Benefits of Making Business in malawi | Buy & Sell Business

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

4. Country Overview Malawi, a landlocked country in southeastern Africa, is defined by its topography of highlands split by the Great Rift Valley and enormous Lake Malawi. The lake’s southern end falls within Lake Malawi National Park – sheltering diverse wildlife from colorful fish to baboons – and its clear waters are popular for diving and boating. Peninsular Cape Maclear is known for its beach resorts.. Malawi is one of the world's most densely populated nations with a population of 15.8 million people (in 2014). Capital city is Lilongwe. Spoken languages are English and Nyanja (both official).

5. Executive Summary The country covers an area of 118,484 km², making it slightly larger than Bulgaria or slightly smaller than Pennsylvania. The nation is divided in three main regions: Northern, Central and Southern. There are also three different geographical regions, the Rift Valley, the Central African Plateau, and the Highlands. Largest river in Malawi is the Shire river, the only outlet of Lake Malawi. Highest mountain is Mount Mulanje at 3,002 m (9,849 ft) . Malawi is a presidential representative democratic republic with a multi-party system since 1995. Head of state and head of government is the President, he appoints the cabinet, and is in charge of executory tasks. Malawi's unicameral parliament is elected by plurality vote every 5 years. The Supreme Court of Appeal is the highest court in the country.

6. Introduction – Doing business in Malawi Malawi is ranked 109 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The rank of Malawi improved to 109 in 2019 from 111 in 2018. The economy of Malawi is based on the agricultural sector, which is the driving factor of the Malawian economic growth. Malawi has several investment opportunities in areas such as mining, tourism, manufacturing, agro-processing including fruit juice processing, soya bean oil extraction, integrated cotton industry (spinning, weaving, ginning including cassava); phosphate fertilizer manufacturing; garment manufacturing, etc.

7. Conducting business in Malawi requirements, tax structure etc. There are two common business entities for foreign investors: • locally incorporated company or • foreign-owned company. Foreign investors can setup a sole proprietorship or partnerships in Malaysia with the condition that they have permanent residency (“PR”) in Malaysia. Apart from the options above, foreign investors can also choose to register their business as either the private limited company, or a Labuan company, or a representative office. There are several different types of business entities available in Malaysia. Every business entity has its own compliance

8. Taxation in Malawi The Malawi Revenue Authority (MRA) is an agency of the Government of Malawi responsible for assessment, collection and accounting of tax revenues. The Corporate Tax Rate in Malawi stands at 30 percent. The Personal Income Tax Rate in Malawi stands at 30 percent. Non-resident tax is payable on income sourced from Malawi at the rate of 15% of the gross income and 10% for income derived from a mining project by way of interest, royalty, payment for independent personal services, or dividend.

9. Trade Malawi is the 151st largest export economy in the world and the 91st most complex economy according to the Economic Complexity Index (ECI). In 2017, Malawi exported $869M and imported $1.44B, resulting in a negative trade balance of $572M. In 2017 the GDP of Malawi was $6.3B and its GDP per capita was $1.2k. The top exports of Malawi are Raw Tobacco ($619M), Tea ($90.8M), Raw Sugar ($35.3M), Other Nuts ($19.6M) and Dried Legumes ($18.1M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Packaged Medicaments ($117M), Soap ($61M), Human or Animal Blood and Vaccines ($50.5M), Broadcasting Equipment ($39M) and Wheat ($35.5M).

10. Banking in Malawi The Malawi has a generally sound banking sector, overseen and regulated by the Reserve Bank of Malawi -- the central bank. There are ten full-service commercial banks. The two largest banks -- National Bank of Malawi and Standard Bank -- collectively command 51% of all banking deposits. In December 2017, Malawi’s banks’ total aggregate assets reached MWK 1.572 Trillion ($2.15 billion). Malawi neither has nor requires depositor insurance, but the RBM enforces safeguards and capital requirements. The RBM has guidelines on capital adequacy, liquidity ratio, etc., and adopted Basel II standards in January 2014. International accounting standards adopted by the Institute of Chartered Accountants in Malawi (ICAM) apply to banks.

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