Benefits of Making Business in Cook Islands | Buy & Sell Business

1. BENEFITS OF MAKING BUSINESS IN COOK ISLANDS 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 COOK ISLANDS WWW.MERGERSCORP.COM

4. Country Overview The 15 volcanic islands and coral atolls of the Cook Islands are scattered over 770,000 square miles of the South Pacific, between American Samoa to the west and French Polynesia to the east. A former British protectorate which became self-governing in 1965, the territory is now in free association with New Zealand. Its economy centers on tourism; the territory's natural assets include fine beaches and volcanic mountains. Named after Captain Cook, who explored them in 1773, the islands were once autonomous, home to tribes of mixed Polynesian ancestry. Governments still seek advice on matters of culture, custom and land ownership from a council of hereditary leaders known as the House of Ariki. Black pearls are the chief export. Agriculture, the sale of fishing licences to foreign fleets and offshore finance are also key revenue earners.

5. Executive Summary More than twice as many native Cook Islanders live in New Zealand than live in the islands themselves. Most of them have left in search of a brighter economic future. As New Zealand citizens they can also live in Australia. The people, ethnically similar to New Zealand’s Maoris, occupy widely scattered islands in the Southwest Pacific. The time zone is 10 hours behind GMT. The capital, Avarua, on Raratonga Island, has direct flights to New Zealand, California, Hawaii, etc. The climate is tropical and there are typhoons in summer. The Cook Islands National Infrastructure Investment Plan outlines the Cook Island’s priorities and plans for major infrastructure over the next 10 years. The plan focuses on strategic investments important to Cook Islands’ future.

6. Introduction – Doing business in Cook Islands Companies The Cook Islands has a high per capita GDP and is a strong performer in the South Pacific. Its economy is stable and its government is committed to growth. It’s among the best functioning Pacific economies and has an outlook that remains stable, with the government committed to stimulating investment and growth. The main source of economic activity in the Cook Islands is its successful tourism industry. Black pearls are the island nation’s leading export, and the Government is focused on the development of this industry. Agriculture employs more than one quarter of the working population. Manufacturing activities are limited to: fruit processing, clothing and handicrafts.

7. Conducting business in Cook Islands Companies incorporated in the Cook Islands under the International Companies Act are entitled to do conduct economic activities internationally, except where activities are deemed as being illegal or require a license such as banking or insurance. A Cook Islands International Company (IC) benefits from a fast registration procedure, strict privacy laws, anonymity, minimal reporting requirements and an exemption from all form of taxes. The Cook Islands has an asset protection legislation that is regarded as the most comprehensive and secure pieces of legislation in the world, ensuring the assets of foreign Cook Island investors, with provisions that restrict seizure, expropriation or confiscation of assets by foreign authorities or creditors.

8. Taxation in Cook Islands Revenue Management's (RMD) role is to administer the tax laws in a fair and equitable manner. We collect tax on behalf of the Government to help pay for the services that Government provides, such as healthcare services, education, infrastructure, law & order, etc. In the Cook Islands there is no capital gains tax, inheritance tax or estate duty, capital transfer tax, gifts tax or wealth tax. The main taxation on individuals is income tax at a maximum rate of 30%. There is VAT at 15%, there is Stamp Duty on some official transactions, and there are import duties.

9. Trade The Cook Islands is the 196th largest export economy in the world. In 2017, the Cook Islands exported $38.9M and imported $108M, resulting in a negative trade balance of $69.7M. The top exports of the Cook Islands are Non-fillet Frozen Fish ($15.1M), Fish Fillets ($9.7M), Tug Boats ($3.64M), Coin ($3.62M) and Recreational Boats ($1.02M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Refined Petroleum ($19.4M), Recreational Boats ($9.7M), Passenger and Cargo Ships ($4.79M), Cars ($4.12M) and Flavored Water ($2.44M).

10. Banking in Cook Islands The Cook Islands' offshore finance business was created by a series of legislative enactments in the 1980s which established a regime for international companies, partnerships and trusts, offshore banking, insurance companies and registered trustee companies. The Cook Islands banking system is among the four leading income producers on the Islands i.e., tourism, financial services, fishing and agriculture.

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