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Benefits of Making Business in Vanuatu | Buy & Sell Business

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Benefits of Making Business in Vanuatu | Buy & Sell Business

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

  4. Country Overview The Republic of Vanuatu is an island nation in the South Pacific Ocean, northeast of New Caledonia, east of Australia and west of Fiji. The Y-shaped chain of fourteen main islands between the South Pacific Ocean and the Coral Sea is of volcanic origin and home to several active volcanoes. The colliding Pacific and Indo- Australian continental plates provide for geological activities like earthquakes, tsunamis, cyclones, and volcanic eruptions, hardly tourist attractions. But Mount Yasur on Tanna Island is an easily accessible active volcano, and a major Vanuatu tourist attraction, especially at night. Highest point is Mount Tabwemasana, at 1,879 m (6,165 ft), located on the island of Espiritu Santo. The combined land area of the islands is 12,189 km², this is about the size of the Falkland Islands, or slightly larger than Connecticut. The archipelago has a population of 278,000 (in 2015), capital and largest city is Port Vila. Spoken languages are Bislama (English- based creole), English, French and various Austronesian languages.

  5. Executive Summary Vanuatu - a string of more than 80 islands once known as the New Hebrides - achieved independence from France and Britain in 1980. Vanuatu is a South Pacific Ocean nation made up of roughly 80 islands that stretch 1,300 kilometers. The islands offer scuba diving at coral reefs, underwater caverns and wrecks such as the WWII-era troopship SS President Coolidge. Harborside Port Vila, the nation’s capital and economic center, is on the island of Efate. The city is home to the Vanuatu National Museum, which explores the nation’s Melanesian culture. Most of the islands are inhabited; some have active volcanoes. Vanuatu is mountainous and much of it is covered with tropical rainforests. Like most of the area, it is prone to earthquakes and tidal waves. In 2015 it was hit by Cyclone Pam which caused widespread damage. Most of the people live in rural areas and practise subsistence agriculture. Local traditions are strong. Women, for example, generally have lower social standing than men and have fewer educational opportunities. The island of Pentecost is home to land diving, a precursor to bungee jumping, which is still practised.

  6. Introduction – Doing business in Vanuatu Vanuatu is better known as the region’s foremost financial center. However it also offers many local business opportunities and a favourable business environment for local investment. What are the advantages of investing in Vanuatu? For a start how about the following reasons:- • No Income taxes, • No corporate taxes on local and offshore income, • No withholding taxes, • No Capital Gains taxes (except on some real estate transactions), • No Death Duties, • No burdensome filing of audited account filings for companies with annual income of under VT25, 000,000. (fantastic for holding companies, i.e. in real estate etc) All this means minimal bureaucracy, less annoying office paperwork, filings etc. No ‘friendly’ tax collectors to deal with. More time to run and develop your business and to enjoy the unique life style Vanuatu has to offer.

  7. Conducting business in Vanuatu Every elected Government of Vanuatu have always encouraged and promoted local investment. The government is pro-active in taking initiatives in conjuncture with the private sector to streamline bureaucracy and fast track overseas investments in Vanuatu. There is extensive financial and legal expertise available. The Supreme Court of Vanuatu has jurisdiction to determine all matters. 'Local' Limited Company 'Local' companies are companies operating domestically; they may be limited by shares, by guarantee, or may be unlimited. Companies may be public or private. They have the following characteristics: • Public companies must have at least two directors, one of which must be resident in Vanuatu; • Private companies must have at least one director who must be a Vanuatu resident; • All companies must have a secretary; • Private companies restrict the right to transfer shares, may have no more than fifty shareholders, and the public may not be invited to subscribe to the shares;

  8. Taxation in Vanuatu In Vanuatu there are no taxes affecting individuals other than import duties (at varying rates), VAT at 12.5% (2012), a tax on rental income over VT200,000 in a 6-month period of 12.5%, and stamp duty on some property transactions, share transfers and some other transactions at rates of up to 1% (minimum VT2,500). The Sales Tax Rate in Vanuatu stands at 15 percent. Vanuatu Sales Tax Rate - data, historical chart, and calendar of releases - was last updated on February of 2020 from its official source. In Vanuatu, the sales tax rate is a tax charged to consumers based on the purchase price of certain goods and services. The benchmark we use for the sales tax rate refers to the highest rate. Revenues from the Sales Tax Rate are an important source of income for the government of Vanuatu. The Corporate Tax Rate in Vanuatu stands at 0 percent. Vanuatu Corporate Tax Rate - data, historical chart, and calendar of releases - was last updated on February of 2020 from its official source, The Corporate Income tax rate is a tax collected from companies. Its amount is based on the net income companies obtain while exercising their business activity, normally during one business year. The benchmark we use refers to the highest rate for Corporate Income.

  9. Trade Vanuatu is the 174th largest export economy in the world. In 2017, Vanuatu exported $207M and imported $244M, resulting in a negative trade balance of $37M. In 2017 the GDP of Vanuatu was $862M and its GDP per capita was $3.21k. The top exports of Vanuatu are Non-fillet Frozen Fish ($70.5M), Tug Boats ($70M), Copra ($17.2M), Molluscs ($8.18M) and Perfume Plants ($7.97M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Refined Petroleum ($38.8M), Poultry Meat ($6.83M), Baked Goods ($6.72M), Broadcasting Equipment($6.13M) and Delivery Trucks ($5.4M). The top export destinations of Vanuatu are Mauritania ($70M), Japan ($66M), the Philippines($18.4M), China ($13.7M) and South Korea($8.5M). The top import origins are China ($64.9M), Australia ($42.5M), Fiji ($30.6M), Malaysia ($22.9M) and New Zealand ($19.3M).

  10. Banking in Vanuatu National Bank of Vanuatu provides various general banking services. The Company offers personal banking, savings accounts, cheque accounts, term deposits, cash transfers, house and land loans, motor vehicle and other personnel loans, business banking, business loans, business overdrafts, business cheque accounts, bank guarantees, immigration bonds, term deposits, and rural banking services. VANUATU Branch Location Library is already full of BIC codes. With the help of such BIC codes, a person will be able to monitor the flow of money transfer, credit fund and direct debit transfers in the area of VU through Bank Wire Transfer without spending a lot of efforts. These branch locations are free and accessible for all the individuals in the stated country who are interested to keep their money protected and secured in all of the financial transactions of licensed banking institution. Such codes are composed of eight to eleven string characters which can help people to determine the name of the country and bank where a certain amount of money came from. With the help of these codes for money transfer and other financial transactions in a banking institution, a person will be able to determine if a certain amount of money was sent to its real receiver or not to prevent mistakes and issues in the bank wire transfer.

  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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