A New Era for Contractors in Dubai: An Overview of Law No. (7) of 2025

4 min 52 sec December 3, 2025 (Edited)

Dubai has officially ushered in a new, unified legal framework for the construction and contracting industry with the enactment of Law No. (7) of 2025 Regulating Contractors’ Activities in the Emirate of Dubai (Law No. 7/2025). This landmark legislation replaces a fragmented system of local orders and circulars with a single, Emirate-wide regime.

The new law, published on July 8 2025, comes into effect on January 8 2026. It applies across mainland Dubai and all special development and free zones, including the Dubai International Financial Centre (DIFC).

Existing contractors will have one year, until January 8 2027, to comply with the new requirements (Article 26).

The Previous Position

Historically, the regulation of contracting and engineering consultancy activities in Dubai was overseen primarily by the Dubai Municipality (DM) and, in some cases, by the free and special economic zones themselves. The key instruments were Local Order No. (89) of 1994 on the practice of engineering consultancy and Local Order No. (3) of 1999 on construction works, supplemented by DM resolutions and, in some cases, free zone specific requirements. This framework operated on a fragmented basis.

• Engineering offices were categorised into three tiers, reflecting the level of experience and areas of specialisation.
• Construction standards (such as permits and technical approvals) were regulated independently, without integration into consultancy classifications.
• No unified system existed to register contractors across both mainland and free zone jurisdictions, and technical staff qualifications were not subject to a consistent Emirate-wide certification regime.
• Enforcement mechanisms (including penalties and grievance processes) were authority specific, which often led to uncertainty and inconsistent application of standards for companies active in multiple Dubai jurisdictions.

It is important to note that the new law introduces a more consolidated framework, but it does not replace the earlier regime in full. Regulations and decisions previously issued by the DM and other authorities remain in force to the extent they do not conflict with the new law.

Key Changes Under Law No. 7 of 2025

A new Emirate–wide Contractors’ Register

At the heart of the new framework is the creation of an Emirate-wide Contractors’ Register, including for contractors inside free zones and special development areas. No company may operate or present itself as a contractor unless it holds a valid licence and is listed on this Register.

Dubai Municipality has the right to inspect any construction site in the Emirate to ensure compliance with the law. Project owners, including real estate developers, are equally bound: they may not engage any unregistered contractor. This dual obligation marks a significant compliance development for both contractors and employers in Dubai.

A centralised electronic platform

All applications for registration, classification, and Professional Competency Certificates (PCCs) will now be processed through a centralised electronic platform managed by the DM and linked to the “Invest in Dubai” portal.

This shift from paper-based and authority-specific procedures to one unified digital system is designed to enhance transparency, efficiency, and consistency.

Standardised contractor classification

All contractors are assessed against criteria set by the relevant authority, with new entrants defaulting to the lowest tier unless they demonstrate eligibility for a higher category. Classification upgrades will depend on performance and compliance, overseen by the new Committee for the Regulation and Development of Contractors’ Activities.

Technical competency formally embedded in the system

Engineers and technicians working for contractors must now hold a Professional Competency Certificate, and contractors are prohibited from deploying uncertified personnel. This introduces a single, Emirate-wide baseline for technical standards that did not exist under the previous framework.

Shared oversight responsibility

The DM continues to supervise core construction and demolition activities, while sector-specific competent authorities manage specialised fields within their mandate, issuing classifications and PCCs for those activities.

The interagency Committee operates as the coordinating body, approving the list of regulated activities, allocating mandates, issuing the binding Code of Ethics, and resolving disputes between authorities.

Greater emphasis on obligations and accountability

Contractors must retain key documents (contracts, plans, records) for ten years, notify authorities of changes within five working days, avoid “sham projects”, supervise subcontractors properly, and abide by the enforceable Code of Ethics.

Formal recognition of subcontracting, consortia arrangements, and turnkey projects

Subcontracting, consortia arrangements, and turnkey (EPC/design build) projects are formally recognised, but subject to conditions. Subcontractors must be licensed and registered, and prior approvals are required. The DM will issue further details on the framework for turnkey projects.

 Enforcement measures for non–compliance

Fines for non-compliance range from AED 1,000 to AED 100,000, doubling for repeat offences within a year (capped at AED 200,000).

Administrative measures include suspension, downgrading of classification, de-registration, and revocation of PCCs.

Enforcement officers are empowered to inspect sites, and grievances can be submitted within 30 days for review by a committee established under the competent authority.

Transitional arrangements to align with the new requirements

Transitional arrangements allow existing contractors one year from the law’s effective date to align with the new requirements.

Earlier DM regulations (including Local Orders No. 89/1994 and No. 3/1999) remain applicable for now, but only insofar as they do not conflict with the new law, pending the issue of replacement regulations.

Why This Matters

Law No. 7/2025 brings Dubai’s contracting regulation into a modern, transparent, and risk-managed framework. By introducing a central register, digital application systems, and harmonised classification and competency standards, it aims to:

• raise safety and quality standards across the industry;
• align Dubai’s contracting framework with international best practice;
• provide clearer pathways for entry, growth, and compliance in the sector; and
• enhance predictability for project planning and procurement across the Emirate.

For contractors and project owners alike, this shift will require upfront compliance work, most notably on registration, classification evidence, and securing PCCs for technical employees. Businesses should also monitor for further implementing regulations, which will provide critical details on execution.

For a deeper understanding of these regulations and tailored advice on compliance or strategic opportunities under the new regime, please contact Al Tamimi & Company. Our Corporate Structuring Construction, Infrastructure, and Regulatory teams are ready to assist.