While more than 85 per cent of privately held businesses in the Middle East are family-owned, the first line of founders are now reaching retirement age and are finding succession planning a critical challenge, a report said.

Such families therefore have a significant role to play in relation to the region’s economies, investment environment and job market, added the spring 2015 issue of Middle East Point of View (ME PoV) published by Deloitte, a provider of audit, tax, consulting, and financial advisory services.

“The present day business environment is constantly evolving. The rapid growth of technologies, a demand for more social responsibility, greater expectations from employees, suppliers and stakeholders, and fierce international competition make the market very different to what it once was,” explained Walid Chiniara, partner, Deloitte Private, Middle East who leads advisory services to family businesses in the region.

“If a business is to remain sustainable and its handover to the next generation is to be successful, the founders of the family must see succession planning as a priority and give their successors the tools, flexibility and support to enable them to succeed.”

The report also throws the spotlight on real estate development laws in the region. Nick Witty, director, Real Estate Advisory at Deloitte Corporate Finance Limited (DCFL), highlights the Bahraini and Qatari governments’ intentions to enact real estate development laws intended to regulate market practice, thereby strengthening their respective markets and more importantly, promoting investor confidence.

Bilal Marroush, audit principal at Deloitte Middle East, in “Raising the ceiling of expectations”, said: “Winning the right to host the Fifa World Cup in 2022 and the implementation of the Qatar National Vision 2030 plan have greatly unleashed the potential in the country over the next decades and as such investments are expected to intensify and boost real estate development.”

The spring issue of the ME PoV publication also explores other hot topics in the region including reduced public sector spending, finance institutions’ need to diversify their income sources, and doing business with Chinese clients.

David Brazier, director, Infrastructure and Capital Projects at  DCFL writes about reduced public sector spending in “Virtue borne out of necessity?” He said: “The scale and speed of the change in the oil price has had a clear influence on the fiscal landscape for governments across the region. While the level and immediacy of the impact vary, many have signposted a recasting – or rethinking - of major investment programs in infrastructure”.

In “Rethinking the future”, Umair Hameed, director, Monitor Deloitte, Middle East, says: “ With regulators all set to introduce new capital adequacy requirements with interest rates at all-time lows, it’s a good juncture for finance companies to re-think their corporate strategy and business model, both in terms of sources of revenue as well as sources of funding.”

In “Winning with China, Inc,” James Babb, partner, client and industries, and Madeleine Chen Todd, manager, Chinese Services Desk at Deloitte Middle East noted: “When it comes to dealing with this culturally and linguistically distinct group of clients, it would certainly help to understand the whys and how’s of their decision-making in order to form mutually beneficial relationships that are built for success and build to last.” – TradeArabia News Service