(MENAFN- Khaleej Times) The family business, which already contributes over 40 per cent of the emirate's GDP, is poised to receive additional support to expand the sector, ensuring its preservation and growth. A roadmap is also in place to attract family businesses and ultra-high-net-worth individuals (UHNWIs) from across the world that will help bolster the economy.
As per a report from the UAE Ministry of Economy, an astounding 90 per cent of private companies in the UAE are family owned. Not only do these businesses play a vital role in the economy, but they also serve as major employers, providing livelihoods to over 70 percent of the private sector workforce.
Family enterprises are the cornerstone of the UAE economy
Family businesses have played a pivotal role in Dubai's economic diversification by establishing a significant presence in various critical sectors. These sectors encompass real estate and construction, retail and wholesale trade, hospitality and tourism, manufacturing, financial services, healthcare, education, and technology.
The country has ambitious economic objectives
The Dubai Economic Agenda D33, unveiled by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has set forth ambitious economic objectives for the coming decade. As a result, the prospects for family businesses in the emirate appear promising.
The rapid growth of financial wealth in the UAE is expected to accelerate at a compound annual rate of 6.7 per cent and is projected to reach $1 trillion by 2026, a notable increase from its value of $700 billion in 2021. This surge in wealth is anticipated to drive significant expansion within the family business sector.
However, to achieve new levels of growth and thrive for generations to come, the sector needs to address several issues brought by an evolving economy including digitisation, cultural issues, governance, and succession planning. A series of initiatives launched recently by Dubai seeks to empower family businesses to lay the groundwork for sustained prosperity.
Centre offers governance guidelines
Earlier this year, Dubai Chambers announced the launch of the Dubai Centre for Family Businesses in line with the comprehensive plan approved by the Ruler. This Centre aims to educate family-owned firms on leadership transition, succession planning, and growth. It will provide diverse initiatives, including a centre for settling family business-related disputes.
Recently, the Centre introduced governance guidelines to assist family-owned companies in establishing effective governance frameworks. These guidelines, based on local adaptations of international best practices, offer detailed advice on developing a family constitution and provide practical tips, tools, and insights to support business-owning families in creating robust governance structures to ensure smooth succession and business continuity.
Abdulaziz Abdulla Al Ghurair, Chairman of Dubai Chambers, one of the institutions at the forefront of helping family-owned businesses explore new frontiers of growth, said,“Dubai's visionary leaders have established the emirate as a leading global hub for business and investments, and remain committed to creating the ideal conditions for family-owned businesses to thrive."
"The significant contribution of family businesses to the emirate's economy underlines their key role as an engine for economic growth. This impact will be further enhanced through legislation designed to develop a favourable business ecosystem, together with specialised training aimed at helping family businesses to overcome challenges, elevate governance standards, and ensure a smooth transition of leadership between generations."
He added, "We at Dubai Chambers are committed to supporting the success of family businesses by representing their interests, enhancing their competitiveness, and advancing the capabilities of the next generation of leaders. The Dubai Centre for Family Businesses forms an essential part of our strategy to ensure a business environment that drives the growth and sustainability of family businesses in the emirate."
The Centre has also launched a series of programmes to raise the global competitiveness of local family businesses including the Dubai Family Businesses Leadership Programme, developed in partnership with the Mohammed bin Rashid Centre for Leadership Development; the Next Generation Training Programme; the Governance Series; and the Advisors' Certification Programme. The programmes are aimed at preparing new leaders, educating family members on vital issues, raising awareness of governance, developing certified advisors, and fostering the growth and success of family businesses.
A new international centre for family businesses
In March this year, Dubai International Financial Centre (DIFC), launched the DIFC Family Wealth Centre, the first in the world to create such a unique offering.
The DIFC Family Wealth Centre offers advisory and concierge services, certification, advisor accreditation, and education. Additionally, the Centre supports outreach and high-end networking, conducting research and issuing publications, as well as offering assistance with dispute resolution.
The DIFC Family Wealth Centre aims to unite family-owned businesses and ultra-high-net-worth individuals (UHNWIs) on a global scale to safeguard and enhance this sector. Through an array of support services, the Centre seeks to expedite the growth of local family businesses and entice family enterprises and UHNWIs from around the globe. Considering that approximately Dhs3.67 trillion in assets is expected to transition to the next generation in the Middle East within the next decade, this initiative is poised to be a vital player in fulfilling Dubai's dedication to assisting family businesses.
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