Family businesses in the Middle East are the engines of growth and a driving force behind economic diversification/Bloombergby Kudakwashe Muzoriwa
The UAE Cabinet has approved a draft law allowing family-owned businesses to list on the country’s financial markets, according to local newswire, WAM.
The UAE, home to three stock markets, amended the provisions in the ‘Agency Law’ that regulates commercial and distribution agreements, allowing family-owned companies to turn into public joint-stock companies.
According to PwC, with a workforce contribution of 80 per cent and $1 trillion estimated to pass from one generation to the next within a decade, it is easy to see why this is a prioritised sector.
The UAE Cabinet General Secretariat stated that the amendments come within the framework to enhance the country's trade and investment development to boost the UAE's competitive business climate in line with international standards and regulations.
The changes are expected to further encourage UAE nationals to engage in business activities and invest in public shareholding companies while protecting their interests.
Furthermore, the new proposed law provides for the transformation of family-owned businesses to join the UAE's financial markets and encourages UAE nationals to engage in business activities.
The proposed draft law allow UAE nationals to invest in public shareholding companies and their commercial agencies with the least possible risk in investment, especially for small shareholders and owners of SMEs.
Family businesses in the Middle East play a particularly significant role in the region’s economy, so enabling their growth is high on both the private and public sectors' agendas. Many family businesses across the region have grown to become conglomerates investing in local real estate and many of their balance sheets are dominated by this asset class.