Benefits of Making Business in Botswana | Buy & Sell Business

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

4. Country Overview Botswana, a landlocked country in Southern Africa, has a landscape defined by the Kalahari Desert and the Okavango Delta, which becomes a lush animal habitat during the seasonal floods. The massive Central Kalahari Game Reserve, with its fossilized river valleys and undulating grasslands, is home to numerous animals including giraffes, cheetahs, hyenas and wild dogs. Botswana's impressive economic record has been built on a foundation of diamond mining, prudent fiscal policies, international financial and technical assistance, and a cautious foreign policy. It is rated as the least corrupt country in Africa in the Corruption Perceptions Index by international corruption watchdog Transparency International. By one estimate, it has the fourth highest gross national income at purchasing power parity in Africa, giving it a standard of living around that of Mexico and Turkey.

5. Executive Summary Botswana, one of Africa's most stable countries, is the continent's longest continuous multi-party democracy. It is relatively free of corruption and has a good human rights record. Sparsely populated, Botswana protects some of Africa's largest areas of wilderness. Safari-based tourism - tightly-controlled and often upmarket - is an important source of income. Botswana is the world's largest producer of diamonds and the trade has transformed it into a middle-income nation. The country has one of Africa's most-advanced treatment programmes, however, and medicine for the virus is readily available.

6. Introduction – Doing business in Botswana Botswana is ranked 87 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The rank of Botswana deteriorated to 87 in 2019 from 86 in 2018. The Botswana government has been promoting start-ups, new business ventures, and inviting investors from around the world to boost their economy. Botswana is your best destination in Africa for investment, business and self-employment. Low tax regime, absence of exchange controls, access to Southern African market, political stability and availability of skilled and trained English-speaking manpower are the greatest advantages that no other African country may offer.

7. Conducting business in Botswana Business entities in Botswana • The Botswana limited liability company (LLC) • The Botswana public limited company (PLC) • The Botswana offshore company (IFSC company) • The Botswana branch • The Botswana representative office • The Botswana Partnership • The Botswana Sole Proprietorship Botswana allows free outflow of capital and profits, and does not exercise foreign exchange controls or restrictions – fostering investment activity. Botswana, being Africa’s longest standing democracy, has a stable political environment

8. Taxation in Botswana A non-resident is taxable on earned income in accordance with the PIT rates, but pays withholding tax (WHT) only at the rate of 15% for interest, commercial royalties, and management and consultancy fees, 7.5% for dividends, and 10% for entertainment fees, where such income is of Botswana origin. Foreign dividends are subject to income tax at a rate of 15 percent. However foreign investment income (interest and capital gains) accruing to a non-citizen resident in Botswana is not subject to tax.

9. Trade Botswana exports mostly diamonds (more than 60% of total exports), copper and nickel, beef and textiles. Botswana's main exports partners are United Kingdom (56% of total exports), South Africa, Israel and Belgium. In 2017, Botswana major trading partner countries for exports were Belgium, India, United Arab Emirates, South Africa and Singapore and for imports they were South Africa, Canada, Namibia, India and United Arab Emirates. Its main imports partners are South Africa (75% of total imports), China, Israel, Namibia and Zimbabwe.

10. Banking in Botswana Botswana's banking sector consists of a central bank (Bank of Botswana) and commercial banks: ABSA (formerly Barclays Bank) Botswana, Standard Chartered Bank Botswana, First National Bank Botswana, Bank of Baroda Botswana Ltd., Stanbic Bank Botswana, Capital Bank, African Banking Corporation, Bank Gaborone, State Bank. First National Bank of Botswana is a Botswana-based company engaged in the banking sector. The Bank, through Pick n Pay franchise, offers sales and service channels called FNBB Kiosk.

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