Benefits of Making Business in Belarus | Buy & Sell Business

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

4. Country Overview Belarus, officially the Republic of Belarus, formerly known by its Russian name Byelorussia or Belorussia, is a landlocked country in Eastern Europe bordered by Russia to the northeast, Ukraine to the south, Poland to the west, and Lithuania and Latvia to the northwest. Its capital and most populous city is Minsk. Belarus, a landlocked country in Eastern Europe, is bordered by Russia to the northeast, Ukraine to the south, Poland to the west, and Lithuania and Latvia to the northwest. It has an area of 207,600 square kilometers and a population of about 9.5 million. Belarus has been ruled with an iron fist since 1994 by President Alexander Lukashenko.

5. Executive Summary The topography of Belarus was largely shaped by glaciation during the Pleistocene Epoch (i.e., about 2,600,000 to 11,700 years ago). Much of the country consists of flat lowlands separated by low level-topped hills and uplands. The highest point, Dzyarzhynskaya Hill, is only 1,135 feet (346 metres) above sea level, and more than half the surface area of Belarus lies below 660 feet (200 metres). Belarus is an authoritarian state. The country’s constitution provides for a directly elected president, who is chief of state, and a bicameral parliament, the national assembly. A prime minister appointed by the president is the nominal head of government. In practice, however, power is concentrated in the presidency.

6. Introduction – Doing business in Belarus As a young growing economy the Republic of Belarus has a great emphasis on attracting foreign investment. The current stance of the Eurasian Economic Commission uniting Belarus, Russia and Kazakhstan introduces great possibilities in terms of the wide access to the developing markets of these countries. The creation of the Customs Union in which the Republic of Belarus is participating allows the free movement of goods between Belarus, Russia and Kazakhstan without customs duties and with zero VAT on export. Favorable investment regimes have been established in all Belarusian regions, including free economic zones and the Great Stone China-Belarus Industrial Park.

7. Conducting business in Belarus The Republic of Belarus is situated in the crossroad of business opportunities as it lies in the heart of the trade roads from west to east and from north to south. The country’s favorable geographic position, perhaps best in its region, has resulted in improvement of the investment climate with over 200 million potential consumers. Being trade-friendly and having highly skilled workforce, Belarus now shows the highest in its history capacity to carry out profitable business activity. In 2005, unique High Technology Park (HTP), which creates a favorable environment for business development in the field of information technologies, was opened in Minsk.

8. Taxation in Belarus Belarus has a flat rate of 12% for its tax residents and for the Belarusian income of non-residents. There is no capital gains tax, stamp duty and inheritance tax for individuals. Dividends and other business income received by foreign investors are taxed at 12%. VAT is payable on most goods in Belarus at 20%. The fundamental document defining the structure of the tax system of the Republic of Belarus is the Tax Code of the Republic of Belarus consisting of the General and Special Parts. The tax payments which are in force in the Republic of Belarus are divided into republican taxes, duties (fees) and local taxes and fees.

9. Trade Belarus is the 63rd largest export economy in the world and the 30th most complex economy according to the Economic Complexity Index (ECI). In 2017, Belarus exported $28.5B and imported $33B, resulting in a negative trade balance of $4.42B. In 2017 the GDP of Belarus was $54.5B and its GDP per capita was $18.8k. The top exports of Belarus are Refined Petroleum ($5.34B), Potassic Fertilizers ($2.27B), Delivery Trucks ($1.04B), Cheese ($797M) and Tractors ($614M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Crude Petroleum ($5.32B), Petroleum Gas ($2.79B), Refined Petroleum ($1.08B), Cars ($549M) and Packaged Medicaments ($455M)..

10. Banking in Belarus Belarusian banks make up the country’s financial and credit system, together with the budget segment, enterprises, institutions, financial assets of extra-budgetary funds, organizations, and citizens. As of 2017, there were three non-bank financial institutions and 24 banks in Belarus. The banking system of the Republic has two levels. It consists of the National Bank of the Republic of Belarus and other banks, among which are banks with foreign capital and subsidiaries of foreign banks registered on the territory of Belarus.

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