This memo summarizes the key provisions of the new Dubai Law No. 7 of 2025, which establishes a unified regulatory framework for the contracting sector. The law aims to enhance governance, quality, and transparency, impacting all contracting entities operating in Dubai, including those in free zones. It will come into effect later this year, with a one-year grace period for existing contractors to ensure compliance.

Key Pillars of The New Law

1. Unified Regulatory Framework and a Centralized Committee: A cornerstone of the new law is the establishment of the "Contracting Activities Regulation and Development Committee." This centralized body, comprising representatives from key government entities, will be responsible for overseeing the implementation of the law, approving and classifying contracting activities, and developing policies to further advance the sector. This move is expected to eliminate regulatory overlaps and create a more cohesive and predictable legal landscape.

2. The "Contractor Register": The law mandates the creation of a comprehensive "Contractor Register" to be managed by the Dubai Municipality. This digital platform will serve as a central database for all licensed contractors in the Emirate, including those operating in free zones. Registration will be a prerequisite for undertaking any contracting work in Dubai.

3. A New Classification System: A tiered classification system for contractors will be introduced, categorizing companies based on their financial stability, technical capabilities, and past performance. This will ensure that projects are awarded to firms with the requisite expertise and resources, thereby enhancing the quality and safety of construction projects across the Emirate. Contractors will be prohibited from undertaking projects that exceed their designated classification.

4. Professional Competency and Accountability: To ensure the highest levels of professionalism, the law requires all technical staff, including engineers and project managers, to obtain professional competency certificates. This measure aims to guarantee that only qualified and skilled individuals are involved in the execution of construction projects. The law also places clear obligations on contractors regarding project delivery, quality control, and adherence to contractual agreements.

5. Regulation of Subcontracting: The practice of subcontracting will be more stringently regulated under the new law. Main contractors will be required to obtain prior approval before subcontracting any part of a project, and they will remain fully liable for the work of their subcontractors. This provision is designed to improve project oversight and ensure that all parties involved in a project meet the required standards.

6. Penalties and a Grace Period: The law outlines a clear set of penalties for non-compliance, ranging from financial fines ranging from AED 1,000 to AED 100,000, doubling to AED 200,000 for repeat offenses within a year and to the suspension or revocation of a contractor's license. To facilitate a smooth transition, existing contractors will be given a one-year grace period from the date the law comes into force to regularize their status and comply with the new requirements.

Conclusion

Law No. 7 of 2025 represents a fundamental shift in how the contracting sector is regulated in Dubai, placing a greater emphasis on accountability, quality, and proven capability.

The new framework will require all contracting entities to proactively assess their legal status, staff qualifications, and operational procedures. Adherence to these new standards within the one-year grace period will be critical for any contractor wishing to maintain good standing and secure future work in the Emirate's competitive construction market.

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