Benefits of Making Business in Tunisia | Buy & Sell Business

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

4. Country Overview Tunisia is a North African country bordering the Mediterranean Sea and Sahara Desert. In the capital, Tunis, the Bardo Museum has archaeological exhibits from Roman mosaics to Islamic art. Tunisia, officially the Tunisian Republic, is the northernmost country in Africa. It is a Maghreb country and is bordered by Algeria to the west, Libya to the southeast, and the Mediterranean Sea to the north and east. Its area is almost 165,000 square kilometres, with an estimated population of just over 11.5 million. Modern Standard Arabic is the official language, but Tunisian Arabic is the local vernacular and is considered Tunisia's native language. The currency is the Tunisian dinar (TND). In 1869, Tunisia declared itself bankrupt, and an international financial commission took control over its economy. In 1881, the French invaded with an army and forced the Bey to agree to the terms of the 1881 Treaty of Bardo (Al Qasr as Sa'id). With this treaty, Tunisia was officially made a French protectorate. For nearly the entire period between Tunisia’s achievement of independence in 1956 and the Jasmine Revolution, a popular uprising that unseated Pres. Zine al- Abidine Ben Ali in 2011, the Tunisian political system featured a powerful presidential regime backed by a single political party.

5. Executive Summary Tunis is the capital and the largest city of Tunisia. Situated on a large Mediterranean Sea gulf (the Gulf of Tunis), behind the Lake of Tunis and the port of La Goulette (Ḥalq il-Wād), the city extends along the coastal plain and the hills that surround it. Tunisia covers an area of 163,610 km², making it about two- thirds the size of the United Kingdom, or slightly larger than the US state of Georgia. Tunisia has a population of 11.3 million people, capital and largest city is Tunis. Spoken languages are Arabic and French, English and other languages in tourist regions. Couscous, called "Kosksi", is the national dish of Tunisia, and can be prepared in many ways. It is cooked in a special kind of double boiler called a kiska:s in Arabic or couscoussière in French. Tunisia is on the Mediterranean coast of North Africa, midway between the Atlantic Ocean and the Nile Delta. It is bordered by Algeria on the west and Libya on the south east. Tunisia is located between Algeria and Libya and has a varied topography. In the north, Tunisia is mountainous, while the central part of the country features a dry plain. The southern part of Tunisia is semiarid and becomes arid desert closer to the Sahara Desert.

6. Introduction – Doing business in Tunisia Public Limited Company “SA” Public Limited Company “” requires at least 7 shareholders who can be either natural persons or legal entities. The maximum lifetime of such a company is 99 years. One quarter of the subscribed shares in cash should be paid-up at the time of company’ incorporation. Payment of the balance should be made in one or more installments within a period of five years from the date of the company’ registration. The shares of a Public Limited Company is required to appoint an auditor for three years with the mandate of checking the accounts of the company and presenting audit reports to the general meeting of the shareholders. Branch The incorporation of a branch is relatively simple. The time limit and registration procedures are identical to those relating to Limited Liability Company. The directors of a branch act on behalf of the parent company and should therefore have a delegation of power. Ecovis Tunisia helps its clients for Branch establishment and management in Tunisia and Libya.

7. Conducting business in Tunisia The World Bank ranks Tunisia at 74 out of 189 economies around the world in terms of ease of doing business. A company can be established in as little as 10 days with 11 procedures required. Minimum paid up capital required is low at $US500. A resident director is required for certain company set-ups but international incorporation services companies such as Healy Consultants Group PLC can provide nominee services. Workforce The workforce is plentiful and young. Literacy is estimated to be around 80% and as high as 100% in the age range 18-25. Employment is reported to be as high as 40% amongst the younger generation so there is a large workforce available with a low minimum wage requirement of only about 147.2 euros per month. Security Situation: The security situation is not ideal and the terrorist group ISIS have caused much havoc here in recent years. The government are working to stabilise the situation though and I just read recently how they have dispatched hundreds of police to the beaches and resorts to patrol and secure the tourist areas.

8. Taxation in Tunisia Interests and investment income from Tunisian source received by a non-Tunisian resident are subject to 20 percent tax rate, unless, the domestic tax legislations provides an exemption or when tax treaties provide favorable tax rate. Resident companies are taxed on all their income (national and international) while non-resident companies are only taxed on income earned in Tunisia. Capital gains are included in ordinary income and are taxed at the regular corporate income tax rate. For non-resident and non- established companies in Tunisia, capital gains derived from the sale of shares is subject to withholding tax at a rate of 25%, which is levied on the difference between the sales price and the acquisition price, reduced by the expenses incurred on the sale including the share premium.

9. Trade main exporting industry (12.9% of all exports), followed by textile, petroleum by-products, electrical apparatus, olive oil, travel and transportation. Tunisia is the 72nd largest export economy in the world and the 69th most complex economy according to the Economic Complexity Index (ECI). In 2017, Tunisia exported $16.1B and imported $20.8B, resulting in a negative trade balance of $4.7B. In 2017 the GDP of Tunisia was $40B and its GDP per capita was $11.9k. The top exports of Tunisia are Insulated Wire ($2.08B), Non-Knit Men's Suits ($866M), Non-Knit Women's Suits ($543M), Crude Petroleum ($490M) and Vehicle Parts ($457M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Refined Petroleum ($1.53B), Petroleum Gas ($882M), Cars ($681M), Low-voltage Protection Equipment ($488M) and Insulated Wire ($482M). Tunisia's foreign trade represents 111% of its GDP (World Bank, 2018). Wire and cable manufacturing continues to be Tunisia's

10. Banking in Tunisia Tunisian Banking Co. (Société Tunisienne de Banque-STB) was established in 1957; it is the leading commercial and investment bank; the state holds 52% of the STB's capital. The banking system is a mixture of state-owned and private institutions which offer a variety of financial instruments and services. There are 13 commercial banks; eight development banks; eight leasing companies; eight offshore banks; a savings bank; five portfolio management institutions; two merchant banks. Commercial banks include Citibank, Amen Bank, Banque International Arabe de Tunisie (BIAT), Banque Nationale Agricole (BNA); and one merchant bank is International Maghreb. The Central Bank of Tunisia (Banque Centrale de Tunisie-BCT), established in September 1958, is the sole bank of issue. The

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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