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To support the emirate's fast-growing construction sector, His Highness Sheikh Mohammed bin Rashid Al Maktoum has enacted Law No. 7 of 2025. It is a comprehensive piece of legislation that will redefine how contractors function within the emirate. The Dubai contractor regulation law is set to enforce uniformity, oversight, and elevated ethical standards across the industry.
Here's everything you need to know about the new contractor law Dubai 2025.
Dubai Contractor Regulation Law Update - An Overview
This Dubai construction law update applies to all contractors operating in the emirate, including those in free zones and special development zones such as the Dubai International Financial Centre (DIFC). However, infrastructure-related contracting, particularly airport development, may be exempt, pending recommendations from the new regulatory committee.
At the heart of the law is a mission to unify standards and practices. Contractors will now be classified according to expertise, qualifications, and capacity, and must operate strictly within their approved limits. Subcontracting without prior written approval is strictly prohibited, reinforcing a higher level of construction compliance in Dubai.
In tandem with the new law, Dubai Municipality recently unveiled a revamped Contractors and Engineering Offices Evaluation System, set to take effect in early 2026. The revised framework introduces precise performance benchmarks, bolsters ethical practices, and enhances construction safety. In a recent enforcement action, two engineering consultancy firms were suspended for six months after failing to meet regulatory and ethical standards, underscoring the municipality’s zero-tolerance policy.
Contracting Activities Regulation and Development Committee
In support of these reforms, the law introduces the Contracting Activities Regulation and Development Committee. It is a powerful new oversight body chaired by a Dubai Municipality representative. This committee is tasked with approving contracting activities, assigning regulatory authority, resolving jurisdictional disputes, and implementing a comprehensive code of ethics across the sector. Its collaborative framework will bring together key public and private stakeholders.
Formation of Centralized E-Registry System
According to the Dubai construction law update, Dubai Municipality has been directed to establish a centralized, integrated electronic registry. Linked to the Invest in Dubai platform, this e-registry will catalog contractors by field (e.g., construction, demolition) and issue professional competency certificates to qualified personnel. This digitization push forms a cornerstone of the emirate's modernization drive.
Under the Dubai contractor regulation law, all contractors are mandated to register in the new digital system and regularize their status within one year from the law’s enactment. The committee may extend this transition period by an additional year. Contractors with expiring licenses during this period can renew after signing a formal compliance declaration.
Penalties and Fines
Violations under the new contractor law will be treated with strict enforcement measures, supported by a tiered system of penalties designed to enforce compliance. Fines include:
- AED 1,000 to AED 100,000 for first-time offenses
- Up to AED 200,000 for repeated violations within a single year
Additional penalties may involve:
- Temporary suspension from contracting activities (up to one year)
- Downgrading of a contractor's classification
- Removal from the official contractor registry
- Cancellation of commercial licenses
- Suspension or revocation of technical staff's professional certificates
These provisions reflect a stricter phase of the UAE contractor regulations aimed at enhancing integrity, professionalism, and accountability across the construction sector.
Impact and Industry Significance of the New Law
The new contractor law Dubai 2025 represents more than a regulatory reform; it is a structural transformation of how the emirate builds its future. As Dubai continues its rapid urban expansion, the law aims to ensure sustainable, ethical, and high-quality development across all projects.
This law reinforces the city's commitment to world-class construction governance. For contractors, consultants, and developers, understanding and adhering to these regulations is not just mandatory but essential for continued participation in Dubai's booming construction ecosystem. The twin emphasis on digital integration and ethical oversight marks a definitive step forward in construction compliance in Dubai.
FAQs
It applies to all contractors operating in Dubai, including those in free zones and special development zones. Exceptions include certain infrastructure projects, such as airports, subject to committee recommendation.
The Contracting Activities Regulation and Development Committee will oversee implementation, approve activities, assign supervisory authorities, and enforce ethical standards.
Violators face fines (up to AED 200,000 for repeat offenses), suspension, downgrading, deregistration, and possible revocation of staff professional certificates.
Contractors must regularize their status within one year of the law’s enactment. The committee may grant a one-year extension.
The new law is broader in scope, introduces a centralized registry, and imposes tougher penalties.
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