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Benefits of Making Business in Nigeria | Buy & Sell Business

<br>At MergersCorp we help our clients confidentially buy and sell privately held businesses, aligning the interests of all parties for mutual success and satisfaction.<br><br>Find more at: http://mergerscorp.com

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Benefits of Making Business in Nigeria | Buy & Sell Business

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

  4. Country Overview Nigeria a country located in West Africa along the gulf of Guinea on the Atlantic Ocean, is a federal constitutional republic comprised of 36 states and its Federal Capital Territory, Abuja. English is the official language of Nigeria, and its currency is the Nigerian naira (NGN) Nigeria became the largest economy in Africa after rebasing in 2014. Niger covers an area of 923,768 sq km (356,669 sq miles). The Major languages spoken in Niger are English (official), Yoruba, Ibo, Hausa. The main Religions followed are Islam, Christianity, indigenous beliefs A key regional player in West Africa, Nigeria accounts for about half of West Africa’s population with approximately 202 million people and one of the largest populations of youth in the world. Nigeria is a multi-ethnic and culturally diverse federation which consists of 36 autonomous states and the Federal Capital Territory.

  5. Executive Summary With an abundance of natural resources, it is Africa’s biggest oil exporter, and has the largest natural gas reserves on the continent. The country held national elections in 2019, for the sixth consecutive time since its return to democracy in 1999. The gross domestic product (GDP) is estimated at 397 billion United States dollars (USD) for 2018 As the seventh most populous country in the world, Nigeria is also rapidly expanding its infrastructure and witnessing foreign and domestic investment from major players in the engineering and construction industry as well as the telecommunications sector. The financial services segment also continues to expand in Nigeria as international banks and investors look to capitalise on the expansion of the West African market.

  6. Introduction – Doing business in Nigeria The country now ranks 131 on the World Bank's Doing Business 2020 index. The west African nation moved up 15 places from its 2019 spot and has been tagged as one of the most improved economies in the world for running a business. Nigeria is a middle income, mixed economy and emerging market, with expanding financial, service, communications, technology and entertainment sectors. It is ranked as the 21st largest economy in the world in terms of nominal GDP, and the 20th largest in terms of Purchasing Power Parity. It is the largest economy in Africa; its re-emergent, though currently underperforming, manufacturing sector is the third- largest on the continent, and produces a large proportion of goods and services for the West African sub region.

  7. Conducting business in Nigeria Registrable business organizations in Nigeria include: 1. A company limited by shares (Ltd or Plc) 2. A company limited by guarantee (Ltd/Gte) 3. An unlimited liability company (Ultd) Any of the above companies may be a Private Company or a Public Company. 4. Business Name (registered as Sole Proprietorship or Partnership) 5. Incorporated Trustees (usually formed for not-for-profit or charitable purposes) Companies must have a Memorandum of Association and Articles of Association (MEMART), a CAC accredited Solicitor can assist you draft a MEMART to suit your business objects and file a copy of same at the Corporate Affairs Commission (“CAC”) registry; make payment of stamp duties on the incorporation deeds and register the company as a legal entity. Company’s MEMART or Business Name’s Partnership Deed will deal with ownership and management issues and contain the rules governing how the business is run.

  8. Taxation in Nigeria The various tax rates are : The Personal Income Tax Rate in Nigeria stands at 24 percent. The Corporate Income Tax is generally levied at a flat 30% rate, but is reduced to 20% for smaller companies (with a turnover not exceeding NGN 1m) operating in the manufacturing industry and wholly export-oriented. Value Added Tax (VAT) in Nigeria is levied on all products and services traded within the country and payable to government at a 5% rate, one of the lowest in the world. Withholding Tax (WHT): The Withholding Tax deductions are regarded as advance payments (or payments on account) of the relevant tax liability that will arise from the tax returns of the period concerned

  9. Trade Nigeria is the 49th largest export economy in the world and the 124th most complex economy according to the Economic Complexity Index (ECI). In 2017, Nigeria exported $46.8B and imported $34.2B, resulting in a positive trade balance of $12.7B. In 2017 the GDP of Nigeria was $375B and its GDP per capita was $5.87k. The top exports of Nigeria are Crude Petroleum ($35.6B), Petroleum Gas ($6.47B), Refined Petroleum ($774M), Cocoa Beans($660M) and Rough Wood($321M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Refined Petroleum ($6.27B), Passenger and Cargo Ships($1.73B), Wheat ($1.35B), Cars($944M) and Raw Sugar ($549M).

  10. Banking in Nigeria The Central Bank of Nigeria (CBN) serves as the country’s central monetary authority. Established under a 1958 Act of Parliament, the Nigerian central bank commenced operations in 1959. CBN oversees the operations of financial institutions and banks in Nigeria, helping ensure high banking standards and financial stability in the industry, as well as promoting an efficient payment system. The objects of the CBN are as follows: ensure monetary and price stability; issue legal tender currency in Nigeria ; maintain external reserves to safeguard the international value of the legal tender currency; promote a sound financial system in Nigeria; And act as Banker and provide economic and financial advice to the Federal Government.

  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

  12. Looking to Buy or Sell a Business? CONTACT US NOW FOR A FREE BUSINESS VALUATION WWW.MERGERSCORP.COM

  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

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