Benefits of Making Business in Syria | Buy & Sell Business

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

4. Country Overview Syria is a country in the Middle East, with a coastline at the eastern Mediterranean Sea. It is bordered by Iraq, Israel, Jordan, Lebanon, and Turkey, and it shares maritime borders with Cyprus. The country occupies an area of 185,180 km², it is about twice the size of Portugal or slightly larger than U.S. state of North Dakota. Syria has a population of 24 million people, capital city is Damascus, spoken languages are Arabic (official), English and French, Kurdish, Armenian, Aramaic. The country is home to a variety of ethnic and religious groups, including Kurds, Armenians, Assyrians, Christians, Druze. Syria is a country with a predominantly Muslim population, 12% of Syrians are Alawite Shia and 74% Arab Sunni. The Assad family who maintained power in the country for more than 45 years are Alawite, Hafez al-Assad strengthened loyalty to his regime by appointing many Alawites to senior positions, particularly in the numerous security services.

5. Executive Summary Once the centre of the Islamic Caliphate, Syria covers an area that has seen invasions and occupations over the ages, from Romans and Mongols to Crusaders and Turks. A country of fertile plains, high mountains and deserts. Modern Syria gained its independence from France in 1946, but has lived through periods of political instability driven by the conflicting interests of these various groups. Since 2011 political power, long held by a small mainly Alawite elite, has been contested in a bitter civil conflict initially sparked by the Arab Spring that turned into a complex war involving regional and international powers. Syria 2019 population is estimated at 17,070,135 people at mid year according to UN data. Syria population is equivalent to 0.22% of the total world population. Syria ranks number 69 in the list of countries (and dependencies) by population.

6. Introduction – Doing business in Syria Syria has had several business start-up reforms over the past decade, and still ranked relatively low in the 2010 Doing Business report, moving down from 133rd to 134th in the ease of starting a business. Business start-up required 7 procedures, took 17 days, and cost nearly 28% of GNI per capita to start a business in 2009, and had the highest minimum paid-in capital in the world at 1,013% of income per capita. This was nine times the regional average. Syria further reduced the capital requirement to 355.1% of income per capita in 2010.

7. Conducting business in Syria agreement is signed by all partners, an application is submitted to the Ministry of Supply and Interior Trade and provided that the foreign entity is not a bank, insurance company, law or accounting firm. In a general partnership all partners are jointly liable to the full extent of their personal fortunes. A minimum of two partners is necessary to found a general partnership. At least one of the general partners' names must be included in the title of the company along with a description signifying it is a partnership. A limited partnership includes limited partners, who are liable only to the extent of their capital investment, in addition to a general partner or partners, who have unlimited liability. A foreign company or individual can be a partner in either type of partnership. Companies wishing to establish a branch in Syria are required to submit a request to the Foreign Companies Department of the Ministry of Economy and Foreign Trade. Foreign individuals or corporate bodies are permitted to enter into a general or limited partnership provided a written

8. Taxation in Syria income received by a non-resident, unless reduced by an applicable tax treaty. Real property gains are taxed at rates ranging from 17 percent to 60 percent. The Corporate Tax Rate in Syria stands at 28 percent. Syria Corporate Tax Rate - data, historical chart, and calendar of releases - was last updated on February of 2020 from its official source. In Syria, the Corporate Income tax rate is a tax collected from companies. Its amount is based on the net income companies obtain while exercising their business activity, normally during one business year. The benchmark we use refers to the highest rate for Corporate Income. Revenues from the Corporate Tax Rate are an important source of income for the government of Syria. For Syrian residents, income from movable capital interest, royalties, and foreign sources of dividends are taxed at a flat rate of 7.5%; for nonresidents, the rate is 15% unless reduced by an applicable tax treaty. The tax is levied at a flat rate of 7.5 percent on such income received by a Syrian resident and at a rate of 15 percent on such

9. Trade 88th most complex economy according to the Economic Complexity Index (ECI). In 2017, Syria exported $622M and imported $4.4B, resulting in a negative trade balance of $3.78B. The top exports of Syria are Spice Seeds ($92.2M), Pure Olive Oil ($56.6M), Apples and Pears ($44.2M), Other Nuts ($39M) and Non-Retail Pure Cotton Yarn($25.8M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Raw Sugar ($172M), Seed Oils ($120M), Cars ($97.4M), Rolled Tobacco ($89.6M) and Wheat Flours($80.4M). The top export destinations of Syria are Lebanon ($131M), Egypt ($108M), Turkey ($70.1M), Jordan($66.3M) and Spain ($53.7M). The top import origins are Turkey ($1.15B), China ($1.09B), Lebanon ($246M), Egypt ($217M) and South Korea ($215M). Syria borders Iraq, Israel, Jordan, Lebanon and Turkey by land and Cyprus by sea. Syria is the 157th largest export economy in the world and the

10. Banking in Syria There are no branches of foreign banks in Syria and no 100% owned private Syrian bank, although above laws allow both. The Commercial Bank of Syria accounts for the highest assets share in the banking sector, amounting to 37% of all bank assets at the end of 2017. The Central Bank of Syria is the central bank of Syria. The bank is located in Damascus with 11 branches in provincial capitals. It was established in 1953 and started its operations in 1956.

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