Damascus Trade Opens a Discussion on the Future of Family Businesses in the Capital Market

The Damascus Chamber of Commerce held a specialized dialogue seminar entitled "How to Convert Family Companies into Public or Private Joint Stock Companies and List on the Damascus Stock Exchange", in cooperation with First International Financial Investment Company and Al-Ajlani & Partners.

The seminar served as a platform to chart a new structural path for thousands of family businesses, which represent the main pillar of the local economy, in light of the complexity of competition and the changing investment rules that forced the transition from the logic of individual management to the organizational model to ensure growth and continuity.

Funding Targets

During the seminar, the Minister of Finance, Mohamed Youser Barnieh, announced an official government direction to provide integrated institutional support to facilitate this transition, expecting that the first phase will witness the successful transformation of about 50 family companies as an initial target before their final transition to the trading platform on the Damascus Stock Exchange.

Barnia called on commercial entities to adopt the option of voluntary and gradual transformation to protect financial entities from extinction resulting from the absence of planning when succession of generations, stressing that the ministry will work to simplify restructuring procedures and coordinate with financing entities, provided that companies commit to building a family charter that defines responsibilities, and preparing audited financial statements that enhance transparency and governance.

The Generational Trap

For his part, Haitham Al-Ajlani, the director of Al-Ajlani and his partners, warned of the dangers of the business community's adherence to the traditional "Al-Haji Company" model, which is based on absolute trust and centralization of the decision in the hands of the founder when business volumes expand. Al-Ajlani explained that the strengths of decision flexibility and speed of financing turn into hotbeds of dispute and weak disclosure when the estate is transferred, citing international statistical data that confirms that only 3%  of family businesses have the ability to survive and survive until the fourth generation.

Al-Ajlani recalled the previous restructuring attempts that followed the 2007 accommodative decree, noting that exchange rate fluctuations and successive economic crises in 2023 led to a sharp contraction, and that experience resulted in the transformation of only two companies.

Stock market stagnation

In a related context, the Director of the First International Company for Financial Investments, Rana Eskeef, revealed the extent of the stagnation suffered by the Damascus Stock Exchange, which includes only 27 listed companies since its establishment, considering that this digital scarcity represents a huge investment opportunity to attract large family companies by balancing between the regular and parallel markets.

On the other hand, the head of the Damascus Chamber of Commerce, Issam Griwati, attributed the previous slowness of some companies in turning into problems related to the tax system, which was described as unfair in previous periods, which kept financial blocs narrow and within closed family frameworks that hinder expansion and freedom of regional movement.