Sheikh Mohammed Bin Rashid Enacts New Law Regulating Contracting Activities In Dubai

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has enacted Law No. (7) of 2025 to regulate contracting activities in Dubai. This law aims to enhance the emirate's legal framework for contracting, aligning with global standards and supporting sustainable growth.

The law introduces a unified regulatory framework for contractor classification, oversight, transparency, and accountability. It aligns with Dubai's building codes and long-term development strategy. A significant aspect is the formation of the ‘Contracting Activities Regulation and Development Committee’ by the Chairman of The Executive Council of Dubai.

This committee will be chaired by a representative from Dubai Municipality and include members from relevant government authorities. Its duties include approving contracting activities, identifying supervisory entities, overseeing law implementation, proposing new policies, resolving jurisdictional disputes, adopting a sector code of ethics, and coordinating with stakeholders.

The law covers all contractors in Dubai, including those in special development zones and free zones like the Dubai International Financial Centre. However, it excludes contracting activities related to airports or those exempted by The Executive Council's decision based on committee recommendations.

Dubai Municipality is tasked with creating an integrated electronic system for managing contracting activities linked to the ‘Invest in Dubai’ platform. This system will serve as a central registry for contractors. The municipality will also prepare a sector code of conduct, classify contractors involved in construction activities, and issue competency certificates to technical personnel.

The law mandates that contractors comply with relevant legislation and operate within their approved classification. They are prohibited from exceeding technical or financial limits or subcontracting without approval. Violations may result in fines between AED1,000 to AED100,000; repeat offenses can double fines up to AED200,000.

Penalties and Compliance Requirements

Additional penalties may include suspension from contracting activities for up to one year, downgrading classification, removal from the registry, cancellation of commercial licenses, suspension or de-registration of technical staff, and revocation of professional certificates.

Contractors active when the law takes effect must regularise their status within a year. This period can be extended by another year if needed. Contractors whose registration expires during this time can renew it by pledging compliance with the law's provisions within the specified timeframe.

Any existing legislation conflicting with this new law will be repealed. The law becomes effective six months after its publication in the Official Gazette.

With inputs from WAM