Benefits of Making Business in New Zealand | Buy & Sell Business

1. BENEFITS OF MAKING BUSINESS IN NEW ZEALAND 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 NEW ZEALAND WWW.MERGERSCORP.COM

4. Country Overview New Zealand, a country located in the South Pacific, encompasses two major islands stretching north and south and separated by Cook Strait. Its capital city is Wellington. New Zealand is about 1,000 miles (1,600 km) long (north-south) and about 280 miles (450 km) across at its widest point. The country has slightly less surface area than the U.S. state of Colorado and a little more than the United Kingdom. New Zealand is nominally Christian, with Roman Catholic, Anglican, and Presbyterian denominations being the largest. The two official spoken languages are English and Māori, and the currency is the New Zealand dollar (NZD).

5. Executive Summary New Zealand is a wealthy Pacific nation dominated by two cultural groups: New Zealanders of European descent; and the Maori, the descendants of Polynesian settlers. The mountainous country of both islands is cut by many rivers, which are swift, unnavigable, and obstructive to communication. The longest is the Waikato, in the North Island, and the swiftest is the Clutha, in the South. The indigenous vegetation of New Zealand consisted of mixed evergreen forest covering perhaps two-thirds of the total land area. Agriculture is the economic mainstay, but manufacturing and tourism are important and there is a world-class film industry.

6. Introduction – Doing business in New Zealand In 2017, New Zealand was voted 1st out of 189 economies in the world for ease of doing business, (according to the IFC World Bank – Doing Business Report). New Zealand has an open economy that works on free market principles. With the global markets focused towards Asia, and increasing geo-political instability, New Zealand is in an increasingly desirable geographic location. New Zealand has a stable democratic political system, with strong legal and judicial institutions, a resilient economy and an abundance of natural resources. Couple this with a stable, transparent and open-market economy, free floating currency and very few limitations on where and how overseas parties can invest, and New Zealand provides great opportunities for overseas investment.

7. Conducting business in New Zealand Businesses in New Zealand generally use one of these three structures : •Sole Trader •Partnership •Limited Liability Company •Branch Office The sole trader can start the business in NZ without incorporating a company. The agency that does the registration of companies is the New Zealand Companies Office (NZCO). For a company to be incorporated the applicant must have a reserved name with the Registrar of Companies, together with at least 1 share, 1 shareholder, 1 director, a registered office and an address for service.

8. Taxation in New Zealand The various taxes you will pay are : New Zealand maximum individual tax rate is 33% for every dollar earned over NZ$70,000. 33% from $70,000 30%: $48,001 to $70,000 17.5%: $14,001 to $48,000 10.5%: $0 to $14,000 Companies and corporates are taxed at a flat rate of 28%. Capital Gains tax is generally not applied on New Zealand Investments, but applies to foreign debt and equity investments. Goods and Services Tax (GST), at a flat 15% on all goods and services.

9. Trade New Zealand is the 57th largest export economy in the world and the 41st most complex economy according to the Economic Complexity Index (ECI). In 2017, New Zealand exported $37.3B and imported $36.3B, resulting in a positive trade balance of $988M. In 2017 the GDP of New Zealand was $205B and its GDP per capita was $41.1k. The top exports of New Zealand are Concentrated Milk ($5.34B), Sheep and Goat Meat ($2.36B), Butter ($2.33B), Rough Wood ($2B) and Frozen Bovine Meat ($1.79B), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Cars ($3.81B), Crude Petroleum($1.95B), Refined Petroleum ($1.4B), Delivery Trucks ($1.35B) and Broadcasting Equipment($1.02B).

10. Banking in New Zealand The New Zealand banking system is highly concentrated. While there are currently 26 registered banks, the four large Australian- owned banks (ANZ, ASB, BNZ, and Westpac) are responsible for 86 percent of bank lending (figure 2). The five New Zealand- owned banks account for 8 percent of bank lending. For the Australian-owned banks, the New Zealand subsidiaries’ total assets represent between 9 and 16 percent of their respective Australian parent group’s total assets. These Australian-owned banks all have high credit ratings by international standards. Despite the New Zealand financial system being dominated by banks, the banking system itself is relatively small by global standards. Total assets of the banking system were just under $584 billion NZD in September 2019, which at around 192 percent of GDP is at the lower end of the range for OECD countries.

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