Benefits of Making Business in Brunei | Buy & Sell Business

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

4. Country Overview Brunei, independent Islamic sultanate on the northern coast of the island of Borneo in Southeast Asia. It is bounded to the north by the South China Sea and on all other sides by the East Malaysian state of Sarawak, which also divides the state into two disconnected segments of unequal size. The western segment is the larger of the two and contains the capital city of Bandar Seri Begawan. Brunei achieved independence in 1984, after having been a British protectorate since 1888. It is a member of the Commonwealth and ASEAN (Association of Southeast Asian Nations). Brunei consists of a narrow coastal plain in the north, which gives way to rugged hills in the south. The country’s highest point is Pagon Peak (6,070 feet [1,850 metres]), in the southeast. Brunei is drained by the Belait, Tutong, and Brunei rivers in the western segment and by the Pandaruan and Temburong rivers in the east; all flow generally northward to the South China Sea. The Belait is the largest river in the country.

5. Executive Summary Nearly two-thirds of the population of Brunei is classified officially as Malay. This category, however, includes not only ethnic Malays but also a number of the indigenous peoples, namely the Dusun, Belait, Kedayan, Murut, and Bisaya (Bisayah). Chinese make up about one-tenth of the population. The remainder of Brunei’s residents consists of other (non- Malay) indigenous peoples, such as the Iban (or Sea Dayak); various peoples of South Asian descent; and temporary workers, primarily from Asia and Europe. The official language is Malay, with English as a major second language. Brunei’s population is predominantly Sunni Muslim, although the Chinese usually follow Buddhism, Daoism, Confucianism, or Christianity. Some of the indigenous peoples are Christian, while others follow their own local religions. .

6. Introduction – Doing business in Brunei Brunei is ranked 66 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The rank of Brunei deteriorated to 66 in 2019 from 55 in 2018. The following are the attractive business opportunities in Brunei for both local and foreign investors: • Oil and Gas industries. • Export / Import industries - Distribution industries; Supply chain and logistics industries. • Manufacturing industries - Pharmaceutical industries; Halal food products industries. • Service industries - Financial services industries; Information and communications technology (ICT) industries; Technology industries created by women entrepreneurs for women; Retail Industries.

7. Conducting business in Brunei The following commercial entities exist in Brunei: • Brunei International Limited Partnership (Brunei ILP) • Brunei Limited Liability Company (SDN BHD) • The Brunei Free Zone Company • The Brunei Public Limited Company • The Brunei Sole Proprietorship • The Brunei branch or representative office Requirements of company formation are: Certificate of incorporation; Articles and Memorandum of Association; Compliance declaration; Minimum number of two shareholders; Minimum number of two directors; Director’s certificate; A legal registered agent; Notarized passport copies of shareholders (or another source of identification); Legal registered office address.

8. Taxation in Brunei Brunei does not currently levy any income tax on individuals and there is no sales tax or value added tax (VAT). - There are no social security taxes in Brunei. However, all citizens must contribute 5% of their salary to a state-managed provident fund. - Stamp duties are levied on a variety of documents in Brunei. Corporate in Brunei is taxed at the rate of 22% or 55%.

9. Trade Brunei is the 105th largest export economy in the world. In 2017, Brunei exported $5.53B and imported $3.14B, resulting in a positive trade balance of $2.39B. In 2017 the GDP of Brunei was $12.1B and its GDP per capita was $78.8k. The top exports of Brunei are Petroleum Gas ($2.83B), Crude Petroleum ($2.28B), Acyclic Alcohols ($154M), Aircraft Parts ($44.6M) and Industrial Fatty Acids, Oils and Alcohols ($11.7M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Refined Petroleum ($254M), Cars ($204M), Gas Turbines ($121M), Iron Structures ($115M) and Spark- Ignition Engines ($90.6M).

10. Banking in Brunei Banks in Brunei can be classified into Islamic banks and conventional banks, with the former dominating the industry. There are only seven licensed banks in Brunei, after HSBC left in 2016 and Baiduri Bank bought UOB Brunei’s retail banking business in 2015. The Brunei banking system is well monitored by the country’s Ministry of Finance, which oversees the Department of Financial Services (Treasury) and the Brunei Investment Agency. The Brunei Monetary Authority (Autoriti Monetari Brunei Darussalam or AMBD) serves as the country’s central bank and is responsible for the formulation and implementation of monetary policies, management of currency, and supervision of financial institutions.

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