Benefits of Making Business in Saint Kitts & Nevis | Buy & Sell Business

1. BENEFITS OF MAKING BUSINESS IN SAINT KITTS & NEVIS 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 SAINT KITTS & NEVIS WWW.MERGERSCORP.COM

4. Country Overview The former British colony of St Kitts and Nevis is inhabited mostly by the descendants of West African slaves. Its beaches, scenery and a warm, sunny climate are a great tourist attraction. It is also vulnerable to hurricanes. The islands of St Kitts - also known as St Christopher - and Nevis have been in an uneasy federation since independence from Britain in 1983, with some politicians in Nevis saying the federal government in St Kitts - home to a majority of the population - had ignored the needs of Nevisians. Tourism, offshore finance and service industries are important sources of income - more so since a centuries-old but loss- making sugar industry was wound down in 2005 with the loss of hundreds of jobs.

5. Executive Summary Saint Kitts and Nevis, officially: the Federation of Saint Christopher and Nevis, two tropical islands in the Caribbean Sea and part of the Leeward Islands, are situated about 400 km east of Puerto Rico. Formerly they belonged to a British colony in the West Indies from 1882 to 1983, known as Saint Christopher- Nevis-Anguilla. The newest nations in the Western Hemisphere shares maritime borders with Antigua and Barbuda, Netherlands (Sint Maarten), Venezuela, Montserrat (United Kingdom), and Saint Barthélemy (France). The islands have a combined land area of 261 km², making it the smallest sovereign country in the Americas. The twin-islands are of volcanic origin, high central peaks covered with tropical rainforest dominate the landscape.Highest peak is Mount Liamuiga on St. Kitts at 1,156 m. Saint Kitts and Nevis has a population of 52,000 inhabitants. Capital city is Basseterre, founded in 1627.

6. Introduction – Doing business in Saint Kitts & Nevis Starting a business is a decision that comes with a lot of risks. There are also a few things that you may have to consider when thinking of starting a business in St Kitts. Persons who are looking to setup up businesses such as retail establishments will have to choose the right location and those starting-up service companies, such as construction contractors, and may need special training and equipment. St. Kitts and Nevis offers many opportunities for both business start-up and relocation. The entire necessary infrastructure is already in place. Like Agriculture, Animal husbandry, Fishing, Forestry, Mining and Tourism.

7. Conducting business in Saint Kitts & Nevis The Nevis corporations are formed and regulated by the Nevis Business Corporation Ordinance of 1984 law. A Nevis offshore corporation is called an International Business Corporation or “IBC” and it is tax exempt on all income earned from anywhere in the world except Nevis island. However, U.S. citizens and others from countries taxing worldwide income must report all income to their national tax authorities. Nevis has a stable government and its history shows no major disputes with neighboring nations. The more popular entity because of its exceptional asset protection and tax flow-through benefits is the Nevis LLC. For the vast majority, it is much more beneficial from a tax and asset protection perspective than the Nevis corporation. Type of Company/Corporation One IBC Limited provide Incorporation service in Netherlands with the type Nevis Business Corporation (NBCO) and Limited Liability Company (LLC).

8. Taxation in Saint Kitts & Nevis Rental income remitted to individuals or companies outside of St. Kitts is subject to 10% withholding tax. No capital gains tax is levied in St. Kitts and Nevis, except on assets sold within one year of acquisition, which are taxed at 20%. No capital gains tax is levied in St. Kitts and Nevis, except on assets sold within one year of acquisition, which are taxed at 20%. There are no allowable deductions. Property tax is levied at different flat rates, and the applicable tax rate depends on the property classification and its location. Residential property is subject to property tax at a flat rate of 0.002% in St. Kitts. Commercial property is subject to property tax at a flat rate of 0.003% in St. Kitts. Residential property is subject to property tax at a flat rate of 0.0075% in Nevis. Commercial property is subject to property tax at a flat rate of 0.002% in Nevis.

9. Trade Kitts and Nevis 2017. The total value of exports (FOB) is US$ 33 million. The total value of imports (CIF) is US$ 309 million. At the HS6 digit level, 425 products are exported to 39 countries and 2,961 products are imported from 126 countries. Saint Kitts and Nevis is the 188th largest export economy in the world. In 2017, Saint Kitts and Nevis exported $71.9M and imported $385M, resulting in a negative trade balance of $313M. In 2017 the GDP of Saint Kitts and Nevis was $992M and its GDP per capita was $28.6k. The top exports of Saint Kitts and Nevis are Broadcasting Equipment ($15.6M), Other Measuring Instruments ($11.6M), Low-voltage Protection Equipment ($8.86M), Scrap Vessels ($6.32M) and Electrical Resistors ($4.82M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Passenger and Cargo Ships ($48M), Cars ($14.8M), Scrap Vessels ($12M), Jewellery ($11M) and Poultry Meat ($6.78M).

10. Banking in Saint Kitts & Nevis Offshore banking falls under the Financial Services (Regulations) Order 1997. Nevis has its own Offshore Banking Ordinance 1996. Two types of banking licence are granted under the Federation's 1997 Financial Services (Regulations) Order. 'Unrestricted' licences require minimum financial resources of EC$1,350,000, while for 'restricted' licences the level is only EC$135,000. Fees for a banking licence are: US$1,000 on filing of first application for all applications (not refundable); US$8,000 on granting or renewal of authorisation for an unrestricted business, and US$4,000 for a restricted business. Licences under the Banking Ordinance are issued to eligible companies or qualified foreign banks. An eligible company must be a wholly owned subsidiary of a local bank regulated by the Eastern Caribbean Central Bank that is licensed to do business in Nevis under the Banking Act. A qualified foreign bank is a foreign bank that is licensed under the Banking Act, or is foreign bank with minimum capitalization and assets, as prescribed by the Minister, that is not licensed under the Banking Act.

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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