Benefits of Making Business in Chad | Buy & Sell Business

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

4. Country Overview Chad, landlocked state in north-central Africa. The country’s terrain is that of a shallow basin that rises gradually from the Lake Chad area in the west and is rimmed by mountains to the north, east, and south. Natural irrigation is limited to the Chari and Logone rivers and their tributaries, which flow from the southeast into Lake Chad. The capital, N’Djamena (formerly Fort-Lamy), is almost 1,000 miles (1,600 km) by road from the western African coastal ports. Although it is the fifth largest country on the continent, Chad much of the northern part of which lies in the Sahara has a population density of only about 20 persons per square mile. Most of the population lives by agriculture; cotton is grown in the south, and cattle are raised in the central region. Chad joined the ranks of oil-producing countries in 2003, raising hopes that the revenues generated would improve the country’s economic situation.

5. Executive Summary Chad is a centralized republic in which the executive branch dominates the legislature and judiciary. In April 2016 President Idriss Deby Itno, leader of the Patriotic Salvation Movement (MPS), was elected to a fifth term with 59.92 percent of the vote. While the election was orderly and had a high voter turnout, it was neither free nor fair, and there were numerous irregularities. It is bordered by Libya to the north, North Sudan and South Sudan to the east, the Central African Republic to the south, Cameroon and Nigeria to the southwest, and Niger to the west. Chad obtained its independence from France on 11 August 1960. It is currently divided into 23 regions. The official currency in Chad is the Franc de la Coopération financière en Afrique (Central African CFA) (XAF), and the official languages are French and Arabic.

6. Introduction – Doing business in the Chad Chad is ranked 182 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The rank of Chad deteriorated to 182 in 2019 from 181 in 2018. The mining sector in Chad is highly prospective and large areas for gold, bauxite, uranium, silver and alluvial diamonds have been identified. Business entities in Chad : A Chad LLC must appoint 1 director and 1 shareholder of any nationality for the incorporation process to be complete. The minimum paid-up share capital required is US$ 2,000 for Chad business setup. An annual audit is required if the company share capital is above US$20,000.

7. Conducting business in Chad Chadians appreciate an opportunity to “get to know” potential partners before beginning concrete discussions. Meetings usually begin with polite inquiries about personal and family health before getting down to business. It is helpful in Chad to supplement written communication with as many face-to-face contacts as possible. In professional settings, Chadians normally dress in business or traditional attire. In adherence with cultural sensitivities, women should dress conservatively for business meetings in Chad. French and Arabic are the official languages of Chad. Business correspondence, brochures, and advertising materials should all be prepared in French. Translation of materials into Arabic can also provide an advantage. Business calls are generally in French, but for some discussions, an interpreter who speaks Chadian Arabic may be necessary.

8. Taxation in Chad Personal Income Tax Rate in Chad is expected to be 60.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. In the long-term, the Chad Personal Income Tax Rate is projected to trend around 60.00 percent in 2020, according to our econometric models. The corporate tax rate is 35%.There is a minimum tax of 1.5% based on turnover and an additional XAF 1 million as the minimum/floor amount.

9. Trade Chad is the 144th largest export economy in the world. In 2017, Chad exported $1.06B and imported $475M, resulting in a positive trade balance of $586M. In 2017 the GDP of Chad was $9.9B and its GDP per capita was $1.94k. The top exports of Chad are Crude Petroleum ($980M), Insect Resins ($28.4M), Other Oily Seeds ($24.5M), Raw Cotton ($19M) and Propylene Polymers ($1.82M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Packaged Medicaments ($30.8M), Soap ($16.2M), Other Edible Preparations ($13.6M), Raw Iron Bars ($11.8M) and Insulated Wire ($11.8M).

10. Banking in Chad The banking sector is regulated by Commission de Banque de l'Afrique Centrale (COBAC), a regional banking agency. There are currently ten commercial banks operating in Chad. Credit is available from commercial banks on market terms, which average 16 to 25 percent for short-term loans. Chadian economy is largely depending on subsistence agriculture, herding and fishing. The formulation of a vibrant business environment is hindered by limited public institutions and unwelcoming regulatory framework. Corruption is so widespread in various levels that the Transparency International ranked the 2013 Corruption Perceptions Index of Chad 163rd out of 177 countries.

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