Benefits of Making Business in Gaza Strip | Buy & Sell Business

1. BENEFITS OF MAKING BUSINESS IN THE GAZA STRIP 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 THE GAZA STRIP WWW.MERGERSCORP.COM

4. Country Overview The Gaza Strip is a small Palestinian territory, about twice the size of the District of Columbia, located along the Mediterranean coast between Egypt and Israel. Palestinians are ethnic Arab and majority Muslim. Road and areal distance between: Gaza (Gaza Strip, Palestinian Territory) and Jerusalem (Israel). Distance from equator: Gaza 3502.5 km North. Jerusalem 3532.4 km North. difference: 29.9 km to North. The Palestinian Territories consist of two distinct areas: the West Bank (including East Jerusalem) and the Gaza Strip. The southern limit of the Gaza Strip is the border with Egypt. Egypt renounced all claims to land north of the international border, including the Gaza Strip, in the Egypt–Israel Peace Treaty.

5. Executive Summary Agriculture is the economic mainstay of the employed population, and nearly three-fourths of the land area is under cultivation. The chief crop, citrus fruit, is raised on irrigated lands and is exported to Europe and other markets under arrangement with Israel. Truck crops, wheat, and olives also are produced. Light industry and handicrafts are centered in Gaza, the chief city of the area.

6. Introduction – Doing business in The Gaza Strip Gaza is ranked 117 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The rank of West Bank and Gaza deteriorated to 117 in 2019 from 116 in 2018. As it is developing, there is a lot opportunity for corporate and any individual for significant growth as it is very clear that many stone of economy is upturned yet. Agriculture, handicrafts, Stonecutting, transportation, communication and tourism are explore and many more to add on.

7. Conducting business in The Gaza Strip The business structure needs to be registered and should operate or run the business as per governing laws. Foreign investor can have their branch in Palestine which can be set up there but it does not have separate legal entity and an extension of the overseas parent company. Various form of Company under Companies Act in Palestine is described in brief as below:- Regular Public Company Regular limited liaility company shareholding company private limited liabiity corporation foreign company It could be regular or shareholding companies. It will register as foreign companies or branches of foreign companies. It is not allowed for any foreign Company to perform any business unless it is registered with the Companies' Registrar. It must present the required documents to the Companies Registrar. If any changes occur in the company's documents, the company must inform the authority through the same Registration procedure.

8. Taxation in The Gaza Strip company as any public or private shareholding company incorporated or registered in accordance with the prevailing law. Thus far, no distinction has been made between local and foreign companies for the purposes of taxation. The Palestinian Authority is empowered under the Paris Protocol to set certain indirect taxes, such as a value-added tax and import duties. The Palestinian Authority collects these revenues, and if they are still collected by the Civil Administration, the revenues are transferred by the Civil Administration to the Palestinian Authority. Under the terms of the Paris Protocol, the Palestinian Authority's ability to determine a value added tax for Gaza and the West Bank is limited by the restriction that the rate may not be under 15 percent. At present, value added tax is charged at a rate of 17 percent in both Gaza and the West Bank, the same rate prevailing in Israel. The controlling tax laws in the West Bank and Gaza define a

9. Trade Palestine is the 185th largest export economy in the world. In 2017, Palestine exported $94.8M and imported $935M, resulting in a negative trade balance of $840M. In 2017 the GDP of Palestine was $14.5B and its GDP per capita was $4.89k. The top exports of Palestine are Tropical Fruits ($14.2M), Scrap Iron ($13.4M), Packaged Medicaments ($8.69M), Building Stone ($8.5M) and Pure Olive Oil ($7.52M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Cars ($163M), Cement ($40.1M), Baked Goods ($39.8M), Chocolate ($29.6M) and Frozen Bovine Meat ($27M).

10. Banking in The Gaza Strip In accordance with Oslo 2, responsibility for banking has been transferred to the Palestinian Authority. The Paris Protocol contains significant provisions that will affect Palestinian banking when implementing legislation and regulation is effected. The Paris Protocol authorized the creation of the Palestinian Monetary Authority (PMA), which enjoys the powers of most central banks, with the notable exceptions that it cannot issue a Palestinian currency and it cannot apply for state membership status at the International Monetary Fund. The PMA supervises fiscal policy in the Palestinian Authority and manages official reserves. It also reviews proposed legislation that will regulate banking in the future.

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