Dubai has introduced a new legal framework governing how government services can be outsourced to private entities, with the move aimed at tightening oversight while improving efficiency and service quality across the emirate.
In his capacity as the Ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, issued Law No. (5) of 2026, which regulates the outsourcing of government services in Dubai, according to official reports carried by UAE state media.
Under the law, outsourcing is defined as an arrangement in which a contracted company provides some or all services on behalf of a government entity under agreed contractual terms. The measure is intended to boost the efficiency of government operations, improve the quality of services delivered to residents, and make access to those services easier.
The legislation assigns a central regulatory role to Dubai’s Department of Finance, which will oversee how government entities outsource services. The department is responsible for setting the governing rules and procedures, as well as ensuring that outsourcing contracts follow established standards.
The law also outlines the obligations of contractors. It defines a contractor as a licensed private organisation, whether for-profit or non-profit, that is authorised in Dubai to carry out an outsourcing contract with a government entity.
A key provision focuses on maintaining fair competition. According to the law, government entities are allowed to appoint more than one contractor to deliver the same service. Exclusive agreements are not permitted unless there is only a single bidder for the contract.
The legislation also specifies what outsourcing agreements must include. Contracts must clearly define the scope of services, the duration of the arrangement, the procedures for termination, and safeguards designed to protect the contractor’s assets during the contract period.
In addition, the law sets out mechanisms for dealing with violations and penalties. It allows government entities to involve contractors in collecting fines related to breaches of applicable regulations committed by service users.
Government entities will also be required to monitor outsourced services on an ongoing basis. Performance must be evaluated regularly using indicators established in the outsourcing contract to ensure contractors meet agreed service standards.
Another provision addresses workforce requirements. Contractors must employ at least one UAE national for every non-national employee, with salaries and incentive mechanisms for Emirati staff aligned with applicable regulations and the terms outlined in the outsourcing agreement.
The law also states that Law No. (12) of 2020 on Contracts and Warehouse Management in the Dubai Government will apply to procedures related to selecting contractors and to any issues not specifically covered in the outsourcing contract.
Government entities and contractors have been given a transition period to align their operations with the new framework. They must comply with the provisions of the legislation within three years from the date the law takes effect.
The law further stipulates that any provisions in other legislation that conflict with its rules will be repealed to the extent of the conflict. It will come into force once it is published in the Official Gazette, according to UAE state media.
