Benefits of Making Business in Uganda | Buy & Sell Business

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

4. Country Overview Uganda is a landlocked country in East Africa whose diverse landscape encompasses the snow-capped Rwenzori Mountains and immense Lake Victoria. Its abundant wildlife includes chimpanzees as well as rare birds. Remote Bwindi Impenetrable National Park is a renowned mountain gorilla sanctuary. Murchison Falls National Park in the northwest is known for its 43m-tall waterfall and wildlife such as hippos. Until 1967 Uganda was a quasi-federal polity that included five subregional monarchies, non-monarchical districts, and a central government. The republican constitution adopted in 1967 abolished the monarchies and assigned ultimate political power to an elected president. The president was to be aided by a ministerial cabinet drawn, in the British tradition, from among members of the unicameral National Assembly. There are a wide range of ethnic groups in Uganda with many different languages spoken, namely Luganda (most common), English (only a small portion speak it), Bantu, Swahili, Nilotic and Lumasaba. Christians make up 85.2% of Uganda's population, there are a certain amount of Sikhs and Hindus, and 12% are Muslims.

5. Executive Summary Kampala, capital and largest city of Uganda. It occupies a series of hills at an elevation of about 3,900 feet (1,190 metres) and is situated in the southern part of the country, just north of Lake Victoria. Kampala lies just north of Mengo, the capital of the kingdom of Buganda in the 19th century. According to 2019 estimates, the population of Uganda is around 44.27 million, up significantly from 2013's estimate of 33,640,833. The Pew Research Center in 2014, however, estimated that 11.5 percent of Ugandans were Muslim, compared to 35.2 percent of Tanzanians, 9.7 percent of Kenyans, 6.2 percent of South Sudanese, 2.8 percent of Burundians, and 1.8 percent of Rwandans. Uganda is a popular country in East Africa widely known for its agricultural products such as cotton, tobacco, and tea. The landlocked nation encompasses several spectacular mountains, lakes, as well as savannas

6. Introduction – Doing business in Uganda With a young and rapidly growing population, extremely productive agricultural lands, a nascent oil sector, and a strategic location in the heart of East and Central Africa, Uganda offers great economic potential. Starting your business without any registration is prudent when you want to save on your start up resources. But ,my advice is that you should formalize your business upfront, if you hope to reap the benefits of business growth. Your business will need formal existence in the following circumstances. - When accessing credit from a financial Institution - When acquiring raw materials from a serious supplier, and - When doing business with the Government of Uganda.

7. Conducting business in Uganda Listed below are types of businesses that local entrepreneurs can register in Uganda: -Private Limited Liability Companies: These are limited by either shares or guarantee. It includes a single member company and consists of 1-100 members. -Public Companies: They are open to public subscription and can have a membership from 7 to infinity. Below is a detailed summary of the first official steps that entrepreneurs wishing to incorporate and register new firms in Uganda have to go through.

8. Taxation in Uganda ​​​​​​​​​​​​​​Personal Income Tax Rate in Uganda is expected to be 40.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. In the long-term, the Uganda Personal Income Tax Rate is projected to trend around 40.00 percent in 2020, according to our econometric models. Part time payments or allowances are assessed at a standard withholding rate of 30 per cent on gross emoluments as they are deemed to be earnings from another source which could have already applied the required threshold as provided for under Income Tax (withholding tax) regulations 2000 paragraph (3)15. The income tax rate for individuals depends on the income bracket in which the individual falls. Resident individuals enjoy a tax free annual income threshold of UGX. 2,820,000 per annum. The balance is taxed at 10%, 20% or 30% depending on the income bracket.

9. Trade Complexity Index (ECI). In 2017, Uganda exported $2.79B and imported $5.84B, resulting in a negative trade balance of $3.05B. In 2017 the GDP of Uganda was $26B and its GDP per capita was $1.86k. The top exports of Uganda are Coffee ($555M), Gold ($416M), Dried Legumes ($98.4M), Fish Fillets ($87.1M) and Cocoa Beans ($74.9M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Refined Petroleum ($934M), Palm Oil ($255M), Packaged Medicaments ($236M), Broadcasting Equipment($213M) and Cars ($141M). The top export destinations of Uganda are the United Arab Emirates ($427M), Kenya ($391M), South Sudan ($253M), the Democratic Republic of the Congo ($189M) and Rwanda ($171M). The top import origins are China ($1.15B), India ($724M), the United Arab Emirates ($623M), Kenya ($506M) and Japan ($376M). Uganda is the 122nd largest export economy in the world and the 77th most complex economy according to the Economic

10. Banking in Uganda institutions. Most of Uganda's largest commercial banks are foreign-owned. The BOU manages a deposit protection fund. Many more Ugandans use mobile money transactions than have formal bank accounts. Centenary Bank Centenary Rural Development Bank Ltd is a financial services provider in Uganda that is engaged in commercial banking. The bank offers loans, savings, investments, checking and debit cards to more than 1.4 million customers through a network of 69 branches and 172 ATMs. It also plays a role in microfinance, helping rural farmers, small traders, importers, exporters, and manufacturers. Centenary Banks was founded in 1983 and was registered as a full-service commercial bank in 1993. Its headquarters is in Kampala. DFCU Bank Development Finance Company of Uganda Bank Limited, or DFCU Bank, is the second largest of the commercial banks in Uganda. DFCU offers several banking products and services, including loans, savings, checking, debit and credit cards, investments, and mortgages. Uganda's banking sector includes 25 commercial banks, one development bank, and several micro-deposit and credit deposit

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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