Benefits of Making Business in The Bahamas, | Buy & Sell Business

1. BENEFITS OF MAKING BUSINESS IN THE BAHAMAS 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 THE BAHAMAS WWW.MERGERSCORP.COM

4. Country Overview The Bahamas, extends 760 miles from the coast of Florida on the north-west almost to Haiti on the south-east. Presently, the farming population is aging with the youth not showing much interest in pursuing farming as a career and migrating to urban centers seeking better economic opportunities. The group consists of 700 islands, of which 30 are inhabited, and about 2,400 cays (coral reefs) If countries could be compared to inanimate objects, the Bahamas would surely be a collection of showcase cars – varying in their shape, size and maximum speed. With pristine exteriors, this collection of gems would attract buyers, investors and those who simply wanted a test drive –just to see what it’d be like to live ‘that kind of life’. The cars might be auctioned by a set of dealers with questionable motives, their hands slick with backhanders. On these islands, agriculture is a stabilizing social factor that supports the rural communities. Many persons who live in rural communities are engaged in agricultural activities and have been doing so for many years. Agriculture is also one of the main sources of income for persons on the Family Islands.

5. Executive Summary The Bahamas, the main urban centers are located on the islands of New Providence and, to a lesser extent, Grand Bahama. The rural communities are to be found mainly on the other populated islands, known as the Family Islands. An archipelago of 700 islands and islets, the Bahamas attracts millions of tourists each year.The visitors come to enjoy its mild climate, fine beaches and beautiful forests.A former British colony and now a Commonwealth member, the country is a major centre for offshore finance and has one of the world's largest open-registry shipping fleets. The Bahamas enjoys a high per capita income. The huge growth in the services sector of the economy has prompted people to leave fishing and farming villages for the commercial centres in New Providence Island, Grand Bahama and Great Abaco.As with other Caribbean countries, The Bahamas faces the challenge of tackling drugs trafficking and illegal immigration.It has taken steps to clean up its offshore banking system.

6. Introduction – Doing business in The Bahamas Process • Submit a Project Proposal, along with supporting documents to the Bahamas Investment Authority. • The BIA will process the application and submit the same to the National Economic Council for a determination. • Depending on the nature of the proposed business activity, the relevant Government Ministry or Agency would be consulted for input: a. Ministry of the Environment. b. Ministry of Works and Transport. c. Ministry of Housing. d. Respective Family Island Local Government. • Once a determination has been made, the BIA will communicate to the applicant in writing. •Once approval is obtained, the BIA also coordinates with other Government agencies and facilitates the implementation of projects.

7. Conducting business in The Bahamas The Commonwealth of The Bahamas welcomes International Investors who wish to establish a business in The Bahamas. All non-Bahamians or Permanent Residents seeking to do business in The Bahamas must submit a Project Proposal to the Bahamas Investment Authority (BIA). Additionally, from time to time the Government of the Bahamas offers targeted investment incentives for particular types of projects. Additionally, from time to time the Government of the Bahamas offers targeted investment incentives for particular types of projects. All non-Bahamians, Permanent Residents or Citizens seeking to access concession pursuant to the Government’s targeted investment incentive must also submit a Project Proposal to the Bahamas Investment Authority (BIA).

8. Taxation in The Bahamas In 2010, overall tax revenue was 17.2% of GDP. A value-added tax (VAT) of 7.5% has been levied 1 January 2015. The Bahamas has no income tax, corporate tax, capital gains tax, or wealth tax. Payroll taxes fund social insurance benefits and amount to 3.9% paid by the employee and 5.9% paid by the employer. The Personal Income Tax Rate in Bahamas stands at 0 percent. Bahamas Personal Income Tax Rate - data, historical chart, and calendar of releases - was last updated on February of 2020 from its official source. In Bahamas, the Personal Income Tax Rate is a tax collected from individuals and is imposed on different sources of income like labour, pensions, interest and dividends. The benchmark we use refers to the Top Marginal Tax Rate for individuals. Revenues from the Personal Income Tax Rate are an important source of income for the government of Bahamas.

9. Trade The Bahamas is the 146th largest export economy in the world. In 2017, the Bahamas exported $952M and imported $6.89B, resulting in a negative trade balance of $5.94B. In 2017 the GDP of the Bahamas was $12.2B and its GDP per capita was $30.4k. The top exports of the Bahamas are Passenger and Cargo Ships ($278M), Refined Petroleum($195M), Crude Petroleum ($124M), Crustaceans($95.9M) and Styrene Polymers ($94.8M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Passenger and Cargo Ships ($2.07B), Refined Petroleum($1.52B), Crude Petroleum ($1.42B), Recreational Boats ($181M) and Cars ($80.5M). The top export destinations of the Bahamas are Poland ($269M), the United States ($256M), Nicaragua ($76.9M), Barbados ($31.4M) and Jamaica ($30.1M). The top import origins are the United States ($2.26B), South Korea ($1.74B), Colombia ($802M), Poland ($304M) and Brazil($255M).

10. Banking in The Bahamas There are eight commercial banks in The Bahamas, two of which are Bahamian owned. These are: Fidelity Bank (Bahamas) Ltd., Citibank N.A., First Caribbean International Bank (Bahamas) (FCIB) Ltd., The Finance Corporation of The Bahamas (FINCO), Royal Bank of Canada, and Scotiabank Bahamas Limited. Bahamian-owned commercial banks are the Bank of The Bahamas International Ltd. and Commonwealth Bank Ltd. More than 250 banks and trust companies representing 25 countries are licensed to do business in the Bahamas. Bahamian laws protect the right to privacy of bank clients. Strict Bahamian laws also prohibit illicit financial activity, such as money laundering. The Central Bank of The Bahamas regulates foreign financial entities by providing a secure environment for banks specializing in private banking, mutual fund administration, and portfolio management.

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