Dubai's ruler, Mohammed bin Rashid, introduces a new regulation for the local contracting industry
In a significant move towards strengthening its construction and development industries, Dubai has enacted Law No. (7) of 2025. This new legislation, issued by Sheikh Mohammed bin Rashid Al Maktoum, aims to regulate contracting activities in the emirate, ensuring orderly, professionally managed, and sustainable growth.
The comprehensive law introduces a unified regulatory framework that aligns with Dubai's planning regulations, building codes, and long-term growth strategies. Dubai Municipality has been tasked with setting up an integrated electronic system for managing contractor registration, classification, and compliance, linked to the 'Invest in Dubai' platform.
Contractors in Dubai will now be classified based on their expertise, qualifications, and capabilities, with clear rules for registration and compliance with applicable legislation. They must operate within their approved classification and capacity, prohibiting exceeding financial or technical limits or subcontracting without prior authorization.
A central feature of the law is the formation of the Contracting Activities Regulation and Development Committee. Chaired by a Dubai Municipality representative, this committee includes members from relevant government entities. Its role is multifaceted, involving oversight and approval of contracting activities, assigning supervising authorities, monitoring and enforcing law implementation, resolving jurisdictional disputes between regulatory bodies, adopting a sector-wide code of ethics, coordinating with public and private stakeholders, and reviewing recommendations from involved authorities.
The law also includes penalties for non-compliance, such as fines, suspension, or downranking of contractors. Existing contractors in Dubai have one year to regularize their status after the law's enactment, which will take effect six months after its publication in the Official Gazette.
The new law is expected to have far-reaching implications for governance, transparency, and oversight in Dubai's construction and development sector. By standardising contractor classification and registration and mandating compliance within defined limits, the law reduces opacity in contracting activities and strengthens accountability.
The establishment of the Contracting Activities Regulation and Development Committee introduces a clear supervisory body responsible for implementation oversight and resolving regulatory conflicts, reducing fragmentation in governance. The law fosters better coordination between government entities involved in contracting, aligning regulatory efforts with Dubai’s accelerated urban and economic development goals.
Moreover, the law supports Dubai’s ambitions for sustainable growth and development by embedding international standards in contractor classification, regulation, and sector ethics. It aims to elevate the contracting sector’s quality, contributing to safer, more sustainable construction projects consistent with Dubai’s strategic vision.
In summary, Law No. (7) of 2025 represents a significant legislative advancement designed to strengthen governance, improve transparency, and enhance oversight in Dubai’s contracting sector. The law's institutional mechanisms and comprehensive framework are set to boost accountability and coordination within the emirate’s construction and development industries.
- The new legislation, complementing Dubai's development strategies in various industries, includes a unified regulatory framework for finance, business, and the construction industry.
- Under the newly formed Contracting Activities Regulation and Development Committee, the Dubai Municipality will oversee the implementation of these regulations, ensuring industry members adhere to professional standards and ethical codes, thereby strengthening Dubai's finance, business, and development sectors.
