Benefits of Making Business in Guernsey | Buy & Sell Business

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

4. Country Overview The Channel Islands, located in the English Channel, are the last remnants of the medieval Dukedom of Normandy. Guernsey, which encompasses the 10 parishes on the Island of Guernsey as well as the islands of Herm, Jethou, Burhou, and Lihou, is a British Crown dependency. Alderney is the closest of the Channel Islands to France, as well as being the closest to England, and is part of the Bailiwick of Guernsey. The only parish of Alderney is the parish of St. Anne, which covers the whole island. The capitals of Guernsey is St. Peter Port. The official languages of Guernsey are English and French. The currency in Guernsey is the British pound sterling (GBP).

5. Executive Summary Financial services, including banking, fund management, and insurance, have a major influence on employment and the economy in Guernsey. There has been economic growth in the financial services, construction, retail, and public sectors. The total population is about 160,000, of whom the overwhelming majority is made up of native islanders of Norman French and British extraction. There are also groups of European Union citizens, with a prominent community from Portugal. The economy of the islands is dominated by financial services, tourism, electronic commerce and agriculture. The relatively light tax burden has encouraged a booming offshore finance sector.

6. Introduction – Doing business in Guernsey Guernsey is an entrepreneurial island. Business startups and incorporations are on the rise. Guernsey has a vibrant community of support services for the new business set up Whether your business is moving to Guernsey or you are establishing a new venture within the island there are many benefits of using support services to assist you. It is critical when incorporating a company to seek advice. Guernsey provides a supportive environment in which businesses can flourish, starting by making sure that establishing a business or subsidiary in Guernsey is a smooth and efficient process.

7. Conducting business in Guernsey When considering which type of legal entity is most suited to your proposed new business, the Registry always recommends that you seek independent legal advice. The Guernsey Registry offers a choice of Limited Companies, Limited Partnerships, Limited Liability Partnership or Foundations. When establishing the business there are a number of legal and regulatory things which you need to be aware of and comply with. The Guernsey Companies Law, 2008, as amended has to be adhered to both Guernsey Tax Office and Guernsey Social Security that you have become self employed.

8. Taxation in Guernsey In Guernsey there is no general capital gains tax, inheritance tax or estate duty, purchase or sales tax, VAT or capital transfer tax. The main taxes are income tax at one rate of 20%; social security contributions are also payable. Property owners and occupiers may be liable for small parish taxes.. Non-residents, which is anyone other than residents, or those who are resident but not solely or principally resident, pay tax only on Guernsey-sourced income, with exemptions for local dividend, interest or royalty income as in the previous paragraph.

9. Trade The main imports of Guernsey are coal, gas, oil, electricity, machinery and equipment. The main trading partners of Guernsey are the European Union and the United Kingdom. Since 2013, its trade integration in the EU has accelerated; Guernsey also negotiates bilateral agreements with other EU member states. It is one of the leading providers of financial services and, to a lesser extent, an exporter of manufactured goods. These are mainly optical and horticultural products such as tomatoes, flowers and ferns, peppers, eggplants and other vegetables.

10. Banking in Guernsey Guernsey’s banking system is comprised of Private Banking and Corporate Banking sectors. Corporate banking provides a full suite of banking services to trading companies, holding and investment companies, investment funds, trusts, and captive insurance companies. Private Banking, on the other hand, offers services to high net worth individuals (HNWIs) from the UK and other countries. As of 2016, banks in Guernsey owned assets amounting to US$109 billion, which include loans and advances, securities, investments, plus intra-group exposures. The bank’s total liabilities were estimated at US$154 billion.

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