Dubai’s new outsourcing law explained: How government services will be delivered by private contractors
Regulations outline contracts, monitoring rules and employment requirements
DUBAI – Dubai has introduced a new legal framework governing how government services can be outsourced to private companies, marking a significant step in reshaping how certain public services are delivered in the emirate.
In his capacity as the Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, issued Law No. (5) of 2026 regulating the outsourcing of government services in the emirate. The legislation is designed to improve the efficiency and quality of services while making them easier for customers to access.
The law sets out the legal structure that allows government entities to contract private companies to deliver some or all government services under defined agreements, while maintaining oversight and regulatory control.
What outsourcing means
Under the new law, outsourcing refers to the process by which a government entity contracts a private company or organisation to provide specific government services on its behalf.
These contractors may be licensed private companies, including both for-profit and non-profit organisations, that are authorised to operate in Dubai and capable of delivering the services specified in the outsourcing contract.
The framework aims to align Dubai’s service delivery model with international best practices in public administration. Authorities say the move is intended to increase efficiency, improve service quality and strengthen collaboration between the public and private sectors.
At the same time, the law is designed to support Dubai’s strategic economic objectives and create more job opportunities in the private sector for UAE nationals.
Oversight framework
The legislation outlines the governance role of the Dubai Department of Finance, which is responsible for overseeing the outsourcing of government services.
The department will establish rules and procedures governing outsourcing agreements and ensure that government entities follow approved standards when contracting private service providers.
Government entities are permitted to appoint one or more contractors to provide the same government service. However, the law restricts the use of exclusive outsourcing agreements.
An exclusive contract may only be awarded if a contractor is the sole bidder for the service, a measure intended to preserve fair competition and prevent monopolies in outsourced public services.
Contract rules
The law sets clear requirements for outsourcing agreements between government entities and contractors.
Contracts must include details such as the scope of services, the duration of the agreement and the responsibilities of each party. They must also outline conditions for contract termination as well as provisions designed to protect the contractor’s assets used in delivering the service.
In addition, the legislation establishes procedures for handling violations and penalties linked to the delivery of government services. Government entities may authorise contractors to assist in collecting fines related to breaches of applicable regulations by service users.
However, the law places limits on enforcement powers.
A contractor whose employees are granted judicial enforcement authority is prohibited from imposing fines, penalties or administrative measures on service users beyond what is permitted under the government entity’s applicable regulations.
Emiratisation rules
The law also introduces employment requirements aimed at strengthening Emiratisation in outsourced government services.
Contractors are required to employ at least one UAE national for every non-national employee working on the outsourced service.
The salaries and incentive structures for UAE national employees must comply with applicable government regulations as well as the terms outlined in the outsourcing agreement with the relevant government entity.
This requirement aims to support national workforce participation while expanding employment opportunities in the private sector.
Performance monitoring
Government entities remain responsible for supervising and evaluating outsourced services.
The law requires authorities to regularly monitor the contractor’s performance using performance indicators specified in the outsourcing contract. These indicators must also be linked to the government entity’s approved strategic objectives.
This monitoring framework is intended to ensure that outsourced services continue to meet government standards for efficiency, quality and accessibility.
Where outsourcing contracts do not address certain procedural matters, the provisions of Law No. (12) of 2020 on Contracts and Warehouse Management in the Dubai Government will apply, particularly in relation to the procedures used to select contractors.
Compliance timeline
The law establishes a transitional period to allow government entities and contractors to align their operations with the new regulatory framework.
Both parties are required to ensure full compliance with the law within three years from the date it takes effect.
During this period, existing outsourcing arrangements may be reviewed and updated to meet the requirements of the new legislation.
The law also states that any provisions in other legislation that conflict with its rules will be repealed to the extent of the conflict.
Law No. (5) of 2026 comes into force from the date of its publication in the Official Gazette, establishing the regulatory foundation for outsourcing government services across Dubai.