Benefits of Making Business in Barbados | Buy & Sell Business

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

4. Country Overview Barbados is an eastern Caribbean island and an independent British Commonwealth nation. Bridgetown, the capital, is a cruise-ship port with colonial buildings and Nidhe Israel, a synagogue founded in 1654. Around the island are beaches, botanical gardens, the Harrison’s Cave formation, and 17th-century plantation houses like St. Nicholas Abbey. Local traditions include afternoon tea and cricket, the national sport. Barbados has around 1.7 million barrels of proven oil reserves (2011) but quarrying is the dominant form of mining or extraction activity. The construction, along with the tourism sector, is a significant source of employment on the island. The main exports are sugar and molasses, rum, chemicals and electrical components.

5. Executive Summary Historically, Barbados mostly produced sugar. The island has now diversified into tourism, manufacturing (with a host of incentives), informatics and financial services. Since the global financial crisis, the Barbadian economy has made steady progress. For the years 2015, 2016 and 2017, annual GDP growth was at 0.9%, 1.0% and 2.0% respectively. Barbados is a multiparty, parliamentary democracy. In 2008 national elections, voters elected Prime Minister David Thompson of the Democratic Labour Party (DLP). International observers assessed the vote as generally free and fair.

6. Introduction – Doing business in Barbados Opening a business in Barbados can be easy if you have the right information and preparation in place. Barbados has a stable democratic government and has a history of solid economic performance. Starting a business in Barbados is similar to starting one in the United States, with the same business formations such as limited liability companies, limited partnerships and nonprofit companies. There also are specific company types assigned to external business operations, such as the Barbados International Business Company.

7. Conducting business in Barbados Barbados is one of the most stable locations in the world for business. The island benefits from a long tradition of political and social stability, a highly-skilled and productive workforce, sophisticated international telecommunication services, and a superior infrastructure. Barbados is fast becoming a preferred low tax destination for international businesses and has attracted several businesses, particularly in the areas of Information Technology, Financial Services and Manufacturing. These businesses have found the legal, financial and accounting services offered by local Barbadian companies to be world-class. The Barbados Government focuses heavily on improving the investment climate of Barbados and on enhancing the infrastructure to support increasing business activity.

8. Taxation in Barbados The basic rate of income tax is 16%, and the higher rates are 33.5% and 40% (the latter being introduced from 1 August 2018). The basic rate applies to the first BBD 35,000 of taxable income; 33.5% applies to taxable income above BBD 35,000 and up to BBD 50,000; and 40% applies to taxable income in excess of BBD 50,000.

9. Trade Barbados is the 161st largest export economy in the world. In 2017, Barbados exported $422M and imported $1.7B, resulting in a negative trade balance of $1.28B. In 2017 the GDP of Barbados was $4.67B and its GDP per capita was $18.5k. The top exports of Barbados are Hard Liquor ($55.9M), Gold ($27.5M), Refined Petroleum ($25.1M), Packaged Medicaments ($23M) and Orthopedic Appliances ($22.5M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Refined Petroleum ($293M), Passenger and Cargo Ships ($78M), Cars ($58.8M), Packaged Medicaments ($42.6M) and Computers ($24.9M). The top export destinations of Barbados are the United States ($84M), Trinidad and Tobago ($36.4M), Jamaica ($35.6M), Switzerland ($28.2M) and Guyana ($24.3M). The top import origins are the United States ($615M), Trinidad and Tobago ($259M), China ($97.7M), Switzerland ($75.5M) and the United Kingdom ($66.8M).

10. Banking in Barbados The banking system in Barbados includes a number of banks servicing commercial, developmental, and offshore needs. The CBB, established in 1972, is responsible for the administration of monetary policy, regulation of exchange controls, and supervision of commercial banks and other financial institutions. Each bank has branches all over the island, offering a range of everyday personal and business services, and a host of ATMs for added convenience. The banks accept all major international credit cards. Barbados National Bank (BNB) is the island's oldest local commercial bank.

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