Dubai Unveils New Contracting Law to Standardize Construction

DUBAI, UAE – 12 July 2025 - Dubai has rolled out new law, introduced by His Highness Sheikh Mohammed bin Rashid Al Maktoum, to establish a comprehensive legal framework governing the emirate’s contracting sector. The legislation aims to elevate standards, streamline oversight, and align practices with global benchmarks.

Unified Regulatory Framework

The law introduces a centralized structure to classify contractors based on their technical and financial capacity. It enhances transparency, accountability, and coordination across regulatory bodies. A new Contracting Activities Regulation and Development Committee, chaired by Dubai Municipality, will oversee policy, supervise implementation, resolve disputes, and enforce ethics standards.

The law applies to all contracting firms in Dubai, including those in free zones and special development areas, except for specific exempted activities. A unified digital registry will be launched through the ‘Invest in Dubai’ platform, serving as the main portal for contractor classification, conduct codes, and registration services.

Compliance, Penalties & Enforcement

Contractors must register according to their designated classification and operate within approved technical and financial limits. Unauthorized subcontracting is strictly prohibited. Non-compliance can lead to fines ranging from approximately USD 270 to USD 27,200 (AED 1,000 to AED 100,000), with repeat violations escalating penalties up to around USD 54,400 (AED 200,000). Additional consequences may include license suspension, downgrade of classification, removal from the registry, and cancellation of professional permits.

Transition Period & Effectiveness

All contractors will have a one-year window to comply with the new law, extendable by another year if necessary. The law will take effect six months after its publication in the Official Gazette. Any conflicting older legislation will be repealed.

This legislation reflects Dubai’s ongoing efforts to modernize its construction sector by reinforcing governance, ensuring accountability, and promoting sustainable development. It is expected to improve investor confidence, reduce project disputes, and raise the overall quality of development across the emirate.