Benefits of Making Business in Spain | Buy & Sell Business

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

4. Country Overview Spain, a country on Europe’s Iberian Peninsula, includes 17 autonomous regions with diverse geography and cultures. Capital city Madrid is home to the Royal Palace and Prado museum, housing works by European masters. Haiti is Destination Spain, officially the Kingdom of Spain, one of the two countries situated on the Iberian Peninsula. Spain has a coastline at the Atlantic Ocean in north and the Mediterranean Sea in south east. It is bordered by Andorra, France, Gibraltar (U.K.), Portugal, and Morocco, it also shares maritime borders with Algeria and Italy. Spain occupies an area of 505,992 km² making it the fourth largest country in Europe, and the second largest in western Europe. Compared it is twice the size of the United Kingdom, or slightly more than twice the size of the US state of Oregon. Spain has a population of 46.4 million people (in 2016), capital and largest city is Madrid, Spain's second city is Barcelona, the capital city of Catalonia. Official and national language is Spanish, co-official languages are Basque, Catalan and Galician. Spain is known for its food, Flamenco music and dance, bullfights, horses, arts and literature, architecture, a Moorish heritage, its islands, Mediterranean beaches, wines, fruits and vegetables, and football (soccer).

5. Executive Summary Spain's location at the crossroads of the Atlantic and the Mediterranean, Europe and Africa, has made it a key political and cultural bridge across five continents. Through exploration and conquest, Spain became a world power in the 16th century, and maintained a vast overseas empire until the 19th century. Its modern history was marked by the bitter civil war of 1936-39, and the ensuing decades-long dictatorship of Francisco Franco. Since General Franco's death in 1975, Spain has made the transition to democracy, and built a modern economy. The country's 17 regions have their own directly-elected authorities, but separatism remains a live issue in wealthy Catalonia in the north-east. As of 1 January 2019, Spain had a total population of 47,007,367, which represents a 0.59% increase since 2018. Spain, a country on Europe’s Iberian Peninsula, includes 17 autonomous regions with diverse geography and cultures.

6. Introduction – Doing business in Spain The business model offered by franchises are highly advisable for new entrepreneurs anywhere in the world and in Spain, are recommended by economists in terms of profitability. This item has the advantage of undertaking it without having to have much notion of the business since they give you all the knowledge of the operational, commercial and administrative management. We named you some of the most successful: travel agencies, bookstores, women’s fitness, human resources and laws for children. Put your money to work on one of these most profitable business options in Spain. In Spain has increased significantly the awareness of caring for the environment, so it has become fashionable to use electric motorcycles. That’s right, many people have been inclined to buy or rent electric scooters. If you have a desire to invest, here is a very profitable business; What gives it great appeal is that scooters are very economical compared to other bikes. Its price usually ranges between 200 and 300 euros wholesale, giving an excellent profit margin that makes this proposal a highly recommended option.

7. Conducting business in Spain Spain is the third country to receive more tourists per year. In addition, studies have revealed that Spaniards spend 14% of their annual income on their summer vacation. These two factors keep the tourism sector one of the most attractive for investors. There are innumerable businesses that you can undertake in this branch and that will help you increase your capital in less time. Some of them are: -Tour Packages: Opening a travel agency to offer tour packages, including tours, is a very lucrative idea. These establishments live full of people looking for the best option. -Hotels and Inns: Owning a hotel or an inn on a beach or mountain, becomes one of the best investments because the capital investment is recovered in a short term. - Taxi lines: Form a line taxi, classical or executive, is definitely one of the most profitable businesses for the high demand of this market, especially if the service is provided from the airports.

8. Taxation in Spain Personal income tax rates Savings taxable income is taxed at the following rates: •19% for the first EUR 6,000 of taxable income. •21% for the following EUR 6,000 to EUR 50,000 of taxable income. •23% for any amounts over EUR 50,000. •For general taxable income, progressive tax rates are applied. Tax liability may therefore differ from one autonomous community to another. Non-resident income tax rates For non-residents, income obtained without a PE is taxed at the following rates: •General rate: 24%. For residents in other EU member states or European Economic Area (EEA) countries with which there is an effective exchange of tax information, the rate is 19%. •Capital gains generated from transfers of assets: 19%. •Interest: 19%. Interest is tax exempt for EU residents. Double taxation treaties •Dividends: 19% •Royalties: 24% •Pensions are taxed at progressive rates

9. Trade Spain is the 16th largest export economy in the world and the 28th most complex economy according to the Economic Complexity Index (ECI). In 2017, Spain exported $296B and imported $332B, resulting in a negative trade balance of $35.7B. In 2017 the GDP of Spain was $1.31T and its GDP per capita was $38k. The top exports of Spain are Cars ($36.4B), Refined Petroleum ($10.8B), Vehicle Parts ($10.2B), Packaged Medicaments ($8.37B) and Delivery Trucks ($6.29B), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Crude Petroleum ($23.2B), Cars ($20.1B), Vehicle Parts ($15.9B), Packaged Medicaments ($9.5B) and Petroleum Gas ($7.82B). The top export destinations of Spain are France($40.5B), Germany ($33.9B), Portugal ($24.2B), Italy($22.7B) and the United Kingdom ($20.7B). The top import origin are Germany ($43.5B), France ($37.6B), China ($28.6B), Italy ($23.3B) and the United States($14.9B).

10. Banking in Spain Banco Santander Established in Santander in 1857, Banco Santander is the largest of the banks in Spain. Since 2000, the Spanish banking group’s been expanding through many acquisitions. It operates across Europe, South America, North America, and Asia. In May 2016, it ranked 37th in the Forbes Global 2000 list of the biggest public companies in the world. •Revenue: 48.392 billion euros •Net income: 8.96 billion euros •Total assets: 1.444 trillion euros Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) is a global financial group and is the second largest of banks in Spain. It is a product of the merger between Banco Bilbao Vizcaya and Argentaria in 1999. Founded in 1857, the bank provides financial services to 72 million customers in over 30 countries. BBVA operates a huge network of branches all over the world. Aside from being a leading bank in the Spanish market, it is the biggest financial institution in Mexico. •Revenue: 9.22 billion euros •Net income: 2.083 billion euros •Total assets: 400.08 billion euros

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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