Benefits of Making Business in Reunion | Buy & Sell Business

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

4. Country Overview The remote Indian Ocean island of Reunion lies between Madagascar and Mauritius. As a French overseas territory, it has the same political status as other departments in mainland France. Densely-populated and ethnically diverse, the island's capital of Saint-Denis is home to one-fifth of the population. Reunion has traditionally prospered from the cultivation of sugar cane but tourism and financial aid from Paris help underpin the economy. A large wealth gap had fuelled social tensions in more recent times. Unemployment is high, particularly among the young and emigration is common. Reunion has a tropical climate and diverse landscape. It is home to one of the world's most active volcanoes, the Piton de la Fournaise, which is also a World Heritage site.

5. Executive Summary The GDP of Réunion at market exchange rates, not at PPP, was estimated at 19.7 billion euros (US$22.3 bn) and the GDP per capita (also at market exchange rates) was 22,900 euros (US$25,900). Economic growth has been at around +3.0% per year. The economy of Réunion has traditionally been based on agriculture. Sugarcane has been the primary crop for more than a century, and in some years it accounts for 85% of exports. The government has been pushing the development of a tourist industry to relieve high unemployment, which amounts to more than 40% of the labour force. The currency of Reunion Island is euro. There are several plural forms of the name 'euro'. These are euro, euros. The symbol used for this currency is €, and it is abbreviated as EUR. The euro is divided into Cent; there are 100 in one euro.

6. Introduction – Doing business in Reunion Réunion has a predominantly agricultural economy with sugar cane the principal crop and export earner, generating almost 85% of export revenues. The British introduced sugar cane and it has been the primary crop for over a century. Sugar and rum production are the principal industries, a direct offshoot of the high production of sugarcane. Other cash crops include coffee, tea, tobacco and vanilla, vetivier and ylang-ylang used in tropical essences. The industrial sector includes the manufacture of construction materials, metal goods, textiles and electronics. The service sector of transport, telecommunications, finance and tourism is responsible for most of the economic output but unemployment continues to dog the footsteps of the government, which is looking to further develop the tourism sector in order to generate revenue and employment. The local economy stays afloat only with heavy doses of aid from the parent country and from the EU to sustain and promote growth and development.

7. Conducting business in Reunion Selecting the right type of company or corporation for your new business helps maximize your chances of financial and operational success. Common types of business structures and corporations include C corporations, limited liability companies (LLC), partnerships, S corporations, and sole proprietorships. Learn more about each type of business or corporation: Limited Liability Companies • Independent legal structures separate from their owners. • Help separate your personal assets from your business debts. • similarly to a sole proprietorship (if one owner) or a partnership. • limit to the number of owners. • Not required to hold annual meetings or record minutes. • Governed by operating agreements. Corporations • Independent legal and tax structures separate from their owners. • Help separate your personal assets from your business debts. • No limit to the number of shareholders.

8. Taxation in Reunion The corporate tax in Reunion Island is set at 15%. Personal income tax ranges from 0% to 40%, depending on your specific situation and income level. VAT in Reunion Island is 8.5%. To read more click on economy of Reunion Island. CAPITAL GAINS TAX New rules were introduced in 2004. EU residents and residents of France now pay 16% on the net gain, after deduction of acquisition and improvement costs (the default deductions under these two headings are 7.5% and 15% respectively, but if invoices can be produced, more may be allowable). For both residents and nonresidents, discounts of 10% a year are allowed after the fifth year of ownership, with the effect that after 15 years no gain is chargeable to tax. INCOME TAX For enterprises of less than €7,630,000 turnover and with profits of less that €38,120, corporation tax on profits is 15%. Such corporations also do not pay the social contribution on profits. However, with some exceptions, if a company owns real estate in France, it will have to pay a 3% annual tax based on the property's market value.

9. Trade Reunion had a total export of 208,689.94 in thousands of US$ and total imports of 2,711,079.68 in thousands of US$ leading to a negative trade balance of -2,502,389.74 in thousands of US$. The trade growth is 8.36% compared to a world growth of 11.51%. India's economic relation with the island has increased during the past five years. Bilateral trade increased from about €46 million in 2010 to €60.41million in 2014,in which imports from India was over €47million and exports to India was €13million. Major exports from India to Reunion were fish, prawns, cereals, auto parts, metal & steel products, garments & textiles, Basmati rice, vegetables, spices, etc. India's imports from Reunion Island were mainly metal scraps, recycling materials (waste paper, carton), pulp, etc. Till the beginning of 2013, Air Mauritius was the only air link with India via Mauritius. Since February 2013, Air Austral has established direct connection between the capital city Saint Denis and Chennai twice a week. This direct flight is expected to further enhance trade and economic cooperation as well as people-to-people contacts between Reunion and India.

10. Banking in Reunion With the right paperwork and initial outlay, it is possible for a foreign citizen to open a bank account in Reunion Island. This opportunity for international accounts and investments offers several advantages based on economic regulations and tax structures. Interest rates, tax laws, and fees vary depending on the specific country in which you are investing; careful research and strategic financial moves could result in significant portfolio growth. When considering opening a bank account in Reunion Island, one must enlist the help of international experts to guide them through the process. The vast majority of bank accounts in Reunion Island will require an initial financial outlay to secure account opening. This value differs from bank to bank and also depends on variable rates of currency exchange. An international finance expert will help to navigate these conversions as well as the assorted fees and minimums involved in sustaining a bank account. Be sure to understand interest and growth rates associated with any potential international bank account so that you are able to maximize your earnings while minimizing risk.

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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