Dubai Chambers has set up a dedicated centre for family owned businesses, a critical part of the emirate's private sector economy, to help them to navigate challenges such as succession planning and achieving sustainable growth.
All family businesses in the emirate, regardless of their size or the volume of their turnover, will be able to avail services offered by the Dubai Centre for Family Businesses, which aims to make corporate governance an integral part of growth and continuity strategy of family owned private companies, Abdul Aziz Al Ghurair, chairman of Dubai Chambers, said on Tuesday.
“More than 70 per cent of [Dubai’s] GDP [gross domestic product] comes from private sector. It is significant for Dubai to see these private sector [companies] succeed,” he told reporters at the centre's launch ceremony at Dubai Chambers.
The centre was formally launched by Sheikh Maktoum bin Mohammed, First Deputy Ruler of Dubai, Deputy Prime Minister and Finance Minister, who said “ensuring the growth and sustainability of family businesses is a strategic priority” for Dubai.
“Family businesses represent a key pillar of the sustainable development process and a cornerstone of the future economy,” he said in a statement issued by the Dubai Media Office.
"Our vision is ambitious,” Sheikh Maktoum said.
“Family businesses are important partners in our economic growth. Their role is vital, their contribution is essential and their sustainability and continuity are a priority.”
A big part of Dubai’s success story is private business establishments, which have played a critical role in the building and shaping of the emirate’s economy.
“The size of the family business in the last 50 years has changed from small business … to multibillion-dollar business, so it does play a very critical role in the in the economy,” Mr Al Ghurair said.
“Therefore, it is becoming all the more critical to ensure that the transition from the founder to the next generation becomes very smooth and trouble free.”
The new centre aims to engage with the next generation of family businesses in the emirate and prepare them to take the reins when required, said Mr Al Ghurair.
“Involvement of the next generation early on in their business is critical so they are aware of the challenges and opportunities,” he said.
Family owned businesses are key drivers of the UAE economy, the second largest in the Arab world.
These enterprises have grown rapidly in the past few decades across sectors such as manufacturing and trading to retail, hospitality and financial services.
Family businesses range from small and medium outfits to multibillion-dollar holding companies controlling retail, hospitality, property and banking businesses.
These companies account for a vast majority of jobs, and are critical in boosting economic activity through their supply chain ecosystems.
In 2021, the UAE Ministry of Economy said it was considering new policies to help family businesses further grow and increase their economic contribution as the country pursues its long-term economic development growth.
In February, the Dubai International Financial Centre also finalised regulations to enable more family owned businesses to start operations from its Global Family Business and Private Wealth Centre.
Mr Al Ghurair said Dubai Chambers had signed a co-operation agreement with the DIFC, one of top financial centres in the Middle East, Africa and South Asia, for the two bodies to work closely to bring more international family offices to the emirate.
“We will attract and encourage family business offices from around the region, around the world, to move to Dubai and to move to [the] DIFC to take advantage of the legal structure and the framework we have here,” he said.
The new centre will provide consultation services to family owned businesses in terms of succession planning, as well as awareness seminars on corporate governance, sustainability and issues relating to business continuity.
By incorporating corporate governance into their business DNA, these companies will be better prepared to become listed companies, Mr Al Ghurair said.
However, it is not centre’s mandate to prepare them for initial public offerings, he said.
The centre will guide these companies on the merits of becoming a listed company and will introduce them to consultants and advisers if required, he said.