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, establishing a framework for the outsourcing of government services in the emirate.
The Law defines outsourcing as an arrangement whereby a contracted company delivers some or all government services on behalf of a government entity under agreed terms. It comes into effect from the date of its publication in the Official Gazette.
The Law sets out to regulate government service outsourcing in line with global best practices. Among its stated aims are improving service quality and efficiency, strengthening collaboration between the public and private sectors, supporting Dubai’s strategic goals, and creating job opportunities for UAE nationals in the private sector.
Law No. 5 of 2026: What Dubai’s government service outsourcing law means for businesses
The legislation places the Department of Finance at the centre of governance, assigning it responsibility for overseeing all matters relating to government service outsourcing across the emirate, the Dubai Media Office said in a statement.
A contractor, as defined by the Law, is a licensed private for-profit or non-profit company or organisation authorised in Dubai to carry out an outsourcing contract.
Under the Law, a government entity may engage one or more contractors to provide the same government service. Exclusive contracts are prohibited unless a contractor is the sole bidder, a provision designed to ensure fair competition.
The Law sets out what must be included in an outsourcing contract, including its duration, rules for termination, and measures to protect the assets of the contractor. It also addresses violations and penalties, and permits a government entity to involve the contractor in collecting fines related to breaches of applicable regulations by service users.
However, the Law draws a clear line on the exercise of authority: a contractor whose employees are granted judicial enforcement powers cannot impose any fines, penalties, or administrative measures on service users beyond those specified in the relevant government entity’s regulations.
One of the Law’s provisions introduces a direct Emiratisation obligation. Contractors are required to employ at least one UAE national for each non-national employee. The salaries and incentive mechanisms for UAE national staff must comply with applicable regulations and the terms agreed in the outsourcing contract.
The Law places an obligation on government entities to monitor and evaluate their contractors on a regular basis. Performance indicators outlined in the outsourcing contract, and linked to the entity’s approved strategic objectives, must be used as the basis for such assessments.
The Law applies the provisions of Law No. (12) of 2020 on Contracts and Warehouse Management in the Dubai Government to the process of selecting contractors and to any matters not specifically addressed in an outsourcing contract.
Government entities and contractors are given three years from the date the Law takes effect to bring their operations into compliance with its provisions.
Any provision in existing legislation that conflicts with the new Law is repealed to the extent of the conflict.
