Contracting Company Licence in Dubai (2026): Construction Law No. 7 of 2025 Explained
Last checked: 24 October 2026. We re-check fees, deadlines and rules every quarter.
Getting a contracting company licence in Dubai now takes more than a trade licence. Dubai Law No. 7 of 2025 introduces mandatory contractor registration and a classification system, and the rules apply from January 2026 with a one-year transition period.
This guide explains what the law changes, what a new contractor needs to set up, and which parts you must confirm with Dubai Municipality before you commit.
Key takeaways
- Dubai Law No. 7 of 2025 adds contractor registration and classification, applying from 15 January 2026 with a transition period to January 2027.
- The trade licence, the registration and the classification are three separate steps.
- New contractors are normally placed at the lowest classification, which limits the size of project they can take.
- Qualified, certified technical staff are required, so plan visas and salaries from the start.
The short answer
You still start with a commercial licence for the contracting activity. You then register on the Dubai Municipality contractor register, receive a classification and employ the technical staff the classification requires.
The classification limits the size of project you may take on. New entrants are normally placed at the lowest level until they meet the criteria for a higher one.
| Item | What applies |
|---|---|
| Law | Dubai Law No. 7 of 2025 |
| Effective date | 15 January 2026, with a transition period to January 2027 |
| Regulator | Dubai Municipality, through a central contractor register |
| Base requirement | A valid commercial licence for contracting |
| Reported penalty | Up to AED 200,000 for repeat violations after the transition |
What changed
Before the law, contractors dealt with a patchwork of approvals project by project. The new law brings registration into one central register and ties it to the digital platforms the emirate uses for business registration.
The sister site covers the legal detail in its guide to the Dubai contractor licensing law, and the wider group is at companyformationinuae.com.
Dubai Municipality is the regulator, so confirm current requirements on its official website.
Law-firm summaries say the regime covers construction activity across mainland Dubai and free zones. Because the rules are new, confirm the current scope with Dubai Municipality before you rely on that point.
What is the difference between a licence, registration and classification?
These are three separate steps, and founders often mix them up. The trade licence lets the company trade, the registration places it on the contractor register, and the classification sets its project limit.
A commercial licence for building or civil contracting comes first. Our commercial licence guide explains what that licence covers and what it costs.
Registration is then valid for a period and needs renewal. Summaries say the initial registration runs for one year, but check the current term and fee with the Municipality.
How does contractor classification work?
Dubai Municipality classifies contractors by their technical, financial and administrative capability. The classification decides which projects you may bid for and execute.
A contractor classified for villa renovations cannot bid for a mid-rise tower without meeting a higher level. To move up, a company builds its record on larger projects or works as a subcontractor to a higher-classified firm.
New companies have no track record, so they usually start at the bottom. Plan your first year around projects that match that level, and do not promise clients work that your classification does not allow.
What staff must a contractor employ?
Contractors must employ a minimum number of qualified technical staff. Advisers describe a requirement for a Municipality-approved civil engineer, and certified personnel such as site supervisors.
Key technical staff need a professional competency certificate from the Municipality. Firms that relied on informally trained supervisors need to get their people certified during the transition period.
This affects your visas and your budget. Our guide to hiring your first employee and the guide to residence visas for company owners cover the visa side of the hiring plan.
Approvals that remain separate
A construction licence and a contractor classification do not replace project approvals. You still need a building permit for each project, and other approvals may apply by location or type of work.
Projects inside certain zones can involve the zone authority as well. I could not confirm which zone bodies apply to which projects, so ask the relevant authority before you start.
Treat these as part of your cost and timeline, not as an afterthought. A contractor who has a licence but no permit cannot start work.
Mainland, free zone or both
Most contractors operate from the mainland, because their clients and sites are spread across the emirate. A free zone licence suits firms that work for companies inside a zone or run a regional office.
If you plan to work across Dubai, a mainland licence keeps the structure simple. Our mainland setup page explains the steps and the starting price.
If you later add activities, such as fit-out or maintenance, follow the steps in our guide to adding or changing activities.
How much does a contracting company licence cost?
A contracting company has more costs than the licence. Expect the licence, the registration and classification fees, the salaries and visas for qualified staff, insurance, and sometimes a guarantee for larger classifications.
Fees change as the new regime settles, so ask for current figures from the Municipality or your adviser. Our trade licence cost guide shows how a Dubai licence quote is built, which is the first line of the budget.
Who this suits
Contracting covers general building, civil works, fit-out, MEP services and specialist trades. Each has its own activity names on the licence, so a company that wants to do several should list them early.
A small fit-out or maintenance firm has lighter requirements than a general building contractor. Even so, it falls under the same law, so the registration and staffing questions apply to every size.
