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Dubai, UAE — March 2026 — In a significant move to enhance the efficiency and accessibility of public services, Sheikh Mohammed bin Rashid Al Maktoum, vice president and prime minister of the UAE and ruler of Dubai, has issued Law No. 5 of 2026.
The new legislation establishes a comprehensive framework for the outsourcing of government services across the emirate, aiming to align operations with international best practices while bolstering the private sector.
According to the Emirates News Agency, the Law is designed to elevate the quality of government services and streamline customer access by allowing private entities to deliver them on behalf of government bodies.
Under the new regulations, outsourcing is formally defined as an agreement where a contracted company undertakes the provision of some or all of a government entity’s services under specified terms.
This initiative seeks to foster deeper collaboration between the public and private sectors, support Dubai’s strategic development goals, and create a wider range of employment opportunities for UAE nationals within the private sector.
The legislation clearly delineates the role of the Department of Finance in overseeing and governing the outsourcing process. It sets out detailed rules and procedures for these partnerships, while also defining the obligations of contractors.
According to the Law, a contractor is any licensed for-profit or non-profit organization authorized to operate in Dubai and capable of fulfilling an outsourcing contract.
To ensure fair competition, the Law stipulates that government entities may engage one or more contractors to provide the same service. Exclusive contracts are prohibited unless a single contractor emerges as the sole bidder for a specific project.
The Law further outlines the essential components of an outsourcing contract, including its duration, termination rules, and measures to protect contractor assets. It also addresses violations and penalties, permitting the government entity to authorize the contractor to collect fines from service users related to breaches of applicable regulations.
However, the Law imposes clear restrictions on contractors, particularly those whose employees are granted judicial enforcement authority. Such contractors are prohibited from imposing any fines, penalties, or administrative measures on service users that exceed what is stipulated in the government entity’s own regulations.
Ongoing oversight is a cornerstone of the new legislation. Government entities are required to regularly monitor and evaluate contractor performance using specific indicators tied to the entity’s strategic objectives.
A key provision of the law mandates that contractors must employ at least one UAE national for every non-national employee. The salaries and incentive structures for these Emirati employees must adhere to applicable regulations and the terms agreed upon in the outsourcing contract.
The Law also stipulates that the procedures for selecting a contractor, and any matters not explicitly covered in the outsourcing contract, are subject to the provisions of Law No. 12 of 2020 on Contracts and Warehouse Management in the Dubai Government.
All relevant government entities and their contractors are granted a transition period of three years from the law’s effective date to ensure their operations are in full compliance.
Any conflicting provisions in previous legislation are annulled under the new law, which became effective immediately upon its publication in the Official Gazette.
