The regenerative power of family businesses

Transgenerational entrepreneurship

1 min read

The UAE has taken steps to support familyowned businesses, including approving a law that allows family businesses to be listed on the country’s financial markets. In January 2022, the President, Sheikh Khalifa, issued a new family business ownership governance law to facilitate the transition to successive generations. The new law prevents selling shares or dividends of family-owned businesses to people or companies outside the family, and requires prior approval from family partners before a shareholder sells an equity stake to a non-family member.

In addition, in September 2022, the UAE launched a programme that aims to double family-owned businesses’ contribution to the nation’s gross domestic product to $320 billion by 2032, and help them become more innovative and adopt new technologies: Thabat Venture Builder. This is the first such initiative in the region, and will guide companies through a five-month programme to help them transform ideas into viable projects.

The top ten family businesses in the region employ 600,000 people and have a net worth of more than USD 31 billion (AED 114 billion).

Family-owned businesses contribute 60% of the country’s GDP and 80% of the nation’s workforce, and account for about 90% of private companies in the UAE.

Around 38% of businesses are still chaired by the first generation while 47% are run by the second generation; a meagre 15% are managed by the third generation or later.

What is the secret of family business resilience?

How do family businesses grow from generation to generation and stay ahead of the competition?