Benefits of Making Business in Cyprus | Buy & Sell Business

1. BENEFITS OF MAKING BUSINESS IN CYPRUS

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 CYPRUS WWW.MERGERSCORP.COM

4. Country Overview Cyprus is the largest island in the eastern Mediterranean and is situated south of Turkey. The two main mountain ranges are the Pentadactylos in the north and the Troodos in central and south- western part of the island. Between them is the fertile plain of Messaoria and became an independent nation on Aug. 16, 1960, after Greek and Turkish Cypriots agreed on a constitution, which excluded both the possibility of partition as well as of union with Greece. Makarios became the country's first president. Cyprus became an independent nation on Aug. 16, 1960, after Greek and Turkish Cypriots agreed on a constitution, which excluded both the possibility of partition as well as of union with Greece. Makarios became the country's first president. The island, geographically already part of Asia (Middle East), is located about 80 km (50 mi) south of the coast of Turkey, west of Syria and Lebanon, northwest of Israel, north of Egypt and east of Greece. The third largest island in the Mediterranean Sea has a land area of 9,251 km², including the Republic of Cyprus, Northern Cyprus (a country only recognized by Turkey), and the British Sovereign Base Areas of Akrotiri and Dhekelia.

5. Executive Summary A “golden-green leaf thrown into the Sea” and a land of “wild weather and volcanoes,” in the words of the Greek Cypriot poet Leonidas Malenis, Cyprus comprises tall mountains, fertile valleys, and wide beaches. Settled for more than 10 millennia, Cyprus stands at a cultural, linguistic, and historic crossroads between Europe and Asia. By legend the birthplace of the ancient Greek goddess of love Aphrodite, Cyprus's modern history has, in contrast, been dominated by tension between its Greek and Turkish inhabitants. Cyprus has been divided since 1974 when Turkey invaded the north in response to a military coup on the island which was backed by the Greek government. The island was effectively partitioned, with the northern third run by a Turkish Cypriot government and the southern two-thirds by the internationally-recognised government led by Greek Cypriots. United Nations troops patrol the "Green Line" dividing the two parts, and reunification talks have made slow progress. Cyprus has successfully diversified its largely agrarian economy into one based on services - including a large tourism sector - and light manufacturing. More recently it has also developed into an important financial hub, especially for investors from Russia and Eastern Europe.

6. Introduction – Doing business in Cyprus Establishing a company is an easy thing to do in Cyprus. The Cypriot govern is helping the foreign investors in its attempt to attract foreign capital especially by using an advantageous tax system and low red tape. The economy of Cyprus is said to be a high – income economy with very high Human Development Index. Cyprus enjoys a prosperous and a diversified economy. Key contributors to the Gross Domestic Product (GDP) of Cyprus are the Shipping industry, the Tourism sector, Property Rental market, and the service sector. The registration procedure doesn’t take longer than 10 days and the entrepreneurs are encouraged to open one of the types of business regulated by the Company Law: limited liability companies, public limited companies or company limited by guarantee or general and limited partnerships. Setting up of a company in Cyprus must begin with choosing a proper, unique name that can be checked at the Registrar of Companies. The memorandum of association, notarized and elaborated by a lawyer must be deposited, along with the specific documents at the Companies Section of the Department of Registrar of Companies and Official Receiver.

7. Conducting business in Cyprus Property Rental Business Property Rental Business is indeed a booming venture in Cyprus. Individuals and organizations rent office spaces, halls for their events, parking lots, amongst others. If you have the required capital to build an office complex in any business district in Cyprus, you will sure reap huge returns on your investment. Although, despite the facts that this kind of business is a long – term investment plan, you could still recoup your capital within a short period of time if you understand the drill in Cyprus. Educational Consultancy Services Cyprus can boast of having some of the finest Universities in the world and the good thing about most universities in Cyprus is that students are taught in English language thereby making it one of the destinations for international students. If you are looking in the line of establishing a service based business in Cyprus, then you should consider starting your own Education Consultancy Services. You can help international students secure admission and accommodation in Cyprus universities. You can as well guide students with their visa application processes, et al.

8. Taxation in Cyprus Income tax All companies that are tax residents of Cyprus are taxed on their income accrued or derived from all sources in Cyprus and abroad. The tax system in Cyprus is progressive. In other words, the higher your income, the higher the rate at which you will pay tax. In 2018 the tax rates for an individual are 20% - 35%. There is a reduced rate and/or exemptions that are granted for certain forms of income. SDC is imposed only on dividend, interest (most types), and rental income earned by individuals who are both Cyprus tax resident and Cyprus domiciled for the purposes of the SDC. For dividend (SDC rate of 17%) and interest income (SDC rate of 30%, except for corporate and Cyprus government bonds where a rate of 3% applies), SDC applies instead of PIT. For rental income (SDC effective rate of 2.25%), SDC applies in addition to PIT.Non-tax residents are exempt from SDC for all their income, whether earned from Cyprus or foreign sources. This exemption also applies to individuals who are Cyprus tax resident but not Cyprus domiciled for the purposes of SDC. Anti- abuse provisions apply. Your first €19,500 of income is tax-free. Tax rates then start at 20% and rise progressively to 35% for income over €60,000.

9. Trade Cyprus is the 115th largest export economy in the world. In 2017, Cyprus exported $3.59B and imported $9.6B, resulting in a negative trade balance of $6.02B. In 2017 the GDP of Cyprus was $22.1B and its GDP per capita was $34.5k. The top exports of Cyprus are Refined Petroleum ($625M), Packaged Medicaments ($342M), Cheese($216M), Passenger and Cargo Ships ($138M) and Planes, Helicopters, and/or Spacecraft ($107M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Refined Petroleum ($1.29B), Passenger and Cargo Ships($816M) , Cars ($514M), Other Sea Vessels ($424M) and Recreational Boats ($295M). The top export destinations of Cyprus are Greece($421M), Israel ($339M), Libya ($301M), the United Kingdom ($234M) and Germany ($159M). The top import origins are Greece ($1.74B), Turkey ($734M), Italy ($693M), South Korea($642M) and Germany ($584M).

10. Banking in Cyprus Ancoria Bank Ltd is a newly established Cyprus bank, licensed, registered and supervised by the Central Bank of Cyprus. We offer a range of personal and business banking products and services you can access online or from our Banking Centres in Nicosia, Limassol and Larnaca.Foreigners in Cyprus are lucky to be supported by expat assistance at most banks. You’ll find English-speaking representatives who are trained to guide you through financing, account setup, loans and other transactions. The largest bank in Cyprus. Number of branches: 121 in Cyprus, 4 in the UK, 1 in Romania with representative offices in Greece, China, Ukraine and Russia. The banking sector in Cyprus comprises domestic banks and international banks with Cyprus-based subsidiaries or branches. Beyond the traditional deposit and lending services, banks in Cyprus operate under the universal banking model as they offer a diverse range of products and services.

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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