Benefits of Making Business in Zimbabwe | Buy & Sell Business

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

4. Country Overview Zimbabwe is a landlocked country in southern Africa known for its dramatic landscape and diverse wildlife, much of it within parks, reserves and safari areas. On the Zambezi River, Victoria Falls make a thundering 108m drop into narrow Batoka Gorge, where there’s white-water rafting and bungee-jumping. Downstream are Matusadona and Mana Pools national parks, home to hippos, rhinos and birdlife. The politics of Zimbabwe takes place in a framework of a full presidential republic, whereby the President is the head of state and government as organized by the 2013 Constitution. Executive power is exercised by the government. Legislative power is vested in both the government and parliament. The Zimbabwe African National Liberation Army was ZANU's military wing. For this reason, ZANU made itself amenable to Maoist and other communist ideology. Since the defeat of the constitutional referendum in 2000, politics in Zimbabwe has been marked by a move from the norms of democratic governance, such as democratic elections, the independence of the judiciary, the rule of law, freedom from racial discrimination, the existence of independent media.

5. Executive Summary Zimbabwe is a beautiful African country, rich in resources and hardworking people. Despite political turmoil, it is a rewarding travel destination. National parks such as Hwange and Mana Pools teem with wildlife, making Zimbabwe one of the continent's best places to go on safari. Zimbabwe is a landlocked country in southern Africa with a surface area of 150,872 square miles. In combination with its relatively small size, its also relatively sparsely populated. The next most common belief in Zimbabwe is no belief at all with 10.2% of the population declaring themselves Atheist or agnostic. The remaining 5.7% of the population either practice a traditional African religion or are Muslim. The capital and largest city is Harare. The second largest is Bulawayo. A country of roughly 14 million people, Zimbabwe has 16 official languages, with English, Shona, and Ndebele the most common. Zimbabwe means “great houses of stone,” derived from the Shona language. Victoria Falls, one of the seven wonders of the world is Zimbabwe's famed attraction and lies close to the Zambezi River. Zimbabwe's capital is Harare and it is the largest city, followed by Bulawayo.

6. Introduction – Doing business in Zimbabwe Zimbabwe is ranked 140 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The rank of Zimbabwe improved to 140 in 2019 from 155 in 2018. Zimbabwe has 9 procedures required to START A BUSINESS as opposed to the OECD average of 4.7 procedures and 90 days as opposed to 8.3 days to start a business respectively. Zimbabwe now has the internet infrastructure to modernize government operations. The Office of the President and Cabinet through the Public Sector Modernization Department is currently implementing the Flag Ship projects, which have resulted in marked improvements at the operations in the Passport and Deeds Offices.

7. Conducting business in Zimbabwe FORMS OF COMPANIES Private company (Pvt) - Number of partners: Maximum 50 members Capital (max/min): No minimum requirements or limits on capital Shareholders and liability: Limited liability of shareholders depending on their share Public company (Ltd)Number of partners: Unlimited number of members Capital (max/min): No minimum requirements or limits on capital Sole proprietorship - Number of partners: One individual Shareholders and liability: Unique, unlimited liability Partnership - Number of partners: Generally restricted to 20 members Shareholders and liability: Partners are usually jointly and severally liable for all the debts of a partnership.

8. Taxation in Zimbabwe Normal tax is payable by Zimbabwean companies on their taxable income at the rate of 25%. A 3% AIDs levy is imposed on the tax chargeable giving an effective tax rate of 25.75%. The tax is payable by both public and private companies as well as private business corporations. Personal Income Tax Rate in Zimbabwe is expected to be 50.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. In the long-term, the Zimbabwe Personal Income Tax Rate is projected to trend around 45.00 percent in 2020, according to our econometric models. Zimbabwe individual income tax is imposed at progressive rates up to 35%. The 3% AIDS Levy is also imposed. Basis – Individuals pay tax only on Zimbabwe-source earnings or income deemed to be Zimbabwe source. .

9. Trade Zimbabwe is currently our 169th largest goods trading partner with $109 million in total (two way) goods trade during 2018. Goods exports totaled $34 million; goods imports totaled $75 million. The U.S. goods trade deficit with Zimbabwe was $41 million in 2018. The principal imports are fuels and petroleum products, electricity, machinery and transport equipment, food, and miscellaneous manufactured goods. Zimbabwe's trading partners include South Africa and other African countries, the United States, China, and some countries of the EU. Its top imports are Broadcasting Equipment ($140M), Packaged Medicaments ($121M), Delivery Trucks ($94.5M), Corn ($74.8M) and Refined Petroleum ($74.4M). The top export destinations of Zimbabwe are China ($844M), South Africa ($189M), the United Kingdom ($101M), India ($71.2M) and Zambia ($70.6M). The economy of Zimbabwe is mainly made of tertiary industry which makes up to 60% of the total GDP as of 2017 . Zimbabwe has the second biggest informal economy as a share of its economy which has a score of 60.6%. Agriculture and mining largely contribute to exports.

10. Banking in Zimbabwe Zimbabwe has a well-developed banking sector which is modeled on the British system. The Reserve Bank of Zimbabwe (RBZ) is the central bank which, after years of dollarization, is once again responsible for monetary policy since the introduction the local currency, RTGS dollars, in February 2019. The rest of the banking system is composed of: commercial banks, which are the largest subsector; merchant banks, whose function is to finance trade, underwrite rights offerings of listed companies, and assist in mergers and acquisitions; building societies, which provide mortgages for real estate transactions; the People’s Own Savings Bank and development financial institutions. CBZ Bank has been voted as Zimbabwe's best-performing bank in 2018 by US-based Global Finance Magazine. CBZ Bank, which has an asset base of US$ 2billion and deposits worth $1,8 billion, is considered the country's largest bank.

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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