Dubai's New Construction Law 2025

Introduction

“The UAE's construction sector is expected to grow at an average 4% annual growth rate between 2026 and 2029, with prices in Dubai’s property market increasing, fueling interest in new construction”

On 08 July 2025, His Highness Sheikh Mohammed bin Rashid Al Maktoum issued Dubai Law No. 7 of 2025 Regulating Contracting Activities in the Emirate of Dubai. It has already been published in the Dubai Government Official Gazette No. 726/59. 

With the comprehensive Construction Law expected to be effective from 08 January 2026, significant changes are being undertaken to strengthen the construction and contracting sector in Dubai, with the establishment of a unified regulatory system to control contracting activities. 

Understanding the changes is crucial for both existing construction companies and national and foreign investors planning to initiate construction activities in Dubai in 2025 and 2026. 

What is Dubai’s New Construction Law?

The new construction law aims to improve the efficiency of construction in Dubai by: 

• Regulating the Sector through the “Regulation and Development Committee”
• Allowing only registered contractors to be engaged for construction activities in Dubai
• Establishing a Unified Regulatory System linked to the “Invest in Dubai” portal
• Enforcing Global Standards to Evaluate a Contractor’s Performance
• Preparing a “Code of Ethics and Conduct”
• Increasing Investment by Removing the Existing Barriers

Get Legal Help: Kayrouz & Associates has a dedicated Construction Law team led by our Founder and Chief Legal Officer, Mr. Pierre Kayrouz, providing end-to-end legal support for development and infrastructure projects in Dubai to ensure continued compliance. 

What is the Scope of Dubai’s New Construction Law?

The new law would apply to all contractors engaged in construction activity in Dubai (except airport-related works and other works that may be exempted), including those working in special development and free zones. 

This includes companies in Dubai that are engaged in the following activities:

• Engineering
• Architectural
• Construction or demolition

What Does This Mean For Construction Activities in Dubai?

Under the law, a registry of contractors has been established, which categorises contractors in Dubai into various categories, based on the type of construction activity, with initial placement in the lowest category.  

Note: If a contractor is in an inferior category, they cannot perform an activity in a superior category without prior approval. 

Further, new obligations have been introduced for contractors, such as:

• Ensuring proper registration and performance classification based on experience, financial capacity, and technical and administrative capability 
• Providing data on licensed activities and technical staff, including the retention of project plans, technical documents and subcontractor records for at least 10 years from the date of project completion
• Ensuring that unlicensed staff are not employed for any construction activities
• Facilitate the entry of government or supervising authority inspectors to audit the project site
• Maintaining health and occupational safety standards, and complying with the Code of Construction Safety Practice, 2024, and any new version that may be published. 
• Securing professional competency certificates for technical personnel engaged in building, construction, and demolition activities
• Avoiding subcontracting unless prior approval for the execution of work through a third party is obtained
• Prohibits contractors from performing engineering work (except for turnkey projects)

Critical Note: The new law allows subcontracting and contractor alliances for large-scale projects; however, prior approval from both the client and the regulatory authority, such as the Director General of Dubai Municipality, needs to be obtained, and other conditions of contractor registration must be met. Further, the main contractor will be accountable for supervision. 

Expert Guidance: Book a free consultation with Kayrouz & Associates’ Construction Law team to get expert advice on regulatory approvals and compliance under the New Construction law. 

What are the Fines and Penalties for Non-Compliance with the New Construction Law in Dubai?

Under the new construction law, any contractor who violates any provision would face:

• Temporary Suspension: Up to one year suspension of the contractor’s commercial license
• Contractor Classification: The classification of the contractor may be downgraded, and they may be deregistered from the contractor registry. 
• Technical Personnel: The Professional Competency Certificate for technical personnel may be suspended or cancelled. 
• Fines: Between AED 1,000 and 100,000

Note: For repeated violations committed within one year, the fines may be doubled, with a maximum of AED 200,000. 

Important: Typically, the commercial license for construction activities in Dubai will be valid for one year, and the renewal application must be filed within 30 days of the expiration date. 

What is the New Regulatory Authority in Dubai?

For construction activities, the new law provides for the creation of a “Supervising Entity” that will be responsible for managing the contractor’s work, and:

• Issuing the authorisation for contractors to perform construction activities in Dubai
• Register new contractors
• Provide conditions for suspension or termination of registration for construction activity in Dubai
• Investigate complaints against contractors and impose fines and penalties

Note: While the Permanent Committee for the Regulation and Development of Contracting Activities is expected to be the overall authority, the day-to-day approvals and registrations for construction activity in Dubai would be handled by the Dubai Municipality. 

How Long Do Contractors Have to Comply With Dubai’s New Construction Law?

All contractors are expected to comply within one year of the date of enforcement of the Law. According to Article 26 of the new law, this period may be extended by another year. 

During this period, contractors and construction companies in Dubai must:

• Start the contractor registration and certification process
• Review subcontracting and joint venture arrangements
• Evaluate tender documents for any ongoing and upcoming projects to ensure they meet the classification requirements
• Check the technical expertise and certification requirements for personnel
• Incorporate a document and record-keeping mechanism to retain all project documents

How Kayrouz & Associates Can Help Comply With Dubai's New Construction Law 2025?

Kayrouz & Associates is one of the leading providers of legal services in the UAE and the Middle East, with offices in Dubai, Beirut and Abu Dhabi. 

Mr. Pierre Kayrouz leads Kayrouz & Associates’ Construction Law Team, and has experience of more than 24 years in large-scale disputes involving construction defects, contractor negligence, and arbitration.

Our Construction Law and Administrative and Government Law team can advise and assist Contractors and Construction Companies in Dubai in:

• Drafting, reviewing and negotiating construction contracts
• Infrastructure and large-scale mega projects
• Project structuring and risk allocation
• Regulatory compliance, approvals and advisory
• Construction insurance and liability
• Administrative Litigation and Appeals
• Administrative investigations and disciplinary actions
• Government licensing and approvals
• Public procurement and tender law

Contact Kayrouz & Associates, or visit our office to discuss your case.