Benefits of Making Business in macedonia | Buy & Sell Business

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

4. Country Overview The Destination Macedonia, mountainous landlocked country on the Balkan Peninsula in south-eastern Europe. It is bordered by Albania, Bulgaria, Greece, Serbia and Kosovo. The country was formerly a Republic within Yugoslavia, it gained independence in 1991. Macedonia covers an area of 25,713 km², compared it is about two-third the size of Switzerland, or slightly larger than the U.S. state of Vermont. Macedonia is situated in a mountainous part of the Balkans, it is bisected from north west to south east by the Vardar River, the major river in the country and its longest. Highest point with 2,764 m is Golem Korab, a mountain situated on the border with Albania, it is the highest peak in both countries.

5. Executive Summary Macedonia, a landlocked country located in Southeastern Europe, is bordered by Greece to the south, Bulgaria to the east, Kosovo and Serbia to the north, and Albania to the west. Macedonia is divided into 80 municipalities, with Skopje as the capital. The official language in the country is Macedonian, and the currency is the Macedonian denar (MKD). According to the data of the State Statistical Office, the number of active business entities in the Republic of North Macedonia in 2018 was 72,315. The Republic of Macedonia has a population of just over 2 million people (2014), largest city and the national capital is Skopje (Скопје). Official language is Macedonian, in writing the language uses an adaptation of the Cyrillic alphabet.

6. Introduction – Doing business in Macedonia Macedonia is ranked 17 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The rank of Macedonia deteriorated to 17 in 2019 from 10 in 2018. Macedonia Is a country with a stable macroeconomic policy, which is due to the overall efforts of the Government for starting a business i.e. one-stop-shop or 4 hours company registration, regulatory guillotine and improving interoperability between government institutions. Also, Macedonia has a competitive location due to the geographical position of the country as the top reformer in the world in terms of starting and running a business..

7. Conducting business in Macedonia • • Partnership • Public joint-stock company. In order to register company in Macedonia, it is necessary to prepare three names for it and submit them for consideration to the relevant state authorities. Verification usually takes not much time. As a result, the founder(s) shall be informed concerning reservation of one name for the company. Company formation in Macedonia is possible in the form of: • Sole proprietorship Limited Liability Company

8. Taxation in Macedonia • indicator is one of the lowest among European countries. • VAT in Macedonia equals to 18%. • Macedonian company pays tax on dividends in the amount of 10%. • Subject to certain conditions, company in Macedonia can obtain even zero (0%) rate on retained income. In general, the tax climate of Macedonia is rather favorable for the development of small and medium-sized businesses, which attracts a large number of investors. Macedonian company is taxed at the rate of 10%. This

9. Trade Macedonia is the 99th largest export economy in the world and the 70th most complex economy according to the Economic Complexity Index (ECI). In 2017, Macedonia exported $6.26B and imported $7.74B, resulting in a negative trade balance of $1.48B. In 2017 the GDP of Macedonia was $11.3B and its GDP per capita was $15.3k. The top exports of Macedonia are Reaction and Catalytic Products ($1.31B), Centrifuges ($602M), Insulated Wire ($461M), Vehicle Parts ($236M) and Buses ($194M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Platinum ($971M), Refined Petroleum ($475M), Laboratory Ceramic Ware ($323M), Cars ($194M) and Hot-Rolled Iron ($182M)..

10. Banking in Macedonia banks, financial companies, savings houses, exchange offices, the Deposit Insurance Fund, insurance companies, etc. The banking system itself is two-tiered, based on the Banking Law and the National Bank Law. NBRNM is the independent money-issuing institution responsible for price stability, stability of the national currency (denar), stability of the financial system, liquidity of payments within the country and abroad, and the conduct of monetary policy and foreign exchange policy. The Supervision Department at NBRNM serves as the main regulatory body responsible for the supervision of all banking institutions and savings houses. The financial system in Macedonia consists of the National Bank of the Republic of North Macedonia (NBRNM), commercial

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

12. Looking to Buy or Sell a Business? CONTACT US NOW FOR A FREE BUSINESS VALUATION WWW.MERGERSCORP.COM

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