Dubai — A sweeping new law issued in Dubai will now require construction contractors to be classified based on expertise, resources, and ethical standards, not just price competitiveness.
Under Law No. 7 of 2025, Dubai mandates that construction tenders focus on technical competence and compliance, aiming to eliminate the long-standing "lowest bid wins" model. The regulation is part of Dubai’s strategy to ensure quality delivery across its next wave of mega infrastructure and real estate projects.
“One of the smartest moves is shifting away from chasing the lowest price,” said Gordon Rodger, Managing Director at Stonehaven. “It’s rarely cost-effective in the long run.”
The law introduces a contractor registry, requires approval for subcontracting, and sets clear classification standards. Only firms meeting these qualifications will be permitted to operate in the emirate.
Penalties for non-compliance include:
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Fines up to AED 100,000 (first-time)
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Up to AED 200,000 (repeat offenses within a year)
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Temporary suspension
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Classification downgrade
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Full removal from the official registry
“This sharpens accountability,” said Mohamed Ragheb Hussein of Azizi Developments. “It’s a unified code that raises standards across the board.”
The move is expected to overhaul recruitment practices, improve delivery timelines, and prevent unqualified firms from securing high-value contracts.
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