Dubai has introduced a major overhaul to the way contracting activities are governed through Law No. 7 of 2025, published on 8 July 2025. The law takes effect on 8 January 2026, creating a unified regulatory framework that applies across the Emirate, including free zones and the DIFC.

At its core, the law reshapes how contractors are licensed, classified, monitored, and held accountable, supported by a new digital system integrated with the Invest in Dubai platform.

Who Falls Under the New Framework

The regulation casts a wide net. It applies to:

• All contractors operating anywhere in Dubai
• Engineers and technicians working for contracting firms
• Public and private entities procuring contracting services

Airport-related contracting activities remain exempt, and additional exemptions may follow at the discretion of the Executive Council based on recommendations from the newly established regulatory committee.

Key Structural Changes Introduced a Mandatory Licensing and Registration Regime

Contractors must now hold:

• A valid commercial licence
• Registration on Dubai Municipality’s new electronic register
• A classification that matches their authorised scope of work
• Technical staff equipped with formal Professional Competency Certificates

The emphasis is on ensuring capability, accountability, and transparency before firms can operate or even market their services.

A Single Digital System for the Entire Sector

All procedures, registration, classification, amendments, certificates, and cessation of activities, move to one emirate-wide online platform.

Dubai Municipality will run the register, issue competency certificates, set the classification structure, and prepare the code of conduct. Other authorities will supervise performance, investigate complaints, and enforce compliance.

A Central Committee to Shape Sector Direction

A new Committee for Regulating and Developing Contracting Activities will:

• Approve contracting activities
• Resolve supervisory disputes
• Set the criteria for cancellations, upgrades, or reclassification
• Recommend policy and legislative changes
• Approve the code of conduct

Sub-committees may be created for specialised areas, signalling a far more coordinated regulatory approach than before.

Eligibility, Classification, and Conduct Requirements

Contractors must remain fully independent from engineering consultancy offices and satisfy prescribed requirements on staffing, qualifications, experience, and fees.

Registration is granted for one year and can be renewed. New firms begin at the lowest classification unless they meet higher benchmarks. Authorities retain the ability to reclassify entities based on compliance behaviour.

Contractors must also:

• Follow all building, safety, environmental, and planning laws
• Employ only certified technical staff
• Supervise subcontractors closely
• Notify authorities of structural or operational changes
• Adhere to the code of conduct
• Retain project documents for 10 years after the completion certificate

Subcontracting, consortia, and turnkey contracting are allowed, but subject to pre-approval and detailed conditions that will be set by the competent authorities.

Sanctions and Regulatory Enforcement

Penalties for non-compliance range widely:

• Fines from AED 1,000 to AED 100,000
• Up to AED 200,000 for repeat violations
• Suspension, downgrading, or cancellation of registration
• Revocation of the commercial licence
• Suspension of competency certificates

Designated officials now hold judicial seizure powers to inspect records and premises, supported by the police where required, signalling a significant increase in enforcement capability.

Grievances and Transition Timeline

Affected parties may file grievances within 30 days of any adverse decision.
Existing contractors must regularise their status within one year from the law’s effective date, with the possibility of extension. Registrations expiring during the transition period may be renewed if the contractor commits to rectification.