Benefits of Making Business in Iran | Buy & Sell Business

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

4. Country Overview Iran, also called Persia, and officially the Islamic Republic of Iran, is a country in Western Asia. With 82 million inhabitants, Iran is the world's 18th most populous country. Its territory spans 1,648,195 km², making it the second largest country in the Middle East and the 17th largest in the world. Iran ranks second in the world in natural gas reserves and fourth in proven crude oil reserves. Iran’s economy is characterized by the hydrocarbon sector, agriculture and services sectors, and a noticeable state presence in manufacturing and financial services. Economic activity and government revenues still depend to a large extent on oil revenues and therefore remain volatile.

5. Executive Summary Conventionally, Iran is the easternmost country in the Middle East. The land was formerly known as Persia. Iran is bordered by Afghanistan, Armenia, Azerbaijan, Iraq, Pakistan, Turkey, and Turkmenistan. The country also shares maritime borders with Kazakhstan and Russia (in the Caspian Sea), Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Iran has a population of 83 million people (in 2020) [1]. The country's largest city is Tehran, which is the capital and the political and economic center of the republic. Other major cities are Mashhad, Isfahan, Karaj, Tabriz, Shiraz, Ahvaz, and Qom. Spoken languages are Persian, Kurdish, Azeri, Arabic, Baluchi.

6. Introduction – Doing business in Iran Iran ranked 128th out of 190 economies analyzed in The World Bank’s Ease of Doing Business Survey for 2019. It scored highest in the areas of dealing with construction permits and enforcing contracts. The economy of Iran is a blended and change economy with a huge open area. Somewhere in the range of 60 percent of the economy is midway arranged. It is overwhelmed by oil and gas creation, albeit more than 40 enterprises are specifically engaged with the Tehran Stock Exchange, outstanding among other performing trades on the planet over the previous decade. With 10% of the world’s demonstrated oil stores and 15 percent of its gas saves, Iran is viewed as a “vitality superpower”.

7. Conducting business in Iran In general, there are seven types of company in Iran: •Public Joint Stock Company or Corporation. •Limited Liability Company (Commonly known as L.L.C.), •General Partnership, •Limited Partnership, •Private Joint Stock Company, •Proportional Liability Partnership, •Production and Consumption Cooperative Society. The country's business infrastructure and processes may not be on par with those of the Western world. However, the Iranian economy offers plenty of potential for discerning expat entrepreneurs.

8. Taxation in Iran The standard corporate income tax rate in Iran is 25%. Companies that are quoted on the Stock Exchange and Commodity Exchange are eligible to a reduced corporate income tax rate of 22,5%. A withholding tax rate of 3% applies to payments made by companies:(1) to service providers; and (2) for rental payments. In Iran, both resident and non-resident individuals are taxed (1) on the income received from employment relationships within the territory of Iran and (2) on all other income received from sources in Iran.

9. Trade Iran is the 46th largest export economy in the world and the 66th most complex economy according to the Economic Complexity Index (ECI). In 2017, Iran exported $53.7B and imported $49.9B, resulting in a positive trade balance of $3.84B. In 2017 the GDP of Iran was $454B and its GDP per capita was $20.8k. The top exports of Iran are Crude Petroleum ($38.5B), Ethylene Polymers ($2.75B), Acyclic Alcohols ($1.36B), Refined Petroleum ($1.32B) and Iron Ore ($1.19B), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Cars ($2.7B), Vehicle Parts ($1.71B), Corn ($1.08B), Rice ($891M) and Broadcasting Equipment ($808M).

10. Banking in Iran "BANK MARKAZI JOMHOURI ISLAMI IRAN" is the central bank of the Islamic Republic of Iran. The Central Bank of Iran (CBI) was established in 1960 (1339 solar year). As stated in the Monetary and Banking Act of Iran (MBAI), CBI is responsible for the design and implementation of the monetary and credit policies with due regard to the general economic policy of the country. Four major objectives of CBI as stated in the MBAI are: • Maintaining the value of national currency • Maintaining the equilibrium in the balance of payments • Facilitating trade-related transactions • Improving the growth potential of the country

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