Benefits of Making Business in Angola | Buy & Sell Business

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

4. Country Overview Angola is the second-largest oil producer in Africa, following Nigeria. Angola's economy depends heavily on hydrocarbon production, making its economy vulnerable to crude oil price swings. Angola, officially the Republic of Angola, is a country in South- Central Africa bordered by Namibia to the south, Zambia to the east, the Democratic Republic of the Congo to the north, and the Atlantic Ocean to the west. Angola is run by a multiparty regime, with its President as the chief of state.

5. Executive Summary The current population in 2020 is estimated at 32.87 million, up from 2014's estimated 22.1 million. As one of the least densely populated countries in the world, Angola has a density of 14.8 people per square kilometer (38/square mile). Angola is the 44th most populated country in the world. Literacy is quite low, with 67.4% of the population over the age of 15 able to read and write in Portuguese.82.9% of males and 54.2% of women are literate as of 2001. Since independence from Portugal in 1975, a number of Angolan students continued to be admitted every year at high schools, polytechnic institutes, and universities in Portugal, Brazil and Cuba through bilateral agreements; in general, these students belong to the Angolan elites.

6. Introduction – Doing business in Angola Angola is the third biggest market in Sub-Saharan Africa, and one of its fastest growing economies. Situated on the south- western coast of the continent, it is estimated that Angola will overtake Nigeria by 2020 to be Sub-Saharan Africa’s leading oil producer with production figures currently close to two million barrels per day. Angola is a mineral resource-rich country rich in oil, gas, diamonds, coffee, sisal, marble and iron, among other natural resources. However, after nearly three decades of conflict, the country has just started rebuilding its infrastructure which was neglected during the war. Angola’s economy is almost totally dependent on revenues from the oil industry, which adds up to nearly 86% of the total GDP.

7. Conducting business in Angola Angola is one of the fastest growing economies in Africa. The market offers excellent business opportunities across-the-board for existing and future investors. However, the business environment surrounding the market is challenging. Companies who intend to invest in Angola have to consider several aspects such as high costs, slow payment, lack of capacity, complex bureaucracy, ineffective communications network, language barriers and cultural norms and customs.

8. Taxation in Angola Angola Taxes Overview. Angola income tax rates for individuals (resident and non-resident) are levied on a sliding scale at rates which vary from 0% to 17%. Tax Basis – Individuals are taxed on Angola source income. The withholding tax on investment income is a final tax for individuals.

9. Trade Angola is currently U.S.’s 72nd largest goods trading partner with $3.2 billion in total (two way) goods trade during 2018. Goods exports totaled $527 million; goods imports totaled $2.7 billion. The U.S. goods trade deficit with Angola was $2.2 billion in 2018. Angola's trade surplus narrowed by 37.1 percent to USD 4,021.7 million in the first quarter of 2019 from USD 6,394.4 million in the same period a year earlier. Imports climbed 44.1 percent to USD 4,706.4 million, on account of capital goods (187.8 percent) and intermediate goods (33.8 percent).

10. Banking in Angola The Angolan banking system is the third largest in Sub-Saharan Africa, after Nigeria and South Africa. There are three state- owned banks and a total of 23 banks in Angola. Nearly half the Angolan financial system is linked to banking groups in Portugal. The top five banks, based on compound growth rates, control over 80% of total banking assets, deposits and loans and are: Banco Angolano de Investimentos (BAI) Banco Espírito Santo Angola (BESA) Banco de Fomento Angola (BFA) Banco BIC Angola (BIC) Banco de Poupança e Crédito S.A.R.L. (BPC).

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