Benefits of Making Business in British Virgin Is | Buy & Sell Business

1. BENEFITS OF MAKING BUSINESS IN THE BRITISH VIRGIN ISLANDS 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 BRITISH VIRGIN ISLANDS WWW.MERGERSCORP.COM

4. Country Overview The British Virgin Islands, British overseas territory in the eastern Caribbean Sea. It is part of an island chain collectively known as the Virgin Islands, which makes up the northeastern extremity of the Greater Antilles. Puerto Rico lies to the west. The British territory consists of 4 larger islands (Tortola, Anegada, Virgin Gorda, and Jost Van Dyke) and 32 smaller islands and islets, of which more than 20 are uninhabited; lesser islands include Great Tobago, Salt, Peter, Cooper, Norman, Guana, Beef, Great Thatch, Little Thatch, and Marina Cay. The chief town and port is Road Town on Tortola (21 square miles [54 square km]), the largest of the islands. The total area of the colony is 59 square miles (153 square km). Pop. (2010) 28,054.

5. Executive Summary Of all the islands, Tortola has by far the largest population, some four-fifths of the total. About one-fourth of all Tortolans live in Road Town. English is the official language; far more frequently used in practice, however, is an English-based creole, Virgin Islands Creole English. Religious affiliations are mostly with Protestant denominations, Methodists being the largest single group. The British Virgin Islands are a British overseas territory. The country is administered under a constitution that came into effect in 2007 and provided greater internal self-government. The chief executive officer is the governor, who is appointed by the British monarch.

6. Introduction – Doing business in The British Virgin Islands The economic mainstays of the British Virgin Islands are tourism and financial services. Tourism—based on the nearly perfect climate, sparkling beaches, tropical vegetation, and undersea coral reefs—provides about half of the islands’ income and is the largest employer. Also important is the offshore financial services sector. Since the mid-1980s the government has collected incorporation fees from foreign businesses that register in the islands; by the beginning of the 21st century there were some 400,000 such businesses.

7. Conducting business in The British Virgin Islands Types of companies under the BVI Business Companies Act, 2004 : • companies limited by shares; • companies limited by guarantee; • companies limited by guarantee authorized to issue shares; • unlimited companies with or without shares; • restricted purposes companies (or SPVs); and. • segregated portfolio companies (or SPCs). Other than a registered office for service of process, there is no requirement that a company registered in the BVI establish its own physical office in the BVI. Nevertheless, a number of companies either registered in or outside the BVI have chosen to establish a physical business office in the BVI for various reasons.

8. Taxation in The British Virgin Islands Individuals in the BVI pay no income tax, land or housing taxes. There is no capital gains tax, wealth tax, inheritance or gift taxes, sales tax or VAT. Stamp duty is payable on some transactions and there is a payroll tax of between 10% and14%, split between employer and employee.

9. Trade The British Virgin Islands is the 163rd largest export economy in the world. In 2017, the British Virgin Islands exported $353M and imported $829M, resulting in a negative trade balance of $476M. The top exports of the British Virgin Islands are Recreational Boats ($163M), Refined Petroleum ($39.8M), Jewellery ($27.3M), Planes, Helicopters, and/or Spacecraft ($22.6M) and Vehicle Parts ($20.6M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Recreational Boats ($249M), Passenger and Cargo Ships ($113M), Refined Petroleum ($108M), Planes, Helicopters, and/or Spacecraft ($49.1M) and Jewellery ($24.2M).

10. Banking in The British Virgin Islands Banks in the British Virgin Islands consist of six commercial banks and one restricted bank, as of 2012. The island is a major player in the global offshore financial services industry. Offshore banking came to the BVI in the 1980s, as the affordability of incorporation and the confidentiality offered by the island’s regulatory laws attracted foreign businesses from around the world. The BVI Banking and Fiduciary Services Division ensures that banks comply with domestic laws, international regulatory standards, and established best business practices.

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