Understanding Dubai’s New Contracting Law No. (7) of 2025

New Dubai Contracting Law: Understanding the Legal Framework of Contracting Activities in Dubai under Law No. (7) of 2025

In a strategic move to enhance Dubai's position as a leading global hub, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, in his capacity as Ruler of Dubai, has issued Law No. (7) of 2025.

This law marks a new era of regulation and professionalism in the contracting sector. It represents a significant legislative shift in how the construction industry will operate across Dubai, including in free zones and special development areas like the Dubai International Financial Centre (DIFC).

Aims and Vision of the Law

The law aims to elevate the efficiency, transparency, and professionalism of the contracting sector to align with Dubai's ambitious urban and economic development plans. It applies to all contractors operating in the Emirate, with exceptions for certain airport-related activities or those exempted by the Executive Council.

Key Features of the New Law

Mandatory Contractor Registry

A unified electronic system, known as the "Contractor Register," will be established under the management of Dubai Municipality. All companies must register their details in this system, which will be linked to the "Invest in Dubai" platform to streamline procedures.

Professional Classification System

Contractors will be categorized into specific classes based on their financial, technical, and administrative capabilities, with minimum requirements for qualified personnel.

Licensing and Compliance

It is now strictly prohibited for any entity or individual to engage in or market contracting work without a valid trade license and registration in the official Contractor Register.

Professional Competency Certificates

Engineers and technicians working for contractors are now required to obtain a certified "Professional Competency Certificate" from the relevant authority.

Code of Conduct and Ethics

Contractors must adhere to a new code of conduct to be issued by the committee overseeing the law's implementation. This code includes detailed obligations regarding safety, record-keeping, and restrictions on subcontracting.

Oversight, Penalties, and Judicial Supervision

The law imposes strict administrative penalties on violators to ensure full compliance with its provisions:

Financial Fines

Fines range from AED 1,000 to AED 100,000 and are doubled for repeat offenses within one year, up to a maximum of AED 200,000.

Escalating Measures

These include downgrading a contractor's classification, suspension from work for up to one year, and, in cases of serious violations, cancellation of their registration and trade license.

Judicial Powers

Employees from Dubai Municipality and other authorities will be granted judicial powers to inspect sites and take necessary action against violators.

Transition and Compliance Period

All contractors currently operating in Dubai have a one-year grace period to align their status with the new law's provisions, starting from its effective date (six months after its publication in the Official Gazette). This means full compliance must be achieved by early 2026.

A Look at the New Landscape

Law No. (7) of 2025 is a decisive step toward elevating Dubai's construction sector to global best practices. By mandating registration, professional classification, digital integration, and strict oversight, the law raises the standards for entry and competition in the contracting market.

This legislative reform serves the strategic objectives of the Dubai government by:
- Protecting investors and project owners from unqualified contractors.
- Ensuring that urban development projects are executed by licensed and capable entities.
- Promoting transparency, safety, and sustainability in line with the Dubai 2040 Urban Master Plan.

Written by:

Mahmoud Khashaba | Alhajeya Alnoobi Advocates & Legal Consultants