Is Dubai enhancing its investor protection for property investments?

Dubai’s recent Law No. 7 of 2025 aims to strengthen oversight by introducing new standards for contractors in the emirate's construction sector; it appears, at first blush, to have real mettle.

Its secondary objective, and hope for property investors, is that its measures will increase transparency, accountability, and project quality, leading to a more secure and predictable investment environment. This article looks at whether, by enhancing contractor standards and investor protection, the new law will influence private equity firms to invest more in real estate projects in Dubai.

The answer to that question lies in how the new law plans to help investors:

First: it establishes clear (‘higher entry’) standards for all contractors, favouring well-capitalized operators, in turn reducing the risk of inexperienced building firms. For investors, this provides greater assurance that projects will be completed by qualified professionals.

Second: it creates a new committee within the Dubai Municipality and a central digital registry to oversee contracting activities. This makes information on a contractor's capabilities more accessible to developers and financiers. Enhanced visibility helps investors conduct more effective due diligence, mitigating the risk of dealing with unqualified parties.

Third: the law introduces a graduated system of penalties for non-compliance, including fines, suspension, or license revocation. This raises the stakes for contractors who fail to meet standards, incentivizing quality workmanship, and adherence to timelines. Investors can therefore expect higher project reliability and reduced delays.

Fourth: the law requires approval from the Dubai Municipality for subcontracting activities. It also formalizes rules for contractors entering into consortiums for large-scale projects. This brings more structure and oversight to complex supply chains, reducing risks associated with project management and delivery.

But will it move the dial towards greater, more stable, investment opportunities? Our view is that it will, in time. It will do that by providing greater certainty and stability by shifting from a regime based on voluntary compliance to enforceable rules; and it will increase market transparency, making it easier for investors to vet potential partners.

But it will take time and there will be inevitable challenges along the way, in particular during the initial adaptation period. Contractors will be afforded a ‘grace period’ to comply with the new law, and during that time some will undoubtedly face difficulties in meeting the new standards, which could cause temporary disruptions or delays in certain projects – which could adversely impact the investment climate. There will also be cost increases in the immediate to short term. Enhanced regulations and stricter quality control measures often lead to increased operational costs for contractors. These costs could, in some cases, be passed on to investors, affecting project budgets, although this is balanced by the promise of higher-quality results.

However, the law is the right way to go. It is also part of Dubai's and the wider UAE's broader strategy to enhance its business ecosystem and attract foreign direct investment. Other recent pro-investment initiatives that complement this law include: (1) Executive Council Resolution No. (11) of 2025 which allows free zone entities easier access to the mainland market, boosting inter-emirate business growth and collaboration; (2) the UAE’s Expanded Golden Visa Program which lowered investment thresholds and expanded eligibility for long-term residency, making it more attractive for international talent and investors; and (3) improved real estate transparency with new anti-money laundering rules and enhanced protections for off-plan buyers increase long-term market integrity.

It is often said that the ‘proof is in the pudding’. In this instance, it may be ‘in the pilings’.

Amir Ghaffari, Partner