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Benefits of Making Business in Kuwait | Buy & Sell Business

<br>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

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Benefits of Making Business in Kuwait | Buy & Sell Business

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

  4. Country Overview Oil-rich Kuwait is a tiny country nestling at the top of the Gulf. Flanked by powerful neighbours Saudi Arabia, Iraq and Iran, its strategic location and massive oil reserves make it one of the world's richest countries per capita. A conservative state with a Sunni Muslim majority and a US ally, Kuwait stands out from the other Gulf monarchies for having the most open political system. But tensions have persisted between parliament and the cabinet, controlled by the ruling Al-Sabah family, and the government is facing increasing calls for radical political reform from the opposition.

  5. Executive Summary Kuwait is a sovereign Arab state situated in the northeast of the Arabian Peninsula in Western Asia. It is bordered by Iraq to the north and west, Saudi Arabia to the south, and the Persian Gulf to the east. The official language of Kuwait is Arabic, and the currency is the Kuwaiti dinar (KWD). Kuwait has a geographically small, but wealthy, relatively open economy with crude oil reserves of about 102 billion barrels, which is more than 6% of the world’s crude oil reserves. Kuwaiti officials plan to increase oil production to 4 million barrels per day in 2020. Petroleum accounts for over half of gross domestic product (GDP), 94% of export revenues, and 90% of government income. .

  6. Introduction – Doing business in Kuwait The State of Kuwait is the world’s eighth biggest exporter and the tenth largest producer of oil with a small land mass of 20,000 square kilometers and 4.2 million population, is a viable destination for foreign investment. Geopolitical position of Kuwait in the northern Arabian Gulf bordering three major markets of KSA, Iraq and Iran presents a perfect location for entering markets in various directions including Eastern Asia, Turkey and into Central Europe. Strong investment grade sovereign ratings and low political risk enable a possibility for foreign companies to do business with this country and on the other hand the Government’s strong financial position gives it the ability to sign large projects.

  7. Conducting business in Kuwait industrial areas located in Shuwaikh, Sabhan and Shuaiba. Home to around 10 percent of the world’s oil reserves, business in Kuwait is largely centered on the oil industry. Other major sectors include construction, finance and water desalination. According to the World Bank’s Ease of Doing Business Survey for 2019, Kuwait was ranked 97th out of 190 countries. The country scored well in the areas of paying taxes (7th) and registering property (69th), but fell short in getting credit (134th) and trading across borders (159th). Kuwait has a very open economy and a well-educated workforce made up predominantly of foreign workers. The centre of business is the capital, Kuwait City, with large

  8. Taxation in Kuwait • there was a maximum rate of 55%). • The computation of the tax liability is usually based on the profits disclosed in the audited financial statements, adjusted for specific taxation treatments. • Profits (capital gains) earned on disposal of and dividend income earned from securities listed on Kuwait Stock Exchange shall not be taxable in Kuwait. • Losses can be carried forward for a maximum period of three years (prior to 2 February 2008 there was no time limitation) • Generally, a statute of limitation period of five years applies. • A foreign principal carrying out business in Kuwait through an agent shall be considered subject to tax in Kuwait. A 15% flat rate of income taxation (prior to 2 February 2008

  9. Trade Kuwait is the 51st largest export economy in the world and the 57th most complex economy according to the Economic Complexity Index (ECI). In 2017, Kuwait exported $45.9B and imported $33.4B, resulting in a positive trade balance of $12.5B. In 2017 the GDP of Kuwait was $120B and its GDP per capita was $71.9k. The top exports of Kuwait are Crude Petroleum ($31.3B), Refined Petroleum ($5.68B), Petroleum Gas ($2B), Acyclic Alcohols ($1.03B) and Cyclic Hydrocarbons ($1.02B), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Cars ($2.62B), Broadcasting Equipment ($1.6B), Packaged Medicaments ($925M), Valves ($692M) and Jewellery ($691M).

  10. Banking in Kuwait The banking sector is fundamentally sound. Kuwait has 11 local commercial banks, which include five Islamic banks. The largest bank is the National Bank of Kuwait (NBK). Following an amendment to the Banking Law of 1968, the National Assembly allowed foreign banks to establish operations in Kuwait. Currently, 12 foreign banks have branches in Kuwait. Well- known financial conglomerates such as Citi Bank, BNP-Paribas, and HSBC operate in Kuwait. Two specialized government-owned banks provide medium and long-term financing. The Industrial Bank of Kuwait offers financing for industrial and agricultural related projects. The Credit and Savings Bank facilitates the purchase of single-family or multi-family residential units. Banks are under the supervision of the Kuwait Central Bank.

  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

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