Benefits of Making Business in Italy | Buy & Sell Business

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

4. Country Overview Italy, country of south-central Europe, occupying a peninsula that juts deep into the Mediterranean Sea. Italy comprises some of the most varied and scenic landscapes on Earth and is often described as a country shaped like a boot. At its broad top stand the Alps, which are among the world’s most rugged mountains. Italy’s highest points are along Monte Rosa, which peaks in Switzerland, and along Mont Blanc, which peaks in France. The capital is Rome, one of the oldest of the world’s great cities and a favourite of visitors, who go there to see its great monuments and works of art. Mountain ranges higher than 2,300 feet occupy more than one- third of Italy. There are two mountain systems: the scenic Alps, and the Apennines.

5. Executive Summary Over Italian rivers are comparatively short; the longest, the Po, is merely 400 miles (645 km) long. While three major rivers flow into the Ionian Sea, in Puglia only two rivers flow to the Adriatic. There are about 1,500 lakes in Italy. Italy is a founding member of the European Union. It is a charter member of NATO. It has been at the forefront of European economic and political unification, joining the Economic and Monetary Union in 1999. Italy has a diversified economy, which is divided into a developed industrial north, dominated by private companies, and a less- developed, highly subsidized, agricultural south, where unemployment is higher.

6. Introduction – Doing business in Italy Italy is ranked 58 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The rank of Italy deteriorated to 58 in 2019 from 51 in 2018. Italy is rapidly gaining a reputation as a hub for nascent business ventures. With the third-largest economy in the Eurozone and the eighth largest in the world, the country is considered a leader in global trade with a growing reputation for business innovation. A major feature is that product diversification is much greater in Italy than in its main competitors (for example, it is twice that of Germany). In this respect, Italy can count on greater flexibility and the production of customized goods adapting to changing demand.

7. Conducting business in Italy Foreign persons can register the following legal entities: •limited liability company; •joint stock company; •partnership limited by shares; •general partnership; •limited partnership; •cooperative; •sole proprietorship. An application for registering the company must be made at the Italian Trade Register and, after the application is processed, a registration certificate is issued for your new company.

8. Taxation in Italy Taxation of an individual's income in Italy is progressive. In other words, the higher the income, the higher the rate of tax payable. In 2018 the tax rate for an individual is between 23%-43%, In addition to direct taxation (IRPEF), there is also a regional tax of 0.7%-3.33% and a municipal tax of 0%-0.9%. The Corporate Tax Rate in Italy stands at 24%.

9. Trade Italy is the 7th largest export economy in the world and the 20th most complex economy according to the Economic Complexity Index (ECI). In 2017, Italy exported $482B and imported $441B, resulting in a positive trade balance of $40.8B. In 2017 the GDP of Italy was $1.93T and its GDP per capita was $39.4k. The top exports of Italy are Packaged Medicaments ($21.7B), Cars ($18.5B), Refined Petroleum ($13.7B), Vehicle Parts ($13.2B) and Valves ($7.73B), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Cars ($31.2B), Crude Petroleum ($24.8B), Packaged Medicaments ($15.1B), Petroleum Gas ($14.5B) and Vehicle Parts ($8.53B).

10. Banking in Italy Modern banking traces its origins to the Renaissance in Italy. In fact, Banca Monte dei Paschi di Siena, the third largest bank in Italy, is the oldest surviving bank in the world and has been open since 1472. The Italian banking sector is modern and efficient. With a bit of research, patience, and perhaps translation, expats should have no problem navigating the systems of banking and taxation in Italy. The major banks are located in and around big cities, with local branches dispersed throughout the country. The better-known banks in Italy are the Banca Nazionale del Lavoro, Intesa Sanpaolo, Unicredit and Banca Monte dei Paschi di Siena. International banks such as Deutsche Bank and Citibank also operate in 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