Benefits of Making Business in Algeria | Buy & Sell Business

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

4. Country Overview Algeria, large, predominantly Muslim country of North Africa. From the Mediterranean coast, along which most of its people live, Algeria extends southward deep into the heart of the Sahara, a forbidding desert where the Earth’s hottest surface temperatures have been recorded and which constitutes more than four-fifths of the country’s area. The Sahara and its extreme climate dominate the country. History, language, customs, and an Islamic heritage make Algeria an integral part of the Maghreb and the larger Arab world, but the country also has a sizable Amazigh (Berber) population, with links to that cultural tradition. The capital is Algiers, a crowded bustling seaside metropolis whose historic core, or medina, is ringed by tall skyscrapers and apartment blocks. Algeria’s second city is Oran, a port on the Mediterranean Sea near the border with Morocco. Less hectic than Algiers, Oran has emerged as an important centre of music, art, and education.

5. Executive Summary Algeria is bounded to the east by Tunisia and Libya; to the south by Niger, Mali, and Mauritania; to the west by Morocco and Western Sahara (which has been virtually incorporated by the former); and to the north by the Mediterranean Sea. It is a vast country—the largest in Africa and the 10th largest in the world—that may be divided into two distinct geographic regions. The northernmost, generally known as the Tell, is subject to the moderating influences of the Mediterranean and consists largely of the Atlas Mountains, which separate the coastal plains from the second region in the south. This southern region, almost entirely desert, forms the majority of the country’s territory and is situated in the western portion of the Sahara, which stretches across North Africa. The main structural relief features in Algeria were produced by the collision of the African and Eurasian tectonic plates along the Mediterranean margin, giving the country its two geographic regions.

6. Introduction – Doing business in Algeria Algeria is ranked 157 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The rank of Algeria remained unchanged at 157 in 2019 from 157 in 2018. Ease of Doing Business in Algeria averaged 151.58 from 2008 until 2019, reaching an all time high of 166 in 2017 and a record low of 134 in 2008. Algeria is known to be a resourceful country thanks to many active and developing sectors. Local authorities have set up a series of incentives so as to attract more foreign investments. Its proximity with Europe is favorable to industrial relocation.

7. Conducting business in Algeria There are four legal types of companies in Algeria: •the Limited Liability Company (LLC), •the Corporation, •the Partnership Company and •the Limited Shares Company. In the case of the Limited Liability Company, a minimum capital of 100,000 dinars divided into 1,000 dinars shares is required. By setting up a business in Algeria, you can expect low-cost gas, fuel and electricity. You can also hire qualified staff, according to the particular field, since salaries offered in the country are not so high. In fact, the minimum salary amounts to some 18,000 Algerian dinars.

8. Taxation in Algeria Income tax is progressive and categorical. Progressive scale goes from 0% to 35% according to the amount of income. It does not cover incomes below 120,000 DZD (US$1053); above this threshold and up to 360,000 DZD (US$3160) it represents 20% above it and up to 1,440,000 DZD (US$12,643) it is 30% and more than 1,440,000 DZD (US$12,643) it is 35%. Then there are categorical withholding tax rates at source.

9. Trade The European Union is Algeria's largest trading partner and absorbs the major part of Algerian international trade (50.3%). Total trade between the EU and Algeria amounted to €35.2 billion in 2016. Algeria is the EU's 20th largest partner for imports and 24th largest partner for exports. EU-Algeria trade has decreased by 13.3% between 2015 and 2016, in part due to lower oil prices. Between 2016 and 2017 EU-Algeria trade increased by 1.3%. Fuel and mining products made up 95.7% of EU imports from Algeria in 2017.

10. Banking in Algeria The Central Bank of Algeria was created by the law number 62- 144 voted by the Constituent Assembly on December 13th, 1962, creating and fixing the statutes of the Central Bank. The mission of the Bank of Algeria is to maintain, in the field of money, credit and foreign exchange, the most favorable conditions for the orderly development of the economy. The Bank of Algeria establishes the general conditions under which Algerian and foreign banks and financial institutions may be authorized to establish themselves in Algeria and to operate there.

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