16 May 2023, Zawya
A new Dubai organisation focused on family businesses, a key component of the emirate’s economy, on Tuesday said it would support the growth of family firms and help them survive generational transitions.
Dubai Chambers, which represents the emirate’s business community interests, has set up the Dubai Centre for Family Businesses to educate firms on leadership transition, planning and growth, it said.
Dubai, a regional trade and tourism hub, also plans to start a family business dispute centre to resolve conflicts outside of the courts, Abdul Aziz Al Ghurair, chairman of Dubai Chambers, told Reuters.
Family-owned businesses contribute 60% of the United Arab Emirates Gross Domestic Product (GDP) and 80% of its workforce, consultancy KPMG said in a report last year.
“The size of the family business in the last 50 years has changed from smaller business to become multi-billion dollar businesses … it is becoming more critical to ensure that the transition from the founder to the next generation becomes very smooth, trouble free,” said Ghurair.
When Majid Al Futtaim, Forbes Magazine’s third-richest Arab businessman in 2021, died in December 2021, a special judicial committee was formed to weigh in on potential legal disputes with heirs. His conglomerate, Majid Al Futtaim (MAF), has roughly $16 billion in assets including an indoor ski resort in Dubai.
Involving and educating the next generation within family businesses before the death of the founder is important, Ghurair said.
“Sisters and mothers need also to be educated because someday they will be owners of this business, someday they will be asked to vote,” he said.
A new UAE Family Companies Law, which came into effect in January, aimed to improve how companies transition to successive generations.
“For the next two, three years, we have enough legislation to help us,” Ghurair said, adding that new legislation might be needed after that.