FAMILY BUSINESS IN SAUDI ARABIA
In Saudi Arabia, family businesses are the backbone of the Kingdom’s economy contributing SR 350 billion or its equivalent 25% of its gross domestic product, according to Jeddah Chamber of Commerce and Industry.
There are more than 5000 family businesses across the Kingdom, of which only 156 are enlisted on the Saudi bourse. This is indeed a small figure compared to the prospects the market holds.
There are obstacles that are present in the business market that prevent these family businesses from becoming joint stock companies. The government has the responsibility of making the environment conducive for the businesses to join the big market.
There are however other reasons that make the owners of these businesses hesitate on converting them to join stock firms, most importantly the issue of inheritance, technical difficulties and fear of losing family revenue.
All these are by far genuine reasons that may lead to the failure of the business if not considered keenly. The transformation would indeed lead to the opening of new investment opportunities for them and making their businesses flourish.
The move would also be accompanied by stability to millions of employees working in these companies.