Dubai issues new law regulating outsourcing of government services

Dubai: A new law now regulates how government services can be outsourced to private companies in Dubai, to improve the efficiency and quality of government services while making them easier for residents and businesses to access.

In his capacity as the Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, issued Law No. (5) of 2026 allowing government entities to contract private companies to deliver some or all government services under agreed terms.

The legislation also sets rules to ensure outsourcing follows international best practices and strengthens cooperation between the public and private sectors.

Under the law, the Dubai Department of Finance will oversee the outsourcing of government services and establish the procedures governing these contracts.

A government entity may appoint more than one contractor to deliver the same service. Exclusive contracts are only permitted if a company is the sole bidder, a provision aimed at maintaining fair competition.

The law also defines what must be included in outsourcing agreements, including contract duration, termination procedures and measures to protect contractor assets.

Government entities must monitor and evaluate contractors using performance indicators linked to strategic objectives.

The legislation requires outsourcing companies to employ at least one UAE national for every non-national employee. Salaries and incentives for Emirati staff must comply with applicable regulations and contract terms.

Companies whose employees have judicial enforcement authority are not allowed to impose fines or administrative penalties beyond those set out in government regulations.

Government entities and contractors must comply with the law within three years of it taking effect.