Benefits of Making Business in Guinea-Bissau | Buy & Sell Business

1. BENEFITS OF MAKING BUSINESS IN GUINEA-BISSAU WWW.MERGERSCORP.COM

2. At MergersCorp M&A International we help our clients confidentially buy and sell privately held businesses, aligning the interests of all parties for mutual success and satisfaction. It is our goal to make the process of either buying a new business or selling your current business as smooth and efficient as possible. We know how important confidentiality is to our sellers and we treat it with the utmost importance. WWW.MERGERSCORP.COM

3. BENEFITS OF MAKING BUSINESS IN GUINEA-BISSAU WWW.MERGERSCORP.COM

4. Country Overview Guinea-Bissau, country of western Africa. Situated on the Atlantic coast, the predominantly low-lying country is slightly hilly farther inland. The country also uses the name of its capital, Bissau, to distinguish it from Guinea, its neighbour to the east and south. Guinea-Bissau is bounded by Senegal to the north, Guinea to the east and south, and the Atlantic Ocean to the west. It includes the Bijagós (Bissagos) archipelago and other islands that lie off the coast. Its main island, Bubaque, forms part of the Orango Islands National Park, a habitat for saltwater hippos. On the mainland, the capital, Bissau, is a port with Portuguese colonial buildings in its old city center.

5. Executive Summary Guinea-Bissau’s population is dominated by more than 20 African ethnicities, including the Balante, one of the largest ethnic groups in the country, the numerous Fulani and their many subgroups, the Diola, the Nalu, the Bijagó, the Landuma, the Papel (Pepel), and the Malinke. About two-fifths of the population is Muslim. Among Christians, who make up about one-fifth of the population, Roman Catholicism predominates. The economy of Guinea-Bissau includes a mixture of state- owned and private companies. Plans for industrial development have been reduced, and those supporting agriculture have been increased.

6. Introduction – Doing business in Guinea-Bissau Guinea Bissau is ranked 174 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. Ease of Doing Business in Guinea Bissau averaged 177.92 from 2008 until 2019, reaching an all time high of 181 in 2009 and a record low of 172 in 2016. The country has some capacity for attracting FDI in the tourism industry. The sector has some potential that includes deep-sea fishing and scuba diving operations on the Bijagos archipelago. The country also has some historical and architectural interest

7. Conducting business in Guinea-Bissau In Guinea-Bissau there is main low which regulates foreign investments juridically – The Investment code (French – Code des investissements) (1991, modified in 1996). Besides this document, economic activity for foreign investors is determined in regulatory enactments on corresponding areas. The Investment Code of the Republic of Guinea-Bissau provides incentives for investment and guarantees against nationalization and expropriation. Payments and transfers are generally free of restrictions.

8. Taxation in Guinea-Bissau Total tax rate (% of profit) in Guinea Bissau was reported at 45.5 % in 2019, according to the World Bank collection of development indicators, compiled from officially recognized sources. Certain business tax rates are: Labor tax and contributions(% of commercial profits) - 24.8% Other tax payable by businesses(% of commercial profits) -5.6% Profit Tax (% of commercial profits) – 15.1% Merchandise Trade(% of GDP) – 46.22%

9. Trade Guinea-Bissau is the 168th largest export economy in the world. In 2017, Guinea-Bissau exported $273M and imported $323M, resulting in a negative trade balance of $50.4M. In 2017 the GDP of Guinea-Bissau was $1.35B and its GDP per capita was $1.7k. The top exports of Guinea-Bissau are Coconuts, Brazil Nuts, and Cashews ($252M), Non-fillet Frozen Fish ($15.2M), Special Purpose Ships ($2.95M), Other Oily Seeds ($861k) and Scrap Iron ($407k), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Rice ($48.4M), Refined Petroleum ($46.4M), Cement ($10.7M), Packaged Medicaments ($8.74M) and Malt Extract ($8.64M).

10. Banking in Guinea-Bissau Guinea’s banking system is loosely based on the rules and regulations governing the French banking system. Guinea’s formal financial sector consists of the Central Bank and several commercial banks. The financial sector is largely controlled by foreign-owned banks. The system has a narrow base, is very fragile, and is unable to meet the development needs of the private sector; hence, there is a thriving black market for foreign currencies. Commercial banks favor short-term lending at high interest rates (25% and up), as there is high potential for default. International banking institutions have reported harassment by the military in the form of robbery and attempted extortion.

11. Our M&A Process NEGOTIATION & CLOSE POST MERGER INTEGRATION (PMI) INTEGRATION (PMI) POST MERGER TARGET APPRAISAL APPROACH DUE DILIGENCE Key Areas  Target & market analysis;  Initial assessment of synergies & value drivers;  Indicative valuation;  Go or No-Go decision;  Preparation of transaction documents (NDA – Non- disclosure Agreement/LOI- Letter of Intent);  Select Transaction team;  Appoint advisors;  Consider funding ability.  Initial approach letter;  Signing of NDA;  Prepare & share initial information requests;  Formulation of LOI (Letter of Intent) & possible negotiations;  Initial meeting and Q&A;  Circulate information on the Target to the Transaction team.  Set scope of due diligence;  Set up VDR (virtual data room);  Coordinating of due diligence, further meetings and Q&A sessions;  Consider points relevant to the Post-Merger (PMI) phase;  Revisit indicative valuation & prepare detailed valuation based on due diligence findings;  SPA negotiations with the seller;  Development of final structure (share/asset deal) and final valuation;  Approvals;  Signing of SPA & Close.  Consider the extent of integration;  Development of 100 Day PMI Plan;  Consider short & long term objectives;  Estimate requirements to capture synergies;  Determine resource needs & optimal allocation. Parties Involved  CFO;  Head of M&A;  Accountants;  Corporate finance advisors;  Consultants.  Senior management;  CEO, CFO, CTO;  Strategy director;  Head of M&A;  Head of Business Development;  Consultants.  Company general counsel;  Lawyers;  Senior management.  Company general counsel;  Lawyers;  Senior management/HR. 11 © Midaxo 2018 www.midaxo.com

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13. MergersCorp.com The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. Member firms of the MergersCorp network of independent firms are affiliated with MergersCorp International. MergersCorp International provides no client services. No member firm has any authority to obligate or bind MergersCorp International or any other member firm vis-à-vis third parties, nor does MergersCorp International have any such authority to obligate or bind any member firm. Copyright © 2020 MergersCorp International. All rights reserved. 13 © Midaxo 2018 www.midaxo.com