New Regulation for Construction Activities in Dubai

With the aim of promoting construction investment in Dubai, new regulations have been introduced to regularise construction activities according to globally accepted standards and best practice. These apply to all contractors operating in the Emirate, including the free zones and special development zones. Construction activities relating to airports, infrastructure and associated facilities are excluded (with discretion over further activities being excluded in the future). These provisions come into effect from 15 January 2026 and contractors operating in the Emirate must be registered within one year.  Violations may result in a financial fine of between 1,000-100,000 dirhams, or up to 2,000,000 dirhams if the same violation is repeated in a year. Additional sanctions may include suspension, licence revocation or downgrading of contractor classification. 

What do the new regulations entail? 

1. New registration requirement and classification system for contractors

A contractor must hold a valid commercial licence to practice and promote themselves as a contractor and be registered with the Municipality (who will record the contractor’s data, permitted construction activities, classification category, technical staff and any other data deemed necessary). The regulations prohibit contracting with any contractor who is not registered and does not hold this licence. 

The licence may restrict the contractor’s activities to certain classifications of work. The licence is valid for one year and a renewal application must be submitted within 30 days of the expiration date, unless the registration period exceeds one year and registration fees are paid annually. There are conditions for registration, such as having the required technical staff and necessary skills and experience to practice the construction activity. A contractor may have their registration and licence revoked if they no longer meet the registration conditions.

2. Committee for Regulating and Developing Contracting Activities

A new committee will be formed in the Emirate to regulate and develop construction activities. The committee has the power to:

• approve and supervise the implementation of the new registration and classification requirements on contractors 

• approve the Code of Conduct and Ethics for practicing contractors in the Emirate
• propose policies and legislations relating to the practice of construction activities
• review recommendation relating to the advancement of the construction sector in the Emirate and provide appropriate guidance and 
• resolve any disputes that may arise regrading the supervision of contracting entities in the Emirate, including determining the solutions and guarantees necessary in dealing with the consequences of a contractor’s de-registration.

3. Obligations on contractors

There are new requirements upon contractors by the competent authority (i.e. the government entity authorised to supervise and regulate contracting in the Emirate), such as:

(a) Compliance

Comply with all application legislation in the Emirate; the terms and conditions of their contracting agreement and instructions from the engineer; and the Code of Conduct and Ethics for construction activities by the Committee. 

(b) Competency requirements

 Adhere to the classification requirements applicable to their registered status, which includes:

• not contracting for projects that exceed their financial, technical or administrative capacity or the number of technical staff and labour available
• appointing competent and qualified technical staff appropriate to the size and type of project undertaken
• notifying the competent authority of any changes to their status, or any changes or violations whilst the project is being executed
• supervising and monitor sub-contractors when assign part of the works to them, and
• not assigning their contracted works except with the approval of the competent authority. 

(c) Record keeping

• maintain records with data on technical staff and labour at the project site.
• allow employees of the competent authority to enter the project site or business premises to review relevant records and data.
• maintain such record for 10 years from the date of the completion certificate or contract termination. 

4. Controls on sub-contracting

A contractor may sub-contract, provided that:

• the contract agreement does not prohibit sub-contracting or require the contractor to perform it personally
• the sub-contractor is authorised to operate in the Emirate; holds a valid commercial licence and is registered in the Register
• the sub-contractor’s activity matches the work assigned, and
• the sub-contractors work is clearly defined and reported to the competent authority, with approval obtained by the competent authority and any conditions set by the competent authority are met. 

5. Controls on forming consortiums

A consortium between two or more contractors to execute a single project may be formed provided that:

• this is necessitated by the nature of the project
• prior approval is obtained from the employer and the competent authority and conditions set by the competent authority are met
• all consortium members are registered and their classifications align with the nature of the project, and
• one member is designated as the representative.

Conclusion

These regulations demonstrate the Emirate’s commitment to construction, as a way to promote development and economic progress. Regulation of construction activities will encourage investment in this sector.  Early adoption of these new requirements, from when they come into effect from 15 January 2026, is recommended to ensure consistency across the market.