The UAE Cabinet approved a draft law to allow family-owned companies to list on the UAE's stock markets, according to state-run news agency Wam.
The draft law amended provisions in the country's "Agency Law", which regulates commercial agency and distribution, to target the country's family-owned businesses and provide opportunities for growth in the future, Wam said on Saturday without providing details on the amendments. It will permit family-owned companies to turn into public joint stock companies.
The draft law will "bolster the capabilities and continuity of family-owned companies and establish rules for their governance," the UAE Government Communication Office said in a tweet on its official Twitter account.
Family businesses have a long-standing history in the Gulf and are one of the key pillars of the economy, accounting for a large segment of the region’s non-oil gross domestic product. However, regional economies are facing the reality of weaker oil prices, introduction of VAT and workforce localisation – changes that family businesses must adapt to as they undergo generational transitions.
The amendments to the Agency Law come amid efforts to keep pace with economic developments and investment requirements in line with international best practices, according to the government tweet.
The draft law, which targets UAE nationals and foreign investors, will bolster the competitive environment of the UAE's economy and guarantee a high standard of services, the tweet said.
The proposed law will offer family businesses protection from defaulting and encourage UAE citizens to engage in business activities and invest in public shareholding companies while protecting their interests, WAM said, citing the Cabinet Secretariat.