Posted on November 16, 2016

Family businesses in Qatar and around the GCC must  focus on governance, succession and structure to ensure sustainability and bolster against external pressures according to experts speaking at an event hosted by Charles Russell Speechlys and KPMG, at which around 30 prominent members of family offices came together to discuss important issues facing the sector.  

Families own approximately 80 per cent of businesses in the Middle East and more than half of GCC family businesses are currently planning succession from the second to the third generation. For owners, this can be a complex stage in the business cycle.

According to Audit, Tax and Advisory firm KPMG, it is estimated that US$ 1 trillion of assets globally are likely to be transferred to the third generation during the next decade. However, what is less well known is that only approximately 30% of all family businesses successfully transition to the second generation with even fewer making it to the third and fourth generation, some estimates are as low as 12% and 3%, respectively. At the event, KPMG in Qatar’s Country Senior Partner, Ahmed Abu-Sharkh, focused on the importance of developing and maintaining good governance for the family, the owners and management to ensure business performance and sustainability. 

Abu-Sharkh said “Family businesses represent over 70% of the GCC’s private sector. However, despite this large proportion, many owners struggle to put effective governance frameworks in place to ensure that the business remains stable and viable. Having a strong vision and mission and a common set of values across the family is essential for success and ensuring longevity of the brand.”  Charles Russell Speechlys, the international law firm with offices in Qatar and Bahrain, emphasised the need for planning ahead in uncertain times to ensure family businesses preserve their unique business cultures and strong brands.

Rupert Copeman-Hill, Partner, Charles Russell Speechlys said: “Family businesses play a crucial role in the GCC economy - It’s a $100bn market in the GCC, and now more than ever it is crucial for family firms to look to consider their corporate and legal structures to ensure steady and successful transitions. Carefully considering when and how to restructure and having a clear understanding on compliance and tax optimisation can help family businesses compete with corporates, which may have fewer challenges.”