Dubai Introduces Major New Contracting Law: What All Contractors Need to Know

The new regulations are based on three key changes:

Dubai is creating one official system to classify all contractors. This means that every company will be evaluated using the same clear standards based on its technical and financial capabilities. This provides fairness and helps clients choose the right contractor for the job.

A committee will be set up to regulate and develop contracting activities. This committee will be central. Led by Dubai Municipality. It will become the main authority for the sector and approve contracting activities, propose new policies, and oversee the implementation of the law.

Dubai Municipality will manage a new integrated electronic system. This e-registry will be the official, central database for all contractors operating in Dubai. It will be linked to the "Invest in Dubai" platform. For everyone, this will be the single source of truth to verify a contractor's status and classification.

This new law implements clear rules that all contractors must follow. Ignoring these rules can result in severe consequences, including substantial fines and restrictions on operations.

Specifically, contractors are prohibited from undertaking projects that go beyond their approved classification, as well as subcontracting work without prior authorization. Violations can result in fines ranging from 1,000 to 100,000 dirhams, with penalties doubling to a maximum of 200,000 dirhams for repeated offenses within a one year period.

Beyond fines, authorities can also:

You don't need to act today, but you must prepare. The law will take effect six months after it is published in the Official Gazette.

From that effective date, all contractors will have one year to ensure that their businesses fully comply with the new rules. This is called "regularizing your status."

This transition period is a crucial time to evaluate your company’s structure, technical staff qualifications, and internal processes to ensure you are ready for the new system.