Family businesses drive Dubai’s economy and shape its economic model

Abdulaziz Al Ghurair:

Providing an ideal environment that stimulates growth and sustainability

Issa Kazem:

Legal framework with the highest levels of global control
60% of companies’ contribution to the state’s output, 40% in Dubai
1 trillion dollars financial wealth in the UAE 2026
90% of private companies in the country are owned by families

Dubai:

Dubai continues its relentless pursuit of exploring new horizons for growth and diversification of the economy within the framework of the “Dubai Economic Agenda D33” with its ambitious goals, which were announced by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, may God protect him, in early 2023, to draw a clear roadmap for economic development in Dubai for the next ten years, aiming to make it among the 3 largest economic cities in the world in 2033.

Family businesses play a prominent role in achieving these ambitious goals by moving the wheel of Dubai’s economy and shaping the emirate’s economic model based on a strategy based on effective partnership between the public and private sectors by providing the largest integrated financial system in the region, unique legal and legislative frameworks and infrastructure, and a flexible set of commercial regulatory structures and private wealth management services in accordance with the highest international standards that ensure the continuity of growth of this sector in the long term and contribute to the consolidation of Dubai’s position as a global center for leading financial institutions and companies.

basic pillar

Family businesses are considered one of the most important pillars of the UAE economy, as 90% of the private companies operating in the country are owned by families, according to a report issued by the Ministry of Economy.

Family businesses play an important economic role with pivotal contributions to the country’s GDP.

The Ministry of Economy estimates this contribution to be about 40% of the gross domestic product of the Emirate of Dubai, and 60% of the GDP of the UAE, according to a recent report issued by KPMG. The report confirmed that these companies are at the forefront in terms of job opportunities. It represents 80% of the total workforce in the country.

favorite destination

In an affirmation of strengthening Dubai’s status as a preferred destination for family businesses from various investment sectors, Dubai was keen to take measures and mechanisms to provide an incubating environment to support and develop family business, enhance its sustainability, develop its governance, and raise its contribution to the emirate’s overall economy, as a key partner in the path of economic growth, prosperity and diversification, according to the wise vision of the wise leadership aimed at establishing a comprehensive and facilitating legal framework to regulate the ownership of these companies, facilitate their transfer between generations, and support their continuity in a way that enhances the role of the private sector in economic growth.

Initiative package

Support for family businesses is embodied in a package of initiatives launched by the UAE in mid-2022, which began with the approval of the Federal Law on Family Businesses. Two centers for family businesses have been established, the first of which is the Global Center for Family Business and Private Wealth in the Dubai International Financial Center, and the Dubai Family Business Center under the umbrella of Dubai Chambers. The two centers are complementary in order to provide flexibility and an incubating environment for companies to implement governance and continuity of growth.

Promote growth

Last February, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, in his capacity as Ruler of Dubai, issued a decree establishing the Family Business Center in Dubai, with the aim of enhancing the sustainability and growth of family businesses in the emirate, within the organizational structure of Dubai Chambers.

In the middle of last May, and in implementation of His Highness’s directives to develop an integrated work system that supports the growth of this sector, His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance, inaugurated the work of the Center, to be the authority concerned with ensuring the sustainability and growth of family businesses in the Emirate of Dubai, and enhancing its economic contribution to serve the development plans of the Emirate.

The center provides technical and administrative support for family businesses, to ensure their sustainability, achieve smooth succession between generations, and prepare a comprehensive strategy to support and develop these companies in Dubai, in addition to its role in developing the administrative skills of partners in family businesses, their founders and members, and introducing them to government services provided to these companies.

Forecasting the future

Abdulaziz Al Ghurair, Chairman of the Board of Directors of Dubai Chambers, said: “Developing the reality of family businesses and issuing modern laws that support their growth comes within the framework of sustainability and future foresight for the Emirate of Dubai and the vision of its wise leadership, which has made Dubai a major center for business and a leading destination for investments. As the volume of family business in the emirate highlights the importance of developing its business, as a locomotive for economic growth and the competitiveness of the business community. The process of providing an ideal environment for family businesses comes in accordance with an innovative work methodology commensurate with Dubai’s leading position in supporting the business sector, and within the framework of an integrated system for the development of family businesses through standards of good governance and specialized vocational training that is in line with the requirements of family businesses, in addition to flexible consultations and clear legislation, which ensures a smooth transition of leadership and legacy, and increases the competitiveness of family businesses and their ability to face challenges and achieve success in the labor market.

He added: «We are committed in the Dubai Chambers to support family businesses, represent their interests, enhance their competitiveness, sustainability and growth, and advance their leadership. We consider the Dubai Family Business Center an essential part of our future strategy to provide a stimulating environment for the growth and sustainability of family businesses in the Emirate of Dubai.”

The first family wealth center in the world

And the Dubai International Financial Center had launched, in August 2022, a specialized center for family wealth, the first of its kind in the world, within the framework of the Dubai International Financial Center’s commitment to