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The construction market size in UAE was valued at $85.6 billion in 2021. Development in the construction market in the next few years will also boost the industrial sector, energy and transportation infrastructure. A businessman must know about the applicable laws before making investment plans in the construction sector. A ‘contractor classification license’ has to be obtained before working as a contractor in UAE. Some important laws governing construction matters are as follows:

  1. The Civil Transactions Code comprehends provisions relating to construction matters and Muqwala (building) contracts. Chapter-III deals with contracts of work. For knowing the obligations of the contractor, you can refer to Articles 875 to 883. A contract of Muqawala will terminate when the agreed work gets completed or upon the cancellation of the contract by consent of the parties or by order of competent court. 
  2. Administrative Resolution No. 125 of 2002 is a law applicable to the Emirate of Dubai, that lays down certain building standards. The Dubai Municipality can issue circulars and release guidelines for issuing further clarification in their respective jurisdiction. Permission for a new building and consumer product advertising has to be taken from the municipality, you can visit the site of Dubai-municipality-services for the application.
  3. The new Labour law of 2022 and notifications of the Ministry of Labour and social affairs should also be administered. Almost all private organizations come under the scope of new labour law. The law, announced on November 2021 and came into effect in February 2022, applies to the whole of the seven Emirates of UAE including Free Zones (except DIFC and ADGM).
  4. Federal law 24 of 1999, on the protection and development of the environment, should be adhered to for obtaining permissions and NOCs for construction-based projects. The law imposes heavy penalties on the wrongdoer also.

The ‘contract’ is an important document for deciding the rights and duties of the parties but the same contract cannot help the parties to escape their liabilities under construction laws and regulations of the country. The clause of ‘dispute settlement’ can also be added to the contract. The matter can be decided through court intervention or through alternative dispute resolution including arbitration, mediation, and negotiation. Take the help of an experienced lawyer in UAE for drafting a perfect contract as per your needs.


Our best lawyers in UAE will assist you in construction company formation, obtaining trading licenses, making representation before authorities for obtaining permissions and drafting perfect contracts. Get in touch with our construction specialists, contact them at info@bsb.legal or call +971 508014003.