Dubai’s initiative to future-proof family businesses dynamic ways

Gulf Today, Staff Reporter

In Dubai’s awe-inspiring economic growth story, family businesses stand tall as architects of growth, innovation and value creation. Generating over 40 per cent of the emirate’s GDP, the sector represents Dubai's indomitable spirit of enterprise.

Now, as the emirate seeks to unlock a new phase of high-powered growth for its economy, the government is introducing a spate of initiatives designed to future-proof family businesses and bolster their competitiveness and growth capabilities in a rapidly evolving global environment.

Over the last year, Dubai has introduced new legislative and support measures aimed at helping them navigate the challenges and opportunities brought by a global economy in transition.

Family businesses are the mainstay of the UAE’s economy. A staggering 90 per cent of private companies in the country are family-owned, according to a report of the UAE Ministry of Economy. They are also major employers, with more than 70 percent of the private sector workforce earning their livelihoods from them.

 Abdulaziz Abdulla Al Ghurair, Chairman of Dubai Chambers, one of the institutions at the forefront of helping family-owned businesses explore new frontiers of growth, commented: "Dubai’s visionary leaders have established the emirate as a leading global hub for business and investments, and remain committed to creating the ideal conditions for family-owned businesses to thrive. The significant contribution of family businesses to the emirate’s economy underlines their key role as an engine for economic 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."He added, "We at Dubai Chambers are committed to supporting the success of family businesses by representing their interests, enhancing their competitiveness, and advancing the capabilities of the next generation of leaders.

The Dubai Centre for Family Businesses forms an essential part of our strategy to ensure a business environment that drives the growth and sustainability of family businesses in the emirate."The Centre has also launched a series of programmes to raise the global competitiveness of local family businesses including the Dubai Family Businesses Leadership Programme, developed in partnership with the Mohammed bin Rashid Centre for Leadership Development; the Next Generation Training Programme; the Governance Series; and the Advisors’ Certification Programme. The programmes are aimed at preparing new leaders, educating family members on vital issues, raising awareness of governance, developing certified advisors, and fostering the growth and success of family businesses.A new international centre for family businessesIn March this year, Dubai International Financial Centre (DIFC), the leading global financial hub in the Middle East, Africa and South Asia (MEASA) region, launched the DIFC Family Wealth Centre, the first in the world to create such a unique offering. The DIFC Family Wealth Centre offer advisory and concierge services, certification, advisor accreditation, and education.

 Additionally, the Centre supports with outreach and high-end networking, conducting research and issuing publications, as well as offering assistance with dispute resolution.

The DIFC Family Wealth Centre brings together global family-owned businesses and ultra-high net worth individuals (UHNWIs) to help preserve and grow the sector. By providing a range of support services, the Centre is set to not only accelerate the growth of local family businesses but also attract family businesses and UHNWIs from across the world. At a time when an estimated Dhs3.67 trillion in assets will be transferred to the next generation in the Middle East over the next decade, the initiative is set to play an instrumental role in delivering Dubai’s commitment to supporting family businesses.

DIFC is continuously innovating and advancing its ecosystem to help families manage their wealth including implementation of new legislative and regulatory measures to attract family businesses to Dubai. One such key framework is the DIFC Family Arrangements Regulations, specifically tailored to foster a conducive environment for family businesses anddrive transparency, accountability and stability, and offer the highest levels of protection and support.

Essa Kazim, Governor of DIFC, said: "By harnessing DIFC's wealth of experience and expertise, family businesses in Dubai can take their growth and succession planning to the next level. 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.”

DIFC’s new initiatives add to the series of legislative reforms that Dubai and the UAE have introduced over the past decade to promote the smooth transfer of wealth and ownership of family-owned assets and businesses, which include the issuance of trust and foundation legislation, and the implementation of clear inheritance procedures for non-Muslims.Over the coming years, many experts believe that Dubai’s increasingly attractive value proposition for global businesses is set to accelerate 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. With visionary strategies, unmatched infrastructure, and an environment that nourishes growth, Dubai could well emerge as the epicentre of a profound global shift in the family-owned wealth landscape.