Benefits of Making Business in Canada | Buy & Sell Business

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

4. Country Overview The Canada, second largest country in the world in area (after Russia), occupying roughly the northern two-fifths of the continent of North America. Canada is officially bilingual in English and French, reflecting the country’s history as ground once contested by two of Europe’s great powers. Canada shares a 5,525-mile- (8,890-km-) long border with the United States (including Alaska)—the longest border in the world not patrolled by military forces—and the overwhelming majority of its population lives within 185 miles (300 km) of the international boundary. Canada has been an influential member of the Commonwealth and has played a leading role in the organization of French- speaking countries known as La Francophonie. It was a founding member of the United Nations and has been active in a number of major UN agencies and other worldwide operations.

5. Executive Summary The national capital is Ottawa, Canada’s fourth largest city. It lies some 250 miles (400 km) northeast of Toronto and 125 miles (200 km) west of Montreal, respectively Canada’s first and second cities in terms of population and economic, cultural, and educational importance. The third largest city is Vancouver, a centre for trade with the Pacific Rim countries and the principal western gateway to Canada’s developing interior. Other major metropolitan areas include Calgary and Edmonton, Alberta; Quebec city, Quebec; and Winnipeg, Manitoba. Canada is bounded by the Arctic Ocean to the north, Greenland to the northeast, the Atlantic Ocean to the east, 12 states of the United States to the south, and the Pacific Ocean and the U.S. state of Alaska to the west.

6. Introduction – Doing business in Canada Canada is ranked 23 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The rank of Canada deteriorated to 23 in 2019 from 22 in 2018. Canada has the seventh largest economy in the world (measured in US dollars at market exchange rate), is one of the world’s wealthiest nations, and a member of the Organization for Economic Co-operation and Development(OECD) and Group of Seven (G7). As with other developed nations, the Canadian economy is dominated by the service industry, which employs about three quarters of Canadians.

7. Conducting business in Canada There are essentially four forms of business ownership in Canada: • the sole proprietorship, • the partnership, • the corporation. • the cooperative. All businesses in Canada must register their business names in their respective provinces or territories except for sole proprietorships that use only the owner's legal name with no additions (except in Newfoundland and Labrador where no sole proprietorships or partnerships need to register their names).

8. Taxation in Canada Canada's three levels of government federal, provincial and territorial, and municipal provide their citizens with a wealth of services and programs. In Canada, you will encounter the Goods and Services Tax (GST), provincial sales taxes and, in some provinces, the Harmonized Sales Tax (HST). U.S. federal income tax brackets range from 10% to 35% for individuals. On the Canadian side, the range is 15% to 29%. In the U.S., the lowest tax bracket bumps to 15% at $8,500 and to 25% at $34,501. The bottom Canadian bracket stays at 15% until $41,544

9. Trade Canada is the 12th largest export economy in the world and the 24th most complex economy according to the Economic Complexity Index (ECI). In 2017, Canada exported $377B and imported $326B, resulting in a positive trade balance of $51.2B. In 2017 the GDP of Canada was $1.65T and its GDP per capita was $46.7k. The top exports of Canada are Crude Petroleum ($54.1B), Cars ($46.5B), Refined Petroleum ($11.5B), Vehicle Parts ($10.4B) and Petroleum Gas ($10.2B), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Cars ($28.5B), Delivery Trucks ($15.6B), Refined Petroleum ($12.1B), Crude Petroleum ($10.8B) and Computers ($7.19B).

10. Banking in Canada The ‘Big Five’ banks in Canada all (RBC, BMO, TD, CIBC, and Scotiabank) have programs for newcomers. These come with special newcomer incentives, so be sure to look into them. The best bank in Canada for you will depend on your specific needs. Several other banks are : HSBC Canada, CIBC, Scotiabank, Bank of Montreal (BMO), National Bank of Canada.

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

12. Looking to Buy or Sell a Business? CONTACT US NOW FOR A FREE BUSINESS VALUATION WWW.MERGERSCORP.COM

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