Benefits of Making Business in Bahrain | Buy & Sell Business

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

4. Country Overview The Kingdom of Bahrain is a Middle East Island country situated in the Persian Gulf between Saudi Arabia and Qatar, with Iran lying 124 nautical miles to the north. Following over a hundred years as a British Protectorate country, Bahrain officially claimed independence in 1971. Bahrain, officially the Kingdom of Bahrain, is a sovereign state in the Persian Gulf. The island nation comprises a small archipelago centered around Bahrain Island, situated between the Qatar peninsula and the north eastern coast of Saudi Arabia, to which it is connected by the 25-kilometre King Fahd Causeway.

5. Executive Summary The Kingdom of Bahrain is an archipelago of 33 islands covering a total area of 741 square kilometers in the Arabian Gulf, located east of the Kingdom of Saudi Arabia and northwest of Qatar. The capital of Bahrain is Manama, and the population of Bahrain is approximately 1.41 million. The official language of Bahrain is Arabic, and the currency is the Bahraini dinar (BHD). Bahrain was one of the first countries in the Middle East to discover crude oil. Though oil revenues continue to provide a sizeable proportion of Bahrain’s gross domestic product (GDP), the country is expanding in the financial services, real estate and construction, and manufacturing sectors. Bahrain’s GDP grew by 2.5% in 2017 despite a stagnation of the oil sector.

6. Introduction – Doing business in Bahrain Bahrain maintains its position in the GCC due to its liberal business environment, easy access to the rest of the Middle East and supportive visa policies. The recently issued amendment to the Commercial Companies Law (“New Law”) introduced further business friendly reform to Bahrain's corporate environment. The commercial laws and legal system are under constant review to ensure that they are consistent with international standards. The Kingdom of Bahrain permits 100% foreign ownership of businesses. Companies operating in Bahrain are expected to follow the international accounting standards and are encouraged to pursue good corporate governance.

7. Conducting business in Bahrain The Commercial Companies Law provides for the incorporation of companies with 100% foreign capital. However, certain business activities are reserved for Bahraini nationals and companies. Bahrain enjoys remarkably favorable economic conditions. As the years rolled by, Bahrain made every exceptional effort in resuscitating the economy to bring it where it stands today. Bahrain has also adopted a new policy which welcomes and nurtures foreign investment by allowing 100% foreign ownership. With excellent scope for economic development, skilled labor and workforce, competitive costs, thriving industries and of course, the ease of doing business here, has led to a great rate of response by new and young entrepreneurs, organizations and business entities.

8. Taxation in Bahrain Bahrain has no personal income tax. However, citizens must pay 7 per cent of their income in social security while expats pay 1 percent. There are also taxes on renting homes and stamp duties on real estate transfers.

9. Trade The Bahrain is the 104th largest export economy in the world. In 2017, Bahrain exported $5.58B and imported $7.13B, resulting in a negative trade balance of $1.55B. In 2017 the GDP of Bahrain was $35.3B and its GDP per capita was $47.5k. The top exports of Bahrain are Refined Petroleum ($2.1B), Raw Aluminum ($1.03B), Aluminum Wire ($286M), Aluminum Plating ($273M) and Iron Ore ($187M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Cars ($775M), Iron Ore ($328M), Gas Turbines ($321M), Planes, Helicopters, and/or Spacecraft ($152M) and Rolled Tobacco ($133M).

10. Banking in Bahrain Bahrain's banking system consists of both conventional and Islamic banks and is the largest component of the financial system, accounting for over 85% of total financial assets. The banking sector has played a pivotal role in the emergence of Bahrain as a leading financial center in the region.

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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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