1 / 13

Benefits of Making Business in Equatorial Guinea | Buy & Sell Business

At MergersCorp we help our clients confidentially buy and sell privately held businesses, aligning the interests of all parties for mutual success and satisfaction.<br><br>Find more at: http://mergerscorp.com

mergerscorp
Download Presentation

Benefits of Making Business in Equatorial Guinea | Buy & Sell Business

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. BENEFITS OF MAKING BUSINESS IN EQUATORIAL GUINEA 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 EQUATORIAL GUINEA WWW.MERGERSCORP.COM

  4. Country Overview Equatorial Guinea, country located on the west coast of Africa. It consists of Río Muni (also known as Continental Equatorial Guinea), on the continent, and five islands (known collectively as insular Equatorial Guinea): Bioko (formerly Fernando Po), Corisco, Great Elobey, Little Elobey, and Annobón. Bata is the administrative capital of the mainland. Formerly a colony of Spain with the name Spanish Guinea, the country achieved its independence on October 12, 1968. The capital is Malabo, on Bioko. Continental Equatorial Guinea is a roughly rectangular territory bounded by Cameroon to the north and Gabon to the east and south. Near the coast are the small islands of Corisco and Great and Little Elobey. Bioko, by far the largest of the islands, lies off the coast of Cameroon in the Bight of Biafra. Annobón, a volcanic island, lies south of the Equator and almost 400 miles (640 km) to the southwest of Bioko. Located in west-central Africa, Equatorial Guinea has a mainland territory, Rio Muni, which is bordered by Gabon to the east and Cameroon to the north. Five small islands, Corisco, Annabon, Bioko, and Great Elobey also lie to the south. Bioko sits about 40 km from the Cameroon coast and is the site of Malabo, the capital.

  5. Executive Summary Equatorial Guinea is a small country on the west coast of Africa which struck oil in 1995 and which is now being cited as a textbook case of the resource curse or the paradox of plenty. It is made up of a mainland territory called Rio Muni, and five islands including Bioko, where the capital Malabo is located. It is made up of a mainland territory called Rio Muni, and five islands including Bioko, where the capital Malabo is located. Since the mid 1990s the former Spanish colony has become one of sub-Sahara's biggest oil producers but a large proportion of the population still lives in poverty. The mainland, called Río Muni, is located south of Cameroon and north of Gabon, with a western coast on the Bight of Biafra in the Atlantic Ocean. The country includes five inhabited islands: Bioko, Annobón, Corisco, and the two Elobey Islands: Little Elobey and Great Elobey. Annobón is the only part of the country located south of the equator. With a total area of about 28,051 square kilometers, the country is slightly smaller than the state of Maryland. The country is divided into seven provinces.

  6. Introduction – Doing business in Equatorial Guinea Summary of comprehensive annual data collated by the World Bank giving key indicators for business and economic conditions. Includes information on typical business procedures, showing time to complete and associated costs for each step. Comprehensive guide produced by Healy Consultants explaining company structures and business entity types, fees and timelines for incorporation, accounting and tax in this jurisdiction and comparisons with other countries in the region. Equatorial Guinea is set to be a country with high potential gas reserves and many opportunities in different sectors in the country that need to be exploited. Equatorial Guinea offers national foreign investors the desired balance and profitability for investment: Shipping industry, Agriculture sector, Tourism, Financial sector. EG is also a member of the Organization for the Harmonization of Business Law in Africa (OHADA), which provides a legal and regulatory framework. However, implementation of those laws is inconsistent and unreliable.

  7. Conducting business in Equatorial Guinea Doing business with the clan led by Teodoro Obiang, who seized power in 1979 after ousting and then killing his uncle, can be a dangerous business. So-called commissions are obligatory, and fictitious contractual disputes are common, often resulting in extortion, death threats, and the loss of all money and assets. In response to the worsening problem and the hazards to life and limb, Spain’s Foreign Ministry has just posted a warning on its website telling anybody thinking of doing business in Equatorial Guinea that foreigners are often prevented from leaving the country and, in the absence of internationally accepted arbitration procedures, can be held for weeks until disputes are settled. Once you decide to open a new company location in Equatorial Guinea, you have to make several important decisions, such as where you’ll base your headquarters, what kind of business activities you want to perform, and what other companies you should form relationships with. But that’s on top of setting up your Equatorial Guinea subsidiary and handling your parent company’s activities back at home.

  8. Taxation in Equatorial Guinea The corporate income tax (CIT) must be paid by any resident entity. Non-resident entities are subject to a 20% WHT on gross income derived from sources in Equatorial Guinea. For mobilization, demobilization, and transportation services, the WHT rate is 5%. The CIT rate is 35% on taxable profits. Individuals and legal entities engaged in economic activity, regardless of the nature or output, which are classified as taxpayers pursuant to the tax code, must register with the tax administration and obtain a tax identification number. Non-resident entities are subject to a 20% WHT on gross income derived from sources in Equatorial Guinea. For mobilisation, demobilisation, and transportation services, the WHT rate is 5%. The CIT rate is 35% on taxable profits. Personal Income Tax Rate in Equatorial Guinea averaged 35.00 percent from 2008 until 2016, reaching an all time high of 35.00 percent in 2009 and a record low of 35.00 percent in 2009.

  9. Trade Equatorial Guinea is the 109th largest export economy in the world. In 2017, Equatorial Guinea exported $4.72B and imported $755M, resulting in a positive trade balance of $3.96B. In 2017 the GDP of Equatorial Guinea was $12.3B and its GDP per capita was $24.4k. The top exports of Equatorial Guinea are Crude Petroleum ($3.14B), Petroleum Gas ($936M), Rough Wood ($248M), Acyclic Alcohols ($174M) and Special Purpose Ships ($171M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Beer ($35.2M), Poultry Meat ($28M), Machinery Having Individual Functions ($20.2M) , Refined Petroleum($18.8M) and Large Construction Vehicles($17.7M). The top export destinations of Equatorial Guinea are China ($1.33B), India ($547M), South Korea($452M), Portugal ($404M) and the United States($329M). The top import origins are Spain($173M), China ($165M), the United States($73M), the Netherlands ($40.1M) and France($32.7M).

  10. Banking in Equatorial Guinea Banking system capital, percent of assets: For that indicator, The International Monetary Fund provides data for Equatorial Guinea from 2010 to 2016. The average value for Equatorial Guinea during that period was 12.3 percent with a minimum of 10.57 percent in 2012 and a maximum of 15.06 percent in 2016. See the global rankings for that indicator or use the country comparator to compare trends over time. Ratio of bank capital and reserves to total assets. Capital and reserves include funds contributed by owners, retained earnings, general and special reserves, provisions, and valuation adjustments. Capital includes tier 1 capital, which is a common feature in all countries' banking systems, and total regulatory capital, which includes several specified types of subordinated debt instruments that need not be repaid if the funds are required to maintain minimum capital levels. Total assets include all nonfinancial and financial assets.

  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

More Related