The Gulf’s family businesses have a growing succession problem

Governments are nudging them, but it’ll be messy

This article has been kindly reproduced with permission from The Economist and was published on 29 January 2026.

In November 1995 Majid al-Futtaim opened his first shopping mall, then Dubai’s largest. Shortly before, the Emirati merchant had fallen out with his cousin over business—so acrimoniously that the royal family intervened. He went on to build a conglomerate that sprawled from the swanky Mall of the Emirates, with its giant indoor ski slope, to hotels and homes; it spread across the region and beyond. In 2021 Futtaim, who owned almost all the shares, died, aged 87. Another bitter row broke out, this time among his several heirs. Last summer the government stepped in to restructure the group.

The succession squabble was not the Gulf’s first. But quarrels like it are increasingly important. Family firms are economic linchpins. In the United Arab Emirates they contribute 60% of GDP. The Majid al-Futtaim group, with $19bn in assets and more than 40,000 staff, is one of the UAE’s biggest employers. Saudi Arabia’s family businesses produce more than a quarter of its GDP and employ about half of its workforce. Such firms are often loosely structured and lack plans for when the patriarch passes on. As the Gulf’s sheikhs and princes hope to diversify away from oil to build broader, sturdier economies, encouraging succession planning is becoming an urgent task. It is not an easy one.

In Saudi Arabia almost two-thirds of family firms do not have a succession plan, according to the National Centre for Family Businesses (NCFB), a non-profit. Large families (several wives, many children) complicate matters. So do Islamic inheritance laws. For instance, male heirs get more than their sisters, in part because they are expected to care for their wives and mothers. Executives say tensions are bubbling at a few big Saudi firms. Nine in ten business owners in the UAE struggle to divide assets fairly, compared with six in ten worldwide, reckons UBS, a Swiss bank.

As businesses have grown, so has the cost of inaction. By 2035, $500bn-700bn across the region will be transferred from founders to heirs. For many, this will be the first such transition, says Francesco Malatesta of McKinsey, a consultancy. Officials fear economic damage if assets are tied up in disputes. According to the Dubai International Financial Centre, a special economic zone, by 2030 about one in four estates in the Gulf will “transfer without predefined rules or instructions”. That could leave $49bn of capital unclaimed and $123bn trapped in legal processes.

“What’s at stake is big; and we want to make sure these enterprises continue to exist regardless of owner,” says Ayth al-Mubarak, who runs the NCFB. It set up a dispute-resolution process last year; 170 families have already gone through it.

Officials are loth to be seen to meddle. But they are nudging businessmen to clean up governance structures and separate personal assets from those of their firms. They are also discussing whether family-run firms (or at least those “too big to fail”) should be subject to minimum, legally enforceable governance standards. Some large firms that were founded as sole proprietorships are still organised as if they were small businesses.

In 2022 the UAE introduced family-business guidelines and laws laying out rules on share buy-backs, multiple share classes, directors’ rights and ownership; so did Saudi Arabia in 2023. Last year Emirati officials met prominent families, encouraging them to act on succession plans.

With such tools and laws, one adviser says, Gulf families could probably follow Sweden’s Wallenbergs, whose sixth generation is stepping up to manage the family firms and foundations. But getting the Gulf’s generations on the same page has proved harder. Few younger heirs want to run food-processing or oil-services businesses like their fathers; they are keen on tech startups and digital assets. Some want to bring in outside capital, or even exit. The “notion of losing control” is uncomfortable for the patriarchs, Mr Malatesta says. Doing nothing could be worse.