Benefits of Making Business in Comoros | Buy & Sell Business

1. BENEFITS OF MAKING BUSINESS IN COMOROS

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 COMOROS WWW.MERGERSCORP.COM

4. Country Overview Comoros was frequented by travelers from Africa, Madagascar, Indonesia, and Arabia before the first Europeans encountered the islands. Arabic influence has been the strongest. The Union of the Comoros has experienced more than 20 attempted coups since independence in 1975, most recently in 2013. Under a constitution adopted in 2001, the presidency rotates among the country’s three islands. In 2016, former coup leader Azali Assoumani won the presidency in a runoff election. In 2018, Assoumani suspended the constitutional court, cracked down on the opposition, and won a referendum to centralize executive power and perhaps remain in office through 2021. As a former colony, Comoros prioritizes its aid and trade relations with France; the French Treasury guarantees the Comorian franc. Comoros is a leading producer of ylang-ylang, cloves, and vanilla. In 2017, it applied for membership in the Southern African Development Community.

5. Executive Summary One of the world's poorest and smallest economies, the Comoros is made up of three islands that are hampered by inadequate transportation links, a young and rapidly increasing population, and few natural resources. The low educational level of the labor force contributes to a subsistence level of economic activity and a heavy dependence on foreign grants and technical assistance. Agriculture, including fishing, hunting, and forestry, accounts for about 50% of GDP, employs a majority of the labor force, and provides most of the exports. After more than 20 coups or attempted coups, the archipelago of islands that make up Comoros are trying to consolidate political stability and use their picture-perfect beaches to climb out of poverty.There are four major islands, as well as many smaller ones, in the country: Grande Comore; Moheli; Anjouan; and Mayotte. Mayotte, however, voted against independence and is still governed by France.To add to the country's troubles, two of the four major islands, Anjouan and Moheli, declared unilateral independence in a violent conflict in 1997.

6. Introduction – Doing business in Comoros The economy of the Comoros is based on subsistence agriculture and fishing. Comoros has inadequate transportation links, a young and rapidly increasing population, and few natural resources. Comoros is ranked 160 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The rank of Comoros improved to 160 in 2019 from 164 in 2018. Ease of Doing Business in Comoros - data, historical chart, and calendar of releases - was last updated on February of 2020 from its official source. As a result, most of the inhabitants make their living from subsistence agriculture and fishing. Steady improvements to the investment climate were seen in this year's Doing Business report. Reforms have reduced the number of days and procedures needed to start a business, among other indicators. And by recently joining the World Bank Group’s Multilateral Investment Guarantee Agency.

7. Conducting business in Comoros Starting a business in Comoros takes approximately 24 days as compared to about 46 days for the Sub-Saharan Africa region. This piece outlines the general technical procedures for starting a business in Comoros, according to the Doingbusiness.org database by the World Bank. It includes details and requirements to be in good standing with all relevant agencies beyond the company registrar like social security agencies. Doing Business 2019 covers 11 areas of business regulation. Ten of these areas starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency are included in the ease of doing business score and ease of doing business ranking. Doing Business also measures features of labor market regulation, which is not included in these two measures.

8. Taxation in Comoros Taxation in the Comoros is based on the French tax system. However, taxes are complex and tax rates are quite high. Under the General Tax Code, corporation tax applies to Comoran- sourced income at a rate of 35%. If a company’s turnover exceeds KMF500m the corporate tax rate is 50%. There is an annual tax on the rental value of property; rates are set at 20% for farms and 30% for industrial and commercial units. There is also a per-hectare tax of up to KMF10,000 on agricultural land, the rate of tax depending on the type of land use. There are a number of taxes on property. Taxes on recording property transactions are levied at 2% of the value for property rights and mortgages and 1% of the cumulative value for leases. Tax on real estate transfers is charged at 2-9% of the selling price depending on the type of property involved.There is an annual tax on the rental value of a property of 20% for residential units. Real estate capital gains are taxed at a flat rate of 20%. There is a consumption tax that has a standard rate of 10%. There are two reduced rates: electricity and telephone supply and banking services (5%); water supplies, private school fees and inter-island air fares (3%). Basic necessities are zero-rated.

9. Trade Comoros is the 187th largest export economy in the world. In 2017, Comoros exported $74M and imported $295M, resulting in a negative trade balance of $221M. In 2017 the GDP of Comoros was $1.07B and its GDP per capita was $2.75k. The top exports of Comoros are Cloves ($41.1M), Essential Oils ($14.4M), Vanilla ($13.1M), Scrap Vessels ($2.9M) and Industrial Fatty Acids, Oils and Alcohols ($1.05M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Used Clothing ($25.6M), Non-Knit Women's Suits ($25.4M), Other Furniture($22.9M), Rice ($18.5M) and Awnings, Tents, and Sails ($17.6M). The top export destinations of Comoros are India($24.1M), France ($15.1M), Indonesia ($9.6M), Germany ($6.5M) and the United States ($5.07M). The top import origins are Tanzania ($87.8M), China ($64M), France ($31.7M), Pakistan ($23.5M) and India ($19.6M).

10. Banking in Comoros The Comorian banking system is constituted of six different banks: the Central Bank (BCC); the Banque pour l'Industrie et pour le Commerce-Comores (BIC-C), the Banque de Développement des Comores (BDC), the Banque Fédérale de Commerce (BFC), the Exim Bank Comores SA and the Société Nationale des Postes et des Services. The bases of this cooperation are based on: the unlimited guarantee given by the French Treasury, reflected by the unlimited convertibility of the currency issued by the Central Bank of the Comoros, the fixed parity between the Comorian Franc and the Euro, without limitation of amount, the free transferability of funds within the Franc Zone, Centralization of BCC's foreign exchange reserves with the French Treasury (at least 65% of reserves). These assets benefit from a currency exchange guarantee vis-à- vis the DTS, the operating methods of which are defined in the transaction account agreements. Banque Centrale des Comores (Central Bank of the Comoros) is a Central Bank located in Moroni Comoros, Africa. Current Assets for Central Bank of the Comoros is $282,388,000 and SWFI has 2 periods of historical assets2 personal contacts available for CSV Export.

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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