Benefits of Making Business in Laos | Buy & Sell Business

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

4. Country Overview Laos is the only landlocked country in Southeast Asia. Nearly three-quarters of Laos is covered in mountains and forested hills that are too steep to live on. Travel over the land is hard. The Mekong River is vital as a transportation route for cargo and passengers, a source of electricity at dams, a water supply for crops, and a home to fish which are an important food in the diet of Laotian people. There are three plateaus between the mountains and the Mekong River—the Xiangkhiang, the Khammouan, and the Bolovens Plateaus. Laos is one of the poorest countries on Earth. Although the Lao have few possessions beyond their food, their Buddhist beliefs help them to find happiness through a simple life. Most of the people live in small rural communities near the river.

5. Executive Summary The Lao People’s Democratic Republic (Lao PDR) is a land- locked country located in the Greater Mekong Region, with a population of 6.8 million, including 2.8 million under the age of 18.1 and an average income per capita of USD 1730.40 (2017) According to the United Nations Population Fund, Laos is one of the 48 Least Developed Countries in the world.2 However, the country is currently showing a 7.4% growth in GDP.3 Economic development, increased mobility of youth, and globalisation can create prime conditions for the sexual exploitation of children. Major languages spoken are Lao, French and major religion is Buddhism and the Currency is kip The Lao PDR has a weak national justice system which fails to provide justice for large sections of the population, especially ethnic minorities.

6. Introduction – Doing business in The Laos Laos ranking 141 out of 190 economies on the World Bank’s 2018 Doing Business Report, the country scores lower than most other countries in the region. Factors affecting business climate include corruption and red tape, opaque custom procedures and tax regulations, a lack of skilled manpower, poorly developed infrastructure and a weak judicial system and the absence of a proper framework to govern public-private-partnership projects. Another factor making it more challenging to access the Lao market is the relative dominance of several Asian investors, most notably from China and Vietnam.

7. Conducting business in The Laos •private enterprises, •state owned enterprises, •collective enterprises and joint enterprises Before commencing operations, all enterprises (domestic, foreign, state, private, joint venture, etc.) must be registered, in conformity with the Lao law on business operations, with the Ministry of Commerce’s Trade Registration Department: at provincial level, with the trade registration service: and at district level for small size investments. There are four types of enterprises in the Lao People's Democratic Republic:

8. Taxation in The Laos Tax Law (2005, amended in 2016). The main taxes levied by the Lao authorities are the Corporate Income Tax, the Personal Income Tax and the Value Added Tax. All companies registered in Laos and foreign companies operating in Laos are taxed at a standard flat Corporate Tax Rate of 24%, if they are registered under the Value Added Tax (VAT) system and regardless of any residency status which is not in use for tax purposes. Small and medium companies with an annual revenue inferior to LAK 12 million are not registered in the VAT system. The Tax Department of the Ministry of Finance is the main tax administrator in Laos. The principal taxation law of Laos is the

9. Trade Laos is the 131st largest export economy in the world and the 115th most complex economy according to the Economic Complexity Index (ECI). In 2017, Laos exported $2.04B and imported $1.94B, resulting in a positive trade balance of $101M. In 2017 the GDP of Laos was $16.9B and its GDP per capita was $7.02k. The top exports of Laos are Copper Ore ($557M), Rubber ($193M), Gold ($155M), Rough Wood ($137M) and Non-Knit Men's Suits ($86.4M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Broadcasting Equipment ($134M), Delivery Trucks ($94.6M), Iron Structures ($90.2M), Other Steel Bars ($87.8M) and Hydraulic Turbines ($85.6M).

10. Banking in The Laos The central bank, the Bank of the Laotian People's Democratic Republic, regulates a rapidly expanding sector comprising 13 national and foreign-owned banks under the terms of the Commercial Bank and Financial Institutions Act of January 1992. Most of the wholly foreign-owned banks are Thai (such as the Thai Military Bank and Siam Commercial) and many of the joint- venture banks are backed by Thai financiers (such as the Joint Development Bank). The central bank continues to receive technical assistance from multilateral lending agencies, and is gradually strengthening the prudential framework. The banks are now believed to be more efficient. The largest commercial bank, established in 1953, is the Bank of Indochina.

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