Benefits of Making Business in France | Buy & Sell Business

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

4. Country Overview France, in Western Europe, encompasses medieval cities, alpine villages and Mediterranean beaches. Paris, its capital, is famed for its fashion houses, classical art museums including the Louvre and monuments like the Eiffel Tower. The country is also renowned for its wines and sophisticated cuisine. France has also been influential in government and civil affairs, giving the world important democratic ideals in the age of the Enlightenment and the French Revolution and inspiring the growth of reformist and even revolutionary movements for generations. The present Fifth Republic has, however, enjoyed notable stability since its promulgation on September 28, 1958, marked by a tremendous growth in private initiative and the rise of centrist politics. France is one of the major economic powers of the world, ranking along with such countries as the United States, Japan, Germany, Italy, and the United Kingdom. Its financial position reflects an extended period of unprecedented growth that lasted for much of the postwar period until the mid-1970s; frequently this period was referred to as the trente glorieuses.

5. Executive Summary France is a major player in the world economy. It faces substantial challenges, including loss of business competitiveness on world markets. At the same time, France can boast a range of advantages which should help it to rise to meet these challenges. The implementation of certain necessary structural reforms partly depends on a further strengthening of regulatory governance policy. Since the OECD Review of Regulatory Reform of France published in 2004, France has undertaken a set of ambitious measures to improve regulatory quality; these measures constitute a major quality change. Paris is the capital city of France, as well as the country's largest city. Tourism has always been a major source of income for Paris. Paris is the capital city of France. It is located on the River Seine on the northern part of France. French section where the river flows into the sea. If you add the parts of rivers that flow partly in France and partly outside, the list would run like this: The Rhine would lead the list, followed by the Loire, Meuse, Rhone, Seine, Garonne, Moselle, Marne, Dordogne, and the Lot. The Loire is the longest river of France at 630 miles. The population of France was estimated to be 65,717,181 people. In 2019 the natural increase was positive, as the number of births exceeded the number of deaths by 226,363.

6. Introduction – Doing business in France When doing business in France it is important to be aware that the French Government has played a pivotal role in shaping French businesses since the Second World War. Interestingly, these interventionist policies have been largely accepted by mainstream businesses who have worked-hand in-hand with senior civil servants in the ministries. French protectionist policies have proven a challenge to remove and, although the French Government has partially or fully privatised several large companies, a strong administrative presence is still felt in the power, defence, public transport and financial sectors. Other large-scale obstacles to bear in mind when doing business in France is the fact the nation has a high unemployment rate of around 10% of the work-age population. Rigid and complex labour laws are partially responsible for limiting employment growth. The country also has the burden of high levels of public debt and national budget deficits.

7. Conducting business in the France As the world’s fifth largest economy, centrally located within the European Union, there is strong competition for market share in all French industrial and service sectors. American exporters to France generally face more competition from European companies than from Asian ones. Positioned at the heart of the world’s largest market, France offers a favorable economic environment to potential exporters. The France Country Commercial Guide (CCG 2019) is a comprehensive annual review of the France's commercial, economic, political and investment environment. It includes information to assist those doing business in France. In addition to this Country Commercial Guide, the Commercial Service office in Paris offers many services and customized solutions designed to assist you in developing your market entry strategy and to facilitate your export experience in France. For a detailed description of these services please visit the Services for U.S. Companies section.

8. Taxation in France All income is subject to social charges as well as income tax. The contribution sociale généralisée (CSG) part of social charges increases by 1.7% this year for all types of income, so the rates for 2018 are: 9.7% for employment income; 9.1% for pension income and 17.2% for investment income. Non-residents usually pay tax on their France-sourced income at a minimum French tax rate of 20% for French-sourced income up to €27,519 and 30% for income above this threshold.Property tax in France for non-residents on the taxable gain of the sale of a French property is 19% for EU citizens and 36.2% for all others. The band levels are a 1% increase on 2018 (2019 income). In 2021, for 2020 income, there will be further changes, in particular, reducing the 14% rate to 11%, which we considered in our article Income Tax 2019/2020.The rates are applied on a fractional basis so that each household 'part’ of the income is charged progressively, as we outlined in the previous section. Thus, if a couple have net income of €30,000 in the year there are two 'parts' of €15,000, with each part taxed using the scale rates.

9. Trade France is the 6th largest export economy in the world and the 14th most complex economy according to the Economic Complexity Index (ECI). In 2017, France exported $516B and imported $595B, resulting in a negative trade balance of $78.6B. In 2017 the GDP of France was $2.58T and its GDP per capita was $42.9k. The top exports of France are Planes, Helicopters, and/or Spacecraft ($48.8B), Packaged Medicaments ($24.6B), Cars ($24.1B), Vehicle Parts ($18.4B) and Wine ($10.7B), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Cars ($35.1B), Crude Petroleum ($20.6B), Refined Petroleum($16.7B), Aircraft Parts ($15.9B) and Petroleum Gas ($15.3B). The top export destinations of France are Germany ($69.1B), Belgium-Luxembourg($39.7B), Italy ($39.7B), Spain ($37.6B) and the United States ($36B). The top import origins are Germany ($103B), China ($52.9B), Italy ($48B), Belgium- Luxembourg ($44.6B) and Spain($40.5B).

10. Banking in France The Bank of France known in French as the Banque de France, headquartered in Paris, is the central bank of France. It is an independent institution, member of the Eurosystem since 1999. The French banking system includes four units: the Bank of France, investment banks, deposit banks, and banks offering medium- and long-term loans. The Bank of France, the country's national monetary authority, performs the following functions: Formulating credit and monetary policies. French banks should improve is their creditworthiness. Moody’s investor service expects that the creditworthiness of these banks will evolve within 12 to 18 months down the line. The banking sector is one of France’s six main economic assets, according to the OECD. As of January 2019, the French banking industry numbered 340 banks. According to the Financial Stability Board, four French banks are among the eight Euro area Global Systemically Important Banks (G-SIBs).

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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