Dubai Ruler His Highness Sheikh Mohammed bin Rashid Al Maktoum has issued a new law aimed at regulating contracting activities across the emirate. The legislation is designed to unify standards and practices within the sector while providing a clear system for classifying contractors based on their expertise and capabilities.

A Clear Framework for Contractors.

The law introduces a structured classification system for contractors, ensuring they are evaluated based on qualifications, technical ability, and financial strength. It prohibits them from exceeding their approved classification or subcontracting work without prior approval. This move seeks to improve project quality and promote accountability in the growing construction industry.

Oversight by a New Committee.

A new Contracting Activities Regulation and Development Committee will be established, chaired by a representative from Dubai Municipality. The committee will be responsible for overseeing the law’s implementation, resolving conflicts between regulatory bodies, and developing a code of ethics for the entire sector. It will also coordinate with public and private stakeholders to ensure smooth enforcement.

Digital Registry and Competency Standards.

Dubai Municipality will launch a centralised electronic registry for all contracting activities, linked to the ‘Invest in Dubai’ platform. Contractors will be categorised based on their field—such as construction, building, or demolition—and technical staff will be issued professional competency certificates. The municipality will also create a code of conduct to guide industry behaviour.

Strict Penalties for Violations!

Contractors found violating the law can face fines ranging from AED 1,000 to AED 100,000, with repeat offenses leading to penalties of up to AED 200,000. Additional actions may include temporary suspension, downgrade of classification, removal from the official registry, or cancellation of commercial licences. Technical staff may also face deregistration or loss of certification.

Compliance Timeline.

All contractors operating in Dubai must regularise their status within one year from the law’s effective date, with a possible one-year extension granted by the committee. Contractors with upcoming renewals will be required to sign a declaration agreeing to comply with the new regulations.

Improved Evaluation System Coming in 2026

This legal update follows Dubai Municipality’s recent announcement of a revised ‘Contractors and Engineering Offices Evaluation System,’ set to launch in early 2026. The upgraded system will introduce stricter performance and ethical standards, further enhancing safety and professionalism across construction projects in the emirate.