Benefits of Making Business in gibraltar | Buy & Sell Business

1. BENEFITS OF MAKING BUSINESS IN GIBRALTAR 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 GIBRALTAR WWW.MERGERSCORP.COM

4. Country Overview Gibraltar (the Rock) is a peninsula situated at the southern tip of Spain, facing the northern coast of Africa and dominating the western entrance to the Mediterranean. Gibraltar's strategic importance has given it a long and eventful history and an influence on world events. The Rock now has approximately 30,000 inhabitants. English is the official language, but most Gibraltarians are bilingual in English and Spanish. The currency is the Gibraltar pound (GIP), which is equal to the British pound (GBP). Gibraltar is within the European Economic Area (EEA) and forms part of the Single European Market for services, including financial services. Gibraltar’s financial institutions are able to take full advantage of this position and are able to 'passport' their services throughout the European Economic Area, and therefore have access to a market of close to 500 million people.

5. Executive Summary Gibraltar's economy is based on services, the drivers of which have changed dramatically as a result of the significant run-down of the Ministry of Defence establishment and the military base. Traditionally, the local labour force had, in the main, provided support services to the Ministry of Defence, augmented by the retail sector and tourism. Developments over the last 20 years, in particular, have shifted the economic drivers from public to private sector control. The main sectors of the economy today are financial services, e- online gaming, tourism, a vibrant retail shopping district, and port services, including ship repair and ship conversion. New sectors being promoted are light manufacturing, telecommunications, and import/export operations. Constitutionally, Gibraltar is an overseas territory of the United Kingdom with internal self-government, except in matters of defense, internal security, and foreign affairs, which are the responsibility of the United Kingdom. The legal system is based on English Common Law as well as on local statute.

6. Introduction – Doing business in Gibraltar Gibraltar combines strong economic growth and a favourable tax regime with a warm, Mediterranean climate and vibrant lifestyle. It enjoys a solid global reputation for stability and efficiency with robust infrastructure and prudent regulation. Gibraltar’s small size and close-knit community delivers considerable speed to market with easy accessibility to key decision makers in the jurisdiction. For these reasons, and many more, Gibraltar hosts several major corporations spanning a wide variety of industries from insurance to gaming, property to crypto, and is the jurisdiction of choice for international businesses looking to establish a strategic European presence. .

7. Conducting business in Gibraltar • A company limited by shares • •A company limited by guarantee and having a share capital • •A company limited by guarantee and not having a share capital •An unlimited company with or without a share capital All companies must file accounts at the Companies Registry. In general, the extent of documents that need to be filed is determined by the size of the company. A company classified as “small” is only required to file an abridged balance sheet. The exemption does not apply to FSC-licensed entities. A company must register the name under which the trade is carried on at the Registry of Companies and Business Names. In general, a company must also be registered with the Employment Service, the Department of Social Services and the Income Tax Office (ITO). In addition, the company may need to be licensed by the Business Licensing Authority. Company There are four types of companies that can be incorporated in Gibraltar: •

8. Taxation in Gibraltar The individuals will be taxed on their income accordingly: for first GBP 4,ooo - 14% will be charged and for nect GBP16,000 17% will be charged and so a balanced 39% is charged. The standard corporate income tax (CIT) rate is 10%, with utility and energy providers and companies that abuse a dominant position paying a higher rate of 20%. For telecommunications companies, the 10% rate will apply to the gains and profits arising from their non- telecommunications business and activities. There is no VAT in Gibraltar.

9. Trade Gibraltar is the 165th largest export economy in the world. In 2017, Gibraltar exported $323M and imported $8.37B, resulting in a negative trade balance of $8.04B. The top exports of Gibraltar are Special Purpose Ships ($109M), Planes, Helicopters, and/or Spacecraft ($67.9M), Cars($44.4M), Refined Petroleum($42M) and Passenger and Cargo Ships ($39.1M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Refined Petroleum($6.22B), Recreational Boats($770M), Crude Petroleum($326M), Cars ($243M) and Coal Tar Oil ($92.8M).

10. Banking in Gibraltar The Gibraltar International Bank Limited was incorporated as a legal entity on 23rd April 2013, Banking is one of the main pillars of Gibraltar's economy, with assets totaling over EUR 7.8 billion, and many major International banks have offices in this country. The legal system in Gibraltar is similar to the one in the United Kingdom. Its legislation is based on English common law. The banking sector is regulated by the Financial Services Commissioner, appointed by the Governor of Gibraltar on behalf of the British Foreign and Commonwealth Office. Banking in Gibraltar offers many advantages to customers.

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