It is every commercial or charitable business that is characterized by the following two features:

•    - Majority of the capital belongs to an individual or to a family.
•   - The management is vested in the hands of founder and/or his sons.

  The family business is usually composed of three major components:

1. The family office, which is responsible for management of family's investments worldwide.
2. Companies directly belonging to the family either by 100% ownership or by absolute majority.
3. Office for management of charitable works.

It is noticed by any specialized observer that most rich Arab families do not own family private office that manage their investment worldwide. These families frequently fall victims of individuals that take the advantage of this situation and hunt these families during their tours abroad. The individuals offer their services in marketing assets that are sold to the families at big prices that may reach tenfold of the real value. We experienced tens of deception examples involving sale of old antiques or movable assets for Arab families who were cheated due to non-existence of a specialized office for management of the family business. We, in the Family Business Development Centre establish and arrange for a private family office to serve you and your family and to assist in employment of suitable staff and selection of the proper environment for registration of the office.

It is important to note that charitable offices belonging to the families are deemed as family business that needs special care and development. Hence if you wish to develop the charitable office of the family, we will start with you from the Family Business Development Centre. Then the office works will be developed through "Philanthropic Works Service Centre" . The establishment of the family charitable office is necessary for control of charitable spending of the family, and for upgrading of efficiency of charitable works to an imaginable level. The effects of the professional management clearly appear in raising up the efficiency of the available resources and their ideal exploitation.

We concentrate on reconstruction of family companies for many reasons. We will focus on two reasons because they help in explaining the reality of family companies within the sphere of our interest.

First reason :

The importance of family companies in the world as general and in Arab Gulf region in particular. This importance involves numerous aspects as follows:

  First aspect : The family companies are the basic nucleus from which most companies evolve worldwide, and thereafter they transfer to another type of ownership.

  Second aspect: They represent a big percentage of world companies. In the USA, the number of family companies  is approx. 20 million, representing about  49% of the national product. In the European Union countries these companies represent 70-95% of the total number of existing companies, and their contribution to the national product  is approx. 70%. In the Arab Region, family companies represent about 95% of the total number and their contribution to the Arab economy is approx.  70%, with total assets exceeding trillion dollars. In the Arab Gulf states, family companies constitute  95% of the commercial activities in the region (Source : Report of  E & Y  Company for Family Companies).

  Third aspect: The investments of family companies cover all fields of investments. The above-mentioned report indicated that 72% of the Arab family companies are engaged in the retail sale sector and consumer sector, 48% in construction and real estate sector, 32% in the industrial sector, 12% in power sector and chemical materials. Moreover, the report shows that 60% of these companies intend to diversify their business by entering into new sectors. This is in addition to the indirect investments of these companies in numerous fields through minority shares and investment portfolios.

  Fourth aspect: Investments of family companies were – and still – the recourse for government at time of crisis, where the latter seek companies assistance in financing big projects and infrastructure projects. The partnership between the government and the private sector is still a subject of interest for the two parties a matter that puts a big developmental burden on family companies.

The second reason for our interest in family companies:

The risk that faces the future of family companies if their position and structure is not properly settled. Several studies revealed that seven (7) out of ten (10) family companies fail in implementing the transfer process to the second generation, while only one company out of ten reach the third generation.

What is the solution?

The study of E & Y Company for Family Companies recommended the following number of solutions to encounter the possibility of collapse of family companies when they transfer from one generation to another:

• The first thing to be done is the strategic planning of the company's business future.
• The second is the clear organizational chart.
• Then comes the necessity of forming an effective board of directors to take the leadership which mostly constitute the point of crisis in family companies.
• Here comes the role of the Family Business Development Centre: which is distinguished by its international expertise in extending such services to family companies and their investments worldwide.

1.  - Establishment and development of family offices.
2.  - Establishment of proper investment strategies for the family.
3.  - Reconstruction of family investments for follow-up by family office.
4.  - Organization of the relationship between the family and various investment banks involved in family investments.
5.  - Establishment and development of philanthropic offices belonging to the family.
6.  - Establishment of the proper strategies for charitable family spending.
7.  - All services pertaining to development and reconstruction of family companies.
8.  - To formulate family's vision and its strategic issues, to draw up a constitution for various family business (Investment, philanthropic, social, building up of an image), to arrange for action in accordance with this constitution for various generation of the family and to establish a mechanism for development of the constitution from one generation to another.