In early 2025, a small contractor in Dubai faced unexpected challenges while attempting to renew his commercial license. Dubai Municipality had detected several violations related to inaccurate contractor classification and unqualified technical staff. Amid these issues, the Law No. (7) of 2025 is the law regulating the practice of contracting activities in Dubai, and it was issued to reshape the construction landscape.
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What is the Law regulating the practice of contracting activities in Dubai?
Law No. (7) of 2025, commonly known as the Dubai Contracting Law, is the latest legislation approved by the Executive Council to govern contracting operations within the Emirate. This law mandates all contractors to obtain official licensing, register in an electronic system, and employ certified technical staff.
Scope of Application
This section explains who is covered by the law and which contracting activities fall within its jurisdiction.
The law applies to:
- All contractors operating within Dubai, including free zones and the DIFC.
- All types of contracting activities (civil, architectural, mechanical, electrical, etc.).
The only exceptions are:
- Contracting activities related to airports and their infrastructure.
- Any other activity exempted by decision of the Executive Council based on committee recommendation.
Municipality Jurisdiction
Dubai Municipality is the primary regulatory authority tasked with:
- Creating and managing a unified electronic registration platform.
- Maintaining a comprehensive contractor database.
- Issuing professional competency certificates to technical personnel.
- Developing and updating the contractor classification system.
Through this, Dubai Municipality plays a pivotal role in applying and enforcing the Dubai Contracting Law.
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Conditions for Contractor Registration
The new legislation imposes strict conditions for contractor registration:
- No legal restrictions preventing the applicant from practicing contracting.
- A valid commercial license.
- Adequate technical qualifications and experience.
- Employment of certified technical staff in line with the required classification.
- Payment of all relevant registration fees.
(Article 10, Law No. 7 of 2025, Official Gazette of Dubai Government, Issue No. 726, Effective Date: January 15, 2026)
Contractor Classification System
Classification helps to match contractors to appropriate project sizes and scopes.
Contractors are categorized into tiers based on financial, technical, and administrative capacity. Practicing outside one’s classification tier is strictly prohibited. However, the relevant authority may temporarily permit a contractor to undertake higher-tier projects under evaluation conditions to determine eligibility for promotion to a higher class.
This ensures that only qualified contractors undertake large-scale or complex projects, thereby enhancing project quality and safety.
Sanctions and Penalties
Failing to comply with the law can result in serious consequences.
Violations of the law may lead to:
- Fines ranging from AED 1,000 to AED 200,000 depending on the severity.
- Temporary suspension of contracting activities for up to one year.
- Downgrading of classification tier.
- Deletion from the official register.
- Revocation of competency certificates of technical staff.
Repeat offenses may lead to doubled fines and long-term operational restrictions.
Frequently Asked Questions (FAQ)
The Law regulating the practice of contracting activities in Dubai is a pivotal framework that brings order, transparency, and strategic development to the emirate’s booming construction sector. By enforcing clear classifications, rigorous registration protocols, and technical competency standards, the law ensures that only qualified contractors operate within Dubai’s dynamic market. Whether you’re an investor, a developer, or a contractor, aligning your operations with this law is not just a legal necessity—it is a competitive advantage.
Contact our lawyers in Dubai now via the WhatsApp button below for a compliance assessment of your company.
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