In a significant legislative step, the Emirate of Dubai has issued Law No. 7 of 2025, which establishes a comprehensive regulatory framework for contracting activities across the Emirate. This law represents a pivotal milestone toward enhancing oversight, classification, and transparency in the construction sector, in line with the Emirate’s strategic vision for sustainable urban growth.
A Unified Legal Framework for Contractors
Law No. 7 of 2025 establishes a unified and enforceable system for regulating contractor activities, ensuring alignment with building regulations, planning systems, and long-term development objectives. The law is set to come into effect six months after its publication in the Official Gazette, which is expected to be six months from its issuance date, with a one-year grace period from the effective date to enable contractors to comply with its provisions.
Broad Scope and Application
The legislation applies universally to all contractors operating within the Emirate of Dubai, including those situated in special development zones and free zones, such as the Dubai International Financial Centre (DIFC). However, the law also provides for specific exemptions, notably for contracting activities related to airport infrastructure and any other projects excluded by Executive Council decree.
Establishment of a Dedicated Oversight Committee
A central feature of the law is the creation of the Contracting Activities Regulation and Development Committee, under the authority of the Executive Council of Dubai. The committee will be chaired by a Dubai Municipality representative and comprise members from relevant governmental entities involved in the regulation of contracting activities.
This committee will undertake some of the following responsibilities:
• Approval of contracting activities across Dubai;
• Allocation of supervisory responsibility to designated regulatory bodies;
• Oversight of the law’s implementation;
• Development of policy and legislative proposals; and
• Resolution of jurisdictional conflicts among regulatory entities.
Introduction of a Central Contractor Register
The law introduces a centralized Contractor Register, maintained by Dubai Municipality and integrated into the Invest in Dubai digital platform. Registration on this platform will be mandatory for all contractors, who must operate strictly within their approved classification and capacity. The law explicitly prohibits exceeding technical or financial thresholds or engaging in unauthorized subcontracting without prior written approval.
In a further move to elevate standards, the law mandates that all technical personnel must obtain a professional competency certificate to validate their qualifications and eligibility to participate in contracting activities. This requirement is designed to safeguard quality and ensure that only qualified professionals are engaged in complex construction works.
Enforcement and Sanctions
Law No. 7 introduces a formal enforcement mechanism with graduated penalties for non-compliance. Initial breaches may result in fines ranging from AED 1,000 to AED 100,000, while repeat violations within one year may trigger fines of up to AED 200,000. More serious penalties include:
- Suspension of contracting operations;
- Downgrading of contractor classification;
- Removal from the Contractor Register;
- Revocation of commercial licenses; and
- De-registration and certificate revocation for non-compliant technical staff.
This marks a decisive shift from a previously voluntary compliance model to one grounded in mandatory, enforceable regulation.
Right to Appeal
The law grants any interested party the right to submit a written appeal against any action, decision, or measure taken under its provisions or the regulations issued pursuant thereto, within 30 days from the date of notification or knowledge of the action. The grievance shall be decided upon within 30 days from the date of its submission, by a specialized committee formed by the head of the concerned entity, and the committee’s decision shall be final in this regard.
Alignment with Broader Reforms
The enactment of Law No. 7 follows Dubai Municipality’s recent announcement of an enhanced Contractor and Engineering Consultancy Rating System, scheduled for implementation in early 2026. This rating system is expected to offer a more comprehensive and integrated framework for evaluating construction and engineering entities, further reinforcing Dubai’s push for a transparent and resilient construction ecosystem.
If you have any questions or need further advice on related matters, please feel free to contact Hussam Alghofari: hussam.alghofari@sat-law.com
Written by Hussam Alghofari
August 26, 2025
