The contribution of family businesses to the economy of the UAE is significant, accounting for approximately 60% of the country’s gross domestic product (GDP). This sector not only generates over 80% of job opportunities but also comprises nearly 90% of all private enterprises in the nation. Such impacts highlight the crucial role family businesses play in advancing the vision of “We the Emirates 2031,” which aims to boost the GDP to 3 trillion dirhams.
A Key Economic Pillar
The Ministry of Economy and Tourism has emphasized the importance of family businesses, which significantly contribute to economic stability and job creation. During a recent open discussion session organized by the ministry, representatives from six of the UAE’s largest family-owned companies gathered to discuss ways to optimize their operations within the robust legislative and regulatory framework established by the government.
Innovative Legislative Framework
H.E. Abdulaziz Al Naimi, Assistant Undersecretary for Entrepreneurship and Economic Affairs, highlighted the UAE’s strides in creating a comprehensive and competitive legal structure for this vital sector. He noted the introduction of the first-of-its-kind global legislation, Federal Decree-Law No. 37 of 2022 concerning family businesses. This legislation is complemented by four ministerial decisions that have established a “Unified Registry for Family Businesses,” governed the “Family Business Charter,” and outlined frameworks for share acquisition and multiple share classes.
Unified Registration and Support Mechanisms
According to Al Naimi, the registration process in the unified registry is currently operational and includes 18 companies. The registry provides essential services such as registration, issuance of certificates, and archiving of charters. This innovative approach aims to enhance the governance of family enterprises and facilitate smooth transitions between generations while also promoting expansion into new economic sectors.
Challenges and Solutions
The meeting also addressed how to further empower family businesses, focusing on ownership and management transitions across generations. Key challenges such as administrative discrepancies between generations were discussed, alongside how Federal Decree-Law No. 37 offers effective solutions for resolving disputes to ensure business stability.
The dynamic of family businesses in the UAE is not only pivotal to economic growth but also essential in fostering a sustainable future for generations to come. Emphasizing their contributions can pave the way for more structured support and development opportunities in an ever-evolving marketplace.