Family businesses across the Middle East are more confident about their near-term prospects than their global counterparts, but a set of structural challenges around leadership transition, AI governance, and cybersecurity is coming into sharper focus as those businesses grow.
That is the headline finding from the KPMG Middle East Family Business Report 2026, which surveyed 135 senior family business leaders across the region.
The survey found 84 per cent expect to outperform their competitors over the next five to ten years, compared to 72 per cent globally. Behind that confidence sits a degree of strategic alignment that is less common elsewhere: 85 per cent of respondents said they have a defined growth strategy for the next decade, and 80 per cent reported strong internal consensus on how to pursue it.
The foundations of that optimism are largely relational. Family reputation and brand equity were rated as key value drivers by 93 per cent of respondents, followed by shared values and purpose at 89 per cent. The region also skews more heavily toward long-term stewardship than the global average: 81 per cent said they would prioritise family unity even at the cost of lower financial returns, against 66 per cent globally.
Geographic expansion is where that ambition is pointing. More than a third of respondents (36 per cent) ranked expanding their geographic footprint as their single highest-impact growth driver through to 2035, with more than half placing it among their top two priorities. To fund that expansion, 55 per cent said reinvestment of earnings and shareholder equity is their preferred source of capital over the next two years.
The longer the time horizon, the more leadership and governance dominate the agenda. Business succession and next-generation readiness ranked as the single highest long-term concern, cited by 34 per cent of respondents as their top challenge through to 2035, up from 29 per cent who flagged it as a near-term issue.
Governance and strategic decision-making showed the sharpest rise between timeframes, climbing from 19 per cent in the short term to 27 per cent over the long term.
“Family-owned enterprises have driven regional economic growth for generations. Across the Middle East, they have repeatedly demonstrated that long-term thinking, strong values, and deep relationships are genuine competitive strengths. As they continue to expand into new markets and embrace new technologies, leadership continuity, governance and organisational capability become increasingly important for sustaining growth while remaining true to the principles that have defined their success for generations,” Abdullah Akbar, Partner and Head of Private Enterprise at KPMG Middle East said in a statement.
Technology is the other pressure point the report flags. While 67 per cent of family businesses are actively deploying AI, only 25 per cent have established formal governance frameworks to oversee it.
AI adoption and governance rank as the top near-term challenge, cited by 37 per cent of respondents. On cybersecurity, 56 per cent of respondents still treat it as an IT function rather than a board-level risk, a gap the report identifies as increasingly consequential as these businesses scale across geographies and generations.
Family businesses are estimated to account for 60 per cent of GCC GDP and represent a substantial share of private-sector employment in a regional economy approaching $4 trillion.
