Finance

UAE entrepreneurs lack succession plans, warns HSBC

June 12, 2025, 2:43 PM

In 2023 the Dubai Chamber identified a lack of succession planning as a pressing threat facing family-owned enterprises

48% have no succession strategy
MAF situation highlights issue
Contribute 40% of GDP

Almost half of entrepreneurs in the UAE have no formal succession strategy in place to protect their business or family wealth, according to a report from HSBC.

This failure to prepare points to a structural risk in one of the country’s most vital economic segments.

While 98 percent of UAE respondents are optimistic about their businesses, 48 percent have not put in place a plan for transferring their wealth or business assets, according to HSBC’s Global Entrepreneurial Wealth Report released earlier this month.

The findings come amid growing scrutiny of succession planning following the Dubai government’s intervention in Majid Al Futtaim Holding, one of the Gulf’s largest private conglomerates, to help resolve a long-running leadership dispute among heirs.

“The lack of succession planning for so many could hinder the legacy they are working so hard to build for themselves and the next generation,” said Aladdin Hangari, head of global private banking at HSBC Middle East.

Family businesses account for more than 90 percent of private enterprises in the UAE and contribute over 40 percent of GDP.

Many of these companies have grown from modest trading outfits into multi-billion-dollar groups with global footprints over the past five decades.

The issue is increasingly urgent. An estimated AED3.67 trillion ($1 trillion) in assets is expected to be transferred to the next generation in the Middle East over the next 10 years, according to the Dubai International Financial Centre.

In response to rising concerns, the Dubai Centre for Family Businesses was launched in May 2023 under the Dubai Chamber umbrella.

At the time, Dubai Chamber chairman Abdul Aziz Al Ghurair, himself a member of a leading business family, identified inefficient governance and a lack of structured succession planning as two of the most pressing threats facing family-owned enterprises.

“Ultimately, succession is not just about stability. It’s about ensuring our most iconic businesses continue to endure and grow with the nation they helped build,” said Najla Al-Midfa, vice-chairperson and managing director of the Emirates Growth Fund.