The new family business law is set to strengthen the corporate sector and diversify the UAE economy by attracting investment in key sectors and contributing more to the country’s gross domestic product (GDP) in coming years, the experts mention.
The new law, which becomes effective this week, will follow best international practices and aim at enhancing corporate governance structure in the country. It will help double family-owned businesses’ contribution to the nation’s GDP to $320 billion in 2032 by preparing them for the future economy.
Analysts, economists and legal experts said the enactment of the Family Companies Law by the UAE government is a welcome piece of legislation which enables family businesses to overcome challenges when planning succession under the existing legal framework of the UAE Companies Law, the agencies said.
Family-owned companies in the GCC countries are relatively young, ranging in age between 40 to 60 years, and generate an annual revenue of nearly $100 billion, and 50 per cent of the owners of these companies include five shareholders or less, according to an analyst.