If you are an engineer or project manager planning to start your own firm, you also need the legal and financial capacity the Municipality looks for. Plan to build that record deliberately, because classification reflects it.
Choosing a legal structure
Most contractors set up a limited liability company on the mainland. Foreign ownership of up to 100 per cent is now allowed for many activities, but the rules depend on the activity, so confirm yours before you appoint a local partner.
A sole establishment is simpler and cheaper, but the owner carries unlimited liability for site accidents and contract disputes. Contracting carries real risk, so most advisers suggest a company structure.
The structure also affects classification. Summaries say partners, capital and financial strength feed into the level you receive, so ask the Municipality how your structure will be assessed.
Insurance, guarantees and payment terms
Contractors normally carry contractors’ all risks cover, third party liability and workers’ compensation. Clients often ask for performance guarantees and retention on payments, so your cash flow needs to cover them.
Larger classifications may need bigger guarantees. Ask your bank and insurer early, because a missing guarantee can stop you taking a project you are otherwise qualified for.
Tax and VAT for contractors
Construction services are normally subject to standard-rated VAT, and some residential supplies can be zero-rated or exempt in particular cases. Your tax adviser should confirm the treatment for each type of work.
Corporate Tax applies to mainland contractors on the usual basis. Keep project accounts separate, because long contracts raise questions about when revenue and cost are recognised.
Year-one budget worksheet
A contracting company has more cost lines than the licence. Use this worksheet to collect a written quote for each line before you commit. Only the licence line has a published starting price on our site.
| Cost line | Where the figure comes from |
|---|---|
| Mainland trade licence | From AED 14,626, our starting package |
| Registration and classification fees | Ask Dubai Municipality for the current schedule |
| Technical staff salaries and visas | Depends on the classification you target |
| Insurance (contractors all risks, third party, workers compensation) | Broker quote |
| Guarantees for larger classifications | Bank quote |
| Office and Ejari | Lease quote |
Documents you will need
- Passports, visas and Emirates ID copies for the owners and managers.
- A tenancy contract with Ejari registration for the office.
- The trade licence and company constitutional documents.
- Qualifications and experience records for the technical staff.
- Financial statements or bank references, if the Municipality asks for them.
- Insurance certificates for the cover you carry.
The Municipality may ask for more as the new regime settles. Collect these early and keep a clean copy of each in one shared folder.
How long does contractor registration take?
The licence itself can be issued in days or a few weeks, depending on the activity and approvals. Registration and classification add time, and certifying staff can take longer than both.
I could not find an official timeline for the registration step. Ask the Municipality for the current processing time and build it into your plan before you promise a start date to clients.
Growing your classification
A contractor moves up by completing projects of increasing size and keeping its record clean. Subcontracting for a higher-classified firm is a common way to build that record.
Keep project files, completion certificates and client references from the very first job you complete. They support your next application, and they are hard to rebuild later.
Step by step
- Define the type and scale of work you want to bid for.
- Choose the licence activity and structure.
- Secure an office and open the company.
- Hire and certify the required technical staff.
- Register on the contractor register and receive your classification.
- Arrange insurance and project approvals as projects arrive.
- Diary your registration and certificate renewals.
Our annual compliance checklist shows where these renewals fit with your licence and tax dates.
Mistakes to avoid
- Setting up the company and hiring staff before you know the classification rules.
- Bidding on projects above your classification.
- Assuming the trade licence alone lets you work on a site.
- Ignoring the end of the transition period in January 2027.
- Choosing a licence activity that is too narrow for the work you plan to sell.
How EZONE helps
EZONE sets up the company and your contracting company licence, plans the staffing and visas, and prepares the supporting documents. We work with your technical team on the Municipality steps, so you know what is still open before you bid.
Because the rules are new, we confirm each requirement with the authority at the time of your application. Tell us the projects you want to bid for and we will map the licence, registration and staffing plan. You can also read how our business setup consultants work with clients.
Frequently Asked Questions
Under Dubai Law No. 7 of 2025, contractors are expected to register on the central contractor register, with a transition period to January 2027. Confirm current requirements with Dubai Municipality.
It is the level that Dubai Municipality assigns based on your technical, financial and administrative capability. It limits the size of project you can take on.
Not usually. New entrants are normally placed at the lowest classification until they meet the criteria for a higher one.
No. Each project needs its own building permit, and other approvals may apply by location, so budget for them separately.
Law-firm summaries say it covers construction activity in mainland Dubai and free zones. Because the regime is new, confirm the scope for your zone before you start.
I found no official processing time, so ask Dubai Municipality for the current figure. Certifying your technical staff is often the slowest step, so start it before you apply.
Advisers describe a minimum number of qualified technical staff, including a Municipality-approved civil engineer and certified supervisors. Confirm the exact numbers for your classification.
