Benefits of Making Business in Finland | Buy & Sell Business

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

4. Country Overview Finland is a Northern European nation bordering Sweden, Norway and Russia. Its capital, Helsinki, occupies a peninsula and surrounding islands in the Baltic Sea. Helsinki is home to the 18th-century sea fortress Suomenlinna, the fashionable Design District and diverse museums. Finland was a province and then a grand duchy under Sweden from the 12th to the 19th centuries, and an autonomous grand duchy of Russia after 1809. It gained complete independence in 1917. During World War II, Finland successfully defended its independence through cooperation with Germany and resisted subsequent invasions by the Soviet Union - albeit with some loss of territory. In the subsequent half century, Finland transformed from a farm/forest economy to a diversified modern industrial economy; per capita income is among the highest in Western Europe. A member of the EU since 1995, Finland was the only Nordic state to join the euro single currency at its initiation in January 1999. In the 21st century, the key features of Finland's modern welfare state are high quality education, promotion of equality, and a national social welfare system - currently challenged by an aging population and the fluctuations of an export-driven economy.

5. Executive Summary Finland, a Nordic country in Northern Europe, is bordered by Sweden to the west, Norway to the north, and Russia to the east, while Estonia lies to its south across the Gulf of Finland. It is divided into five regions, with Helsinki as the capital. The official languages of Finland are Finnish and Swedish, and the currency is the euro (EUR). Finland was initially a province, then a grand duchy under Sweden from the 12th to the 19th century, and later an autonomous grand duchy of Russia after 1809. It gained its complete independence in 1917. During World War II, Finland was able to successfully defend its freedom and resist invasions by the Soviet Union. In the subsequent half century, the Finns made a remarkable transformation from a farm/forest economy to a diversified modern industrial economy; per capita income is now among the highest in Western Europe. Finland has a highly industrialized, largely free-market economy. Finland is strongly competitive in manufacturing, principally the wood, metals, engineering, telecommunications, and electronics industries. Except for timber and several minerals, Finland depends on imports of raw materials, energy, and some components for manufactured goods. Forestry, an important export earner, provides a secondary occupation for the rural population.

6. Introduction – Doing business in Finland Finland is a business-friendly economy with a wealth of opportunities awaiting international firms, but gaining access to the market can be a troublesome task without the help of local experts. Organizations looking for quick access to growing markets of Northern Europe will find all they need and more in Finland, which is why the country has long been favored among international firms over its regional counterparts. There is a first class business environment and establishing a corporate entity is easy and fast. What’s more, the country’s functional infrastructure, modern logistics and communications networks make the day-to-day running of the business seamless, efficient and invariably profitable. The industrial economy is home to a thriving private sector and a business environment that is highly conducive to foreign direct investment (FDI). The regulatory environment is business- friendly and red tape is minimal, allowing the free market to reign in a transparent and open economy. But despite the obvious appeals of the Finnish economy to international investors, navigating the tax and regulatory environment can be difficult without prior knowledge of the business landscape.

7. Conducting business in Finland Here are the key sectors which provide business opportunities in Finland for 2017. Transport and logistics: Helsinki expands its railyard with €60 million, Tampere has begun building its tram network worth of €283 million, Helsinki and Espoo are planning a combined tram project worth of €275 million. Marine Industry: the Finnish marine industry is breaking records in orders, order books are filled for the next 10 years, cruise ships, passenger ferries, ice breakers, repairs and refurbishments of old ships.Energy, Cleantech and Environment: Tampere region will build a huge water treatment plant, Finland- Estonia gas pipe receives funding. Industrial investments: production plants and production lines, power plants, energy efficiency, material handling and equipment.

8. Taxation in Finland Finland Taxation of an individual's income is progressive. Foreign residents generally pay 35% on salary income and 30% on dividend, interest and royalties income. Reduced rates of tax or exemption are available for certain income earners. The standard rate of Finland corporate tax in 2018 is 20%. In 2018 the income tax rate (national tax) for an individual is between 6%-31.25%. In addition to direct taxation there is also municipal tax in Finland. Finland isn't the highest taxed country in Europe, but it is apparently near the top 5. It also ranks up with the highest tax rates anywhere in the world. Finland currently has a corporate tax rate of 20%, a maximum individual marginal tax rate of 53% and VAT (Value added Tax) of 24%.

9. Trade Finland is the 40th largest export economy in the world and the 8th most complex economy according to the Economic Complexity Index (ECI). In 2017, Finland exported $70.7B and imported $65.4B, resulting in a positive trade balance of $5.26B. In 2017 the GDP of Finland was $251B and its GDP per capita was $44.9k. The top exports of Finland are Refined Petroleum($5.23B), Kaolin Coated Paper ($4.69B), Large Flat- Rolled Stainless Steel ($3B), Cars ($2.96B) and Sulfate Chemical Woodpulp ($2.1B), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Crude Petroleum ($4.62B), Cars ($3.06B), Refined Petroleum ($2.41B), Vehicle Parts ($1.67B) and Packaged Medicaments ($1.53B). The top export destinations of Finland are Germany ($8.97B), Sweden ($6.66B), the United States ($5.55B), the Netherlands ($4.64B) and China ($3.95B). The top import origins are Germany ($10.7B), Russia ($8.37B), Sweden($6.74B), Chin a ($5.01B) and the Netherlands($3.76B).

10. Banking in Finland Nordea Bank Nordea bank provides the largest financial services in the Nordic region and is one of the largest Bank operating in the European Region. The bank is operating in around 17 countries. The bank is public listed and is traded in the Copenhagen Stock Exchange. The bank is around 200 years old and is around 10,000+ employees working for it. The bank provides services like Personal Banking, Wealth Management, Investment Banking, and Private Banking. Danske Bank Danske Bank was founded in the year 1871 and has more than 19,000+ employees operating in 15 countries. The bank has headquartered in Copenhagen and is a public listed company. The bank is operating into Insurance, Mortgages, Asset Management, Business Banking, Personal Banking, Mobile Payments, and other financial product. OP Corporate Bank PLC The bank has large operations and is one of the largest financial group in Finland. The bank was founded in the year 2015 and has its headquarters in Vallila, Helsinki. The bank has revenue of around 4 bn Euro and total employee count is around 12,000.

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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