notably, the law allows for exemptions from its scope, particularly for contracting activities related to airports and their associated infrastructure, as well as for any other activities exempted by a decision of the Executive Council of Dubai.

A key provision of the law is the establishment of the ‘Contracting Activities Regulation and Development Committee’, which will be formed by the Executive Council of Dubai. The committee, chaired by a representative from Dubai Municipality, will include members from government authorities and entities concerned with contracting activities. The committee will be responsible for approving contracting activities in Dubai, identifying entities responsible for supervising each activity, overseeing the implementation of the law, proposing new policies and legislation for the sector, and resolving any jurisdictional disputes that may arise between regulatory entities.

Central to the new framework is the establishment of a unified Contractor Register, managed by Dubai Municipality and integrated into the Invest in Dubai digital platform. Contractors must now register and operate strictly within their approved classification and capacity. Contractors are prohibited from exceeding their technical or financial limits or subcontracting without prior approval.

Furthermore, technical personnel must obtain a professional competency certificate to validate their qualifications. This credentialing requirement ensures that only qualified professionals participate in complex construction activities.

Failure to comply with Law No. 7 carries significant penalties. Initial violations may incur fines between AED 1,000 to AED 100,000, doubling to AED 200,000 for repeat infractions within a year. More severe consequences include suspension of contracting activities, downgrading of classification status, removal from the official registry, revocation of commercial licenses, and suspension or de-registration of technical staff and revocation of their professional certificates. This shift signals a move from voluntary compliance to formalized, enforceable regulation.

The new law comes after the Dubai Municipality announced a significant update to its Contractor and Engineering Consultancy Rating System, set to come into force in early 2026, which aims to provide a more integrated and comprehensive method of evaluating the performance of construction companies and engineering consultancies across the Emirate.

The new enforcement climate and upcoming regulatory changes represent a strategic step towards a transparent and resilient construction ecosystem in Dubai.

Construction companies operating in Dubai should consider the following actions to prepare for compliance with the new law:

• undertake a comprehensive internal audit of current regulatory compliance;
• formalise subcontracting arrangements, ensuring they meet approval standards;
• ensure technical staff meet certification requirements for competency; and
• develop internal compliance mechanisms to track progress throughout the grace period.

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