Benefits of Making Business in Argentina | Buy & Sell Business

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

4. Country Overview The Republic of Argentina is located in South America, approximately between latitudes 23°S (Tropic of Capricorn) and 55°S (Cape Horn). The Andes separates the country from Chile in the west, and it borders Bolivia and Paraguay in the north and Brazil, Uruguay, and the South Atlantic Ocean to the east. Argentina has vast natural resources in energy and agriculture, with extraordinary fertile lands and has great potential for renewable energy. It is a leading food producer with large-scale agricultural and livestock industries.

5. Executive Summary Argentina is the third largest country in Latin America and one of the wealthiest in the region, possessing abundant human and natural resources, highly diversified industries, and a population of 43 million people. Argentina is located in the southern cone of South America, with an area of 2,766,890 sq km and a population of 40.482 million. Since the early part of the 20th century, the country has had the highest per capita income in Latin America and one of the lowest levels of poverty in the region.

6. Introduction – Doing business in Argentina The World Bank and International Finance Corporation ranked Argentina as 117th out of 190th countries in the ease of doing business. To start a business in Argentina, it takes 13 procedures and 24 days to start a business in Argentina, which is well above the OECD average but on par with other countries in Latin America and the Caribbean. Registering property requires seven procedures and an average of 51.5 days which is about 10 days less than other Latin American and Caribbean countries. Before the process begins, all of these certificates must be obtained: a certificate stating that no local taxes are due for that property, a certificate with fiscal valuation, a certificate of ownership and a certificate of good standing.

7. Conducting business in Argentina Expats doing business in Argentina will quickly learn that this South American country values personal relationships and respects the senior members of the corporate world. It also identifies more with its European roots than the Latin American influence in the country. Argentineans are generally family-orientated people, which translates into the way they conduct business. Close, personal relationships are valued, respect is given to older associates and more loyalty is shown to individual people than to companies as a whole.

8. Taxation in Argentina Federal income tax – Argentinean federal income tax is collected by the government and is based on a progressive rate ranging from 5% to 35%, depending on how much you earn. If you're earning a personal Argentinean income of more than 529,000 pesos (around $12,000), you'll fall into the 35% tax bracket.

9. Trade For a number of years Argentina imposed significant barriers on imports, exports and capital flows. As a result, the trade and investment climate deteriorated significantly. Since late 2015, however, the situation has substantially improved as the current Argentine Government has taken important steps to improve the business climate and eliminated a significant number of the barriers to trade and investment, which had built up over the years. This includes removing a number of non-automatic import licenses, exchange controls and the scaling back of export duties. Argentina is the 45th largest export economy in the world and the 50th most complex economy according to the Economic Complexity Index (ECI).

10. Banking in Argentina The largest local bank in Argentina is Banco de La Nación Argentina, although there are many others, including Grupo Financiero Galicia, Banco Patagonia, Banco Privincia, Banco CrediCoop. Citibank, HSBC and Santander are the biggest foreign banks operating in Argentina.

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