Sheikh Mohammed issues new law to regulate Dubai’s contracting sector

Dubai: His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, today issued a new law to govern contracting activities across the emirate.

The legislation introduces a unified framework for classifying contractors, aligning their categories with their technical expertise and operational capacities.

The new legal structure is expected to enhance transparency in the sector, improve coordination among relevant authorities, and provide a more consistent regulatory environment for developers and construction firms alike.

The new law introduces a unified regulatory framework covering contractor classification, oversight, transparency, and accountability. It supports Dubai’s goals for sustainable growth and aligns with the emirate’s building codes, planning regulations, and long-term development strategy.

A key feature of the law is the creation of the ‘Contracting Activities Regulation and Development Committee,’ established by a decision of His Highness, the Chairman of The Executive Council of Dubai.

Chaired by a Dubai Municipality representative, the committee will include members from various government bodies involved in contracting activities. Its responsibilities include approving contracting activities, supervising implementation, proposing sector policies, resolving jurisdictional disputes, adopting a code of ethics, coordinating stakeholders, and reviewing recommendations from authorities.

The law applies to all contractors operating in Dubai, including those in special development zones and free zones like the Dubai International Financial Centre. However, contracting activities related to airports and infrastructure, or those exempted by decision of Sheikh Mohammed based on committee recommendations, are excluded.

Dubai Municipality is tasked with establishing and managing an integrated electronic system linked to the ‘Invest in Dubai’ platform, serving as the central registry for contractors. The municipality will also prepare a code of conduct, classify contractors involved in construction, building, and demolition, and issue professional competency certificates to technical staff.

Contractors must register in accordance with the law and operate within their approved classification and capacity. They are prohibited from exceeding technical or financial limits or subcontracting without prior approval.

Violations of the law can result in fines ranging from Dh1,000 to Dh100,000. Repeat offenses within one year may lead to doubled fines up to Dh200,000.

Additional penalties include suspension from contracting activities for up to one year, downgrading of classification, removal from the registry, cancellation of commercial licenses, and suspension or deregistration of technical personnel and revocation of their certificates.

Contractors currently operating in Dubai must regularise their status within one year of the law coming into effect. This period may be extended by the committee for an additional year if needed. Contractors with expiring registrations during this time can renew by declaring their intent to comply with the law within the specified timeframe.

Any existing legislation conflicting with this new law will be annulled. The law will become effective six months after its publication in the Official Gazette.