Family Businesses to go Public in UAE
The UAE Cabinet has decided to approve a draft law amending provisions within the Agency Law to allow family businesses to go for IPOs (initial public offerings).
The move is regarded as a positive one by experts, as it will lead to multiple share classes in the country. Greater transparency, improved productivity and corporate governance are the expected outcomes of the law. It will also help in addressing the liquidity shortage issue in UAE markets.
Investors will get the opportunity to own shares in a variety of local companies and the law will also boost the stock market of the country. The public can avail new investment opportunities that were not accessible before. If the family enterprise is a reputed one, more people will be interested in investing.
The law is not just beneficial for the country’s economy, it will be helpful for family businesses as well. Family businesses will get more opportunities to access capital and trade their shares. The durability of such businesses can also be ensured once they go public, as they will get the required financial support to grow.
There are numerous family owned businesses in the UAE, and it represents a large part of UAE business community. As per reports, family-owned businesses contribute 60 per cent of the country’s GDP and 80 per cent of the nation’s workforce.