Benefits of Making Business in Senegal | Buy & Sell Business

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

4. Country Overview Senegal, country in western Africa. Located at the westernmost point of the continent and served by multiple air and maritime travel routes, Senegal is known as the ―Gateway to Africa.‖ The country lies at an ecological boundary where semiarid grassland, oceanfront, and tropical rainforest converge; this diverse environment has endowed Senegal with a wide variety of plant and animal life. It is from this rich natural heritage that the country’s national symbols were chosen: the baobab tree and the lion. The most important city in Senegal is its capital, Dakar. This lively and attractive metropolis, located on Cape Verde Peninsula along the Atlantic shore, is a popular tourist destination. Although the government announced plans to eventually move the capital inland, Dakar will remain one of Africa’s most important harbours and an economic and cultural centre for West Africa as a whole.

5. Executive Summary Senegal is bounded to the north and northeast by the Sénégal River, which separates it from Mauritania; to the east by Mali; to the south by Guinea and Guinea-Bissau; and to the west by the Atlantic Ocean. The Cape Verde (Cap Vert) Peninsula is the westernmost point of the African continent. The Gambia consists of a narrow strip of territory that extends from the coast eastward into Senegal along the Gambia River and isolates the southern Senegalese area of Casamance. The Wolof comprise about two-fifths of the total population, and their language is the most widely used in the republic. Under the traditional Wolof social structure, similar to those of other groups in the region, people were divided into the categories of freeborn (including nobles, clerics, and peasants), caste (including artisans, griots, and blacksmiths), and slaves. Some 39 languages are spoken in Senegal, including French (the official language) and Arabic. Linguists divide the African languages spoken there into two families: Atlantic and Mande. The Atlantic family, generally found in the western half of the country, contains the languages most widely spoken in Senegal—Wolof, Serer, Fula, and Diola.

6. Introduction – Doing business in Senegal Senegal offers a competitive destination for investments in Africa, thanks to its political stability, strategic geographical position, access to the sub-regional market and improving infrastructure. Many international organisations, businesses and NGOs have made Dakar, its capital, their base for operations across the West African region. Senegal is ranked 123 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The rank of Senegal improved to 123 in 2019 from 141 in 2018. There are several ways of doing business in Senegal, the most common being the setup of a Senegal limited liability company (also known as a SARL in Senegal). Foreign entrepreneurs may also opt to set up a public limited company, a branch office or a representative office.

7. Conducting business in Senegal Senegal is considered one of the safest countries in Africa. Senegal has a mixed economic system in which the presence of the state in the economy is considerable, but there is limited private sector freedom. Senegal is a member of the Economic Community of West African States (ECOWAS). If you wish to set up a business in Senegal, it is best to be aware of related conditions and formalities. In most cases, local authorities are quite welcoming towards foreign investment. In fact, over the years, many investors have successfully set up a business in Senegal so as to get the most of its resources. There are nine types of companies in Senegal, namely the Individual Company, the Limited Liability Company, the Uni- personal Liability Company, the Anonymous Company, the Economic Interest Grouping, the Limited Partnership Company, the General Partnership Company, the Joint Venture and the De Facto Company.

8. Taxation in Senegal In Senegal, taxable income is defined as income from all sources (wages and salaries, proceeds from agricultural, commercial or non commercial activities, income from real property, etc.). Each category of income is subject to a specific proportional duty taking into account different abatements and deductible charges and a progressive rate ranging from 0% to 50% based on the individual's family situation. The progressive duty ranges from 0% to 40% and is applied per bracket of income, taking into account a dependents' allowance. The total income tax liability obtained by adding the proportional and progressive duties cannot exceed 40% of taxable income. Capital acquisitions tax – A 15% tax is levied on the value of real estate at the time of acquisition, and 1% on the value of securities and shares and other liquid assets. Inheritance/estate tax– A 1% registration fee is imposed for deeds of pure and simple acceptance of succession or legacy. Inheritance tax is imposed at a 3% or 10% rate, depending on the degree of relationship.

9. Trade Senegal is the 114th largest export economy in the world and the 79th most complex economy according to the Economic Complexity Index (ECI). In 2017, Senegal exported $3.59B and imported $7.89B, resulting in a negative trade balance of $4.3B. In 2017 the GDP of Senegal was $21.1B and its GDP per capita was $3.45k. The top exports of Senegal are Refined Petroleum($472M), Phosphoric Acid ($368M), Gold ($365M), Non-fillet Frozen Fish ($290M) and Cement ($214M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Refined Petroleum($888M), Crude Petroleum ($475M), Rice ($442M), Packaged Medicaments ($205M) and Cars ($198M). The top export destinations of Senegal are Mali ($780M), India ($414M), Switzerland ($295M), China($158M) and Spain ($154M). The top import origins are China ($974M), France ($961M), India ($604M), Nigeria($491M) and the Netherlands ($431M).

10. Banking in Senegal Senegal’s banking system consists of a set of banks and other financial institutions interacting with the Central Bank of West African States (BCEAO) which is the banking authority. Local and international banks represented in Senegal can be categorised as follows: •Universal banks •Regional banks •Corporate banks •Specialised banks Bank and Non-Bank Financial Sector As of December 2006, there were 93 banks and 22 financial institutions operating in the UEMOA zone, with 17 banks and three financial institutions located in Senegal. Although relatively few Senegalese use banking services, the country has around 20 operating banks. The West African Economic and Monetary Union (Union Économique et Monétaire Ouest-Africaine, UEMOA) includes, along with Senegal, Guinea-Bissau, Mali, Benin, Togo, Côte d’Ivoire, Burkina Faso and Niger. All use a common currency, the ―Communauté Financière Africaine‖, (―CFA‖) franc. Member states retain their own finance ministries, but work together to create regional policy.

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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