Dubai has introduced a new law aimed at improving the efficiency and quality of government services by allowing private sector companies to deliver certain public services on behalf of government entities.
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 regulating the outsourcing of government services in the emirate.
The legislation is designed to enhance the performance of public services, improve customer access, and strengthen collaboration between government entities and private sector organisations, according to a report by WAM.
Improving efficiency and service quality
Under the new framework, outsourcing allows a contracted company to provide some or all government services on behalf of a government entity under agreed contractual terms.
Authorities say the law aligns Dubai’s governance practices with international best standards while ensuring that services remain efficient, reliable, and customer-focused. The move also supports Dubai’s broader strategic goals by encouraging stronger public-private partnerships and creating additional job opportunities for Emirati citizens in the private sector.
According to the report, the law aims to ensure that outsourcing arrangements maintain high service standards while providing flexibility for government entities to leverage private sector expertise.
Clear oversight and responsibilities
The law outlines the role of Dubai’s Department of Finance in supervising and regulating government service outsourcing. It establishes rules and procedures governing how outsourcing agreements should be structured and managed.
Contractors under the law are defined as licensed private organisations, whether for-profit or non-profit, that are authorised to operate in Dubai and deliver services through formal outsourcing agreements.
Government entities are allowed to appoint one or more contractors to provide the same government service. However, exclusive contracts are not permitted unless a contractor is the only bidder, a measure intended to ensure fair competition.
The legislation also sets out what must be included in outsourcing agreements, including contract duration, termination conditions, and provisions protecting the contractor’s assets.
Safeguards and accountability measures
The law establishes safeguards to ensure transparency and accountability in service delivery.
For example, while contractors may assist in collecting fines related to violations by service users, the legislation prohibits contractors whose employees are granted judicial enforcement authority from imposing penalties or administrative measures beyond those defined by government regulations.
Government entities are also required to continuously monitor contractor performance. This oversight will rely on performance indicators included in outsourcing agreements and aligned with each entity’s strategic objectives.
Emiratisation and implementation timeline
A key provision of the law focuses on supporting Emiratisation in the private sector.
Contractors are required to employ at least one UAE national for every non-national employee. The law also stipulates that salary structures and incentive mechanisms for Emirati employees must comply with applicable regulations and the terms of the outsourcing contract.
Additionally, procedures for selecting contractors will follow the provisions of Law No. (12) of 2020 on Contracts and Warehouse Management in the Dubai Government for any matters not explicitly addressed in outsourcing agreements.
Government entities and contractors have been given up to three years from the law’s effective date to ensure their operations fully comply with its provisions. Any legal provisions in other legislation that conflict with the new law will be repealed to the extent of the conflict.
The law takes effect from the date it is published in the Official Gazette.
