KPMG Report Lists Urgent Priorities for Middle East Family Businesses

As family-owned enterprises continue to power the region’s economic engine, a new global study reveals the key drivers that will determine whether these businesses simply endure or create lasting legacies for generations to come.

The Global Family Business Report 2025, launched by KPMG Private Enterprise in collaboration with the STEP Project Global Consortium, analyses the opinions of 2,683 CEOs across 80 countries. It highlights how family businesses can navigate a rapidly shifting global landscape, marked by generational transitions, digital disruption, evolving governance expectations, and rising social and environmental accountability.

Abdullah Akbar, Head of Private Enterprise and Family Business at KPMG Middle East commented: “Family businesses have long formed the foundation of the economies in the Gulf region, contributing significantly to employment, innovation, and national identity. But as we enter a new era of economic transformation in many of these geographies, businesses face an urgent need to modernize their governance structures. They will need to diversify their investments portfolios, explore options in respect to supply chain disruptions, invest in technological advances including GenAI, develop strategies to tackle  the war for talent and embrace the next generation of leadership. Succession planning is no longer optional—it is a strategic imperative for family businesses to withstand the length of time.

The report emphasizes that governance is a cornerstone of success. High-performing family businesses were found to be 10%more likely to have formal board structures in place, reinforcing the importance of sound and strategic decision-making. In fact, 67%of high-performing businesses globally had established boards, and in the Middle East and Africa, this figure soared to 89%—the highest of any region worldwide. This strong embrace of governance is a promising sign that family businesses in the region are positioning themselves for sustainable growth and cross-generational success.

Yet governance alone isn’t enough. The report finds that entrepreneurship and growth capital are becoming increasingly essential. Over the past 3 years, nearly 500 family businesses globally engaged in mergers and acquisitions, with 60%of the acquired companies also being family-owned. Family enterprises are increasingly seeking strategic, values-driven partnerships to fuel growth beyond organic expansion. Private equity firms are also taking notice, showing increased interest in well-run family businesses with proven performance and generational vision.

In Saudi Arabia alone, family businesses represent approximately 95% of establishments in the country according to figures by the National Centre for Family Business. They contribute 66% to the private sector’s gross domestic product and employing 56% of private sector workers. Similarly, much of the United Arab Emirate’s economy is dependent on the family businesses; roughly 90% of the privately-owned companies in the UAE employ more than 70% of the sector’s workforce and account for the 40% of the national GDP, as reported in a Dubai Chambers report.

These enterprises span critical sectors, from construction and manufacturing to retail, hospitality, and finance. As the region pushes forward with their economic transformation visions, long-term sustainability of these businesses will be central to achieving national growth targets. Many family groups are now also expanding into new sectors like technology, logistics, education and healthcare – opening doors to new investment and collaboration models.

The report also sheds light on the importance of intergenerational engagement. Despite the significant role of younger generations in shaping innovation and sustainability, only 52 % of next-generation family members are currently involved in strategic decision-making. This is a missed opportunity, especially as millennials successors bring fresh thinking on ESG, digital transformation, and impact investing. Meanwhile, nearly 40% of family members in the survey expressed concerns about the quality of communication within the family—pointing to a need for clearer roles, stronger dialogue, and shared purpose.

The report concludes with a call to action: family businesses must re-examine what success truly means in a changing world and a review and update their purpose, if required. Financial strength remains important, but so too does resilience, adaptability, and societal impact. As Saudi Arabia continues its journey toward economic diversification, those family businesses that embed purpose, governance, and entrepreneurship at the heart of their strategy will not only survive—but lead.

The Global Family Business Report 2025 offers a detailed roadmap for families seeking to future-proof their enterprises.