Dubai launches initiatives to promote growth of family businesses

New measures are aimed at helping family businesses navigating the 'challenges and opportunities' of an evolving global economy

Family businesses in Dubai have an 'exceptionally promising' outlook. Reuters

Dubai has launched a series of initiatives to “future-proof” family businesses, promote their growth, bolster their competitiveness and help them navigate a quickly evolving global economy.

The emirate's geographical location, business-friendly environment, modern infrastructure and economic strengths make it an “ideal global base” for family businesses seeking to tap high-growth markets, the Dubai Media Office said on Sunday.

The outlook for family businesses in the emirate is “exceptionally promising” as financial wealth in the UAE is projected to surge 6.7 per cent annually to reach $1 trillion in 2026, up from $700 billion in 2021, which will spur significant growth in this sector, it said.

“The significant contribution of family businesses to the emirate’s economy underlines their key role as an engine for economic growth,” said Abdulaziz Al Ghurair, chairman of Dubai Chambers, which helps family-owned businesses to explore new areas of 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.”

Dubai's family businesses generate more than 40 per cent of the emirate's gross domestic product, according to government data.

About 90 per cent of private companies in the country are family-owned, as per a report by the UAE Ministry of Economy. They also employ more than 70 per cent of the private sector workforce.

Family businesses operate in a range of vital sectors including real estate, construction, retail and wholesale trade, hospitality and tourism, manufacturing, financial services, health care, education and technology.

However, the sector needs to address challenges brought by an evolving economy including digitalisation, cultural issues, governance and succession planning, according to a government statement.

Dubai has introduced new legislative and support measures aimed at helping family businesses steer through the challenges.

Earlier this year, Dubai Chambers announced the launch of the Dubai Centre for Family Businesses to educate family-owned companies on leadership transition, succession planning and growth. This includes helping to settle family business-related disputes.

This month, the centre introduced a new set of guidelines to assist family-owned companies in establishing governance frameworks that can aid a smooth succession process and ensure the continuity of family businesses.

The centre has also launched a series of programmes to raise the global competitiveness of family businesses on topics such as leadership, training, governance and developing certified advisers.

In March, the Dubai International Financial Centre also launched the DIFC Family Wealth Centre which offers advisory services, certification, adviser accreditation and education.

“We understand the critical role family businesses play in the global economy, and the DIFC Family Wealth Centre’s end-to-end service offering is designed to empower them to thrive, innovate, and preserve their legacies for generations to come,” Essa Kazim, governor of DIFC, said.

Over the coming years, Dubai is set to attract a significant migration of family businesses from other popular hubs like the US, UK, Luxembourg, Switzerland, France, Italy, Singapore and Hong Kong to the emirate.