Investment Memorandum

INVESTMENT MEMORANDUM A PROPOSAL DOCUMENT FOR LONG TERM PROPERTY INVESTMENT IN SICILY

AUGUST 2023

INVESTMENT MEMORANDUM NON-DISCOLURE This document is being transmitted to you on condition of confidentiality and on the basis of your interest, or a perceived potential interest, in the investment proposal communicated through this document. You undertake not to share this document or disclose its content or any of it without the express and written consent of the Business Promoters.

WAIVER Whilst we solicit your consideration for investment as better described in this document, this document serves as a preliminary assessment of your interest and is not intended to serve any other purpose. This document and its contents are not binding. We do not assume responsibility for the correctness of its contents or any of it. Your acceptance to make an investment pursuance to this proposal will be subject to an investment agreement.

WHO WE ARE Dr Marco Ciliberti is the founding partner at City Consult, a boutique law firm having its principal offices in Valletta, Malta. With over twenty years of experience in the legal profession, Dr Ciliberti has garnered widespread experience in corporate and property law and transactions and has been of service to numerous local and international clients.

Mr Eamon Grixti has been in the interior design and project management consultancy business for over twenty years. He has been engaged in both small and large projects, most notably Renzo Piano’s City Gate Project at Valletta, Malta and the iconic Phoenicia Hotel in Floriana, Malta

COUNTERPART ADVISORS The preliminary advice of the following advisors has been sought.

Avvocato Maria Puglisi is the founding partner at The Puglisi Law Firm, an Italian boutique law firm specialising in real estate and estate planning with its principal offices in Catania.

Dott. Francesco Fratantonio is the sole administrator of the Modica based Studio Frantantonio offering business consultancy services and up-to-date advice on European funding opportunities for the region.

REGIONE SICILIA Set in the southern most part of the Italian peninsula and entirely surrounded by the Tyrrhenian, Ioanian and Mediterranean seas, Sicily is an island of approximately 26,000 square kilometers graced with vast golden beaches, plush countryside, archaeological ruins, astounding baroque architecture and home to the world’s most active volcano - Mount Etna.

Boasting a temperate Mediterranean climate, and world renowned for fine food, citrus groves, extra virgin olive oil and wines amongst other produce, Regione di Sicilia or Sicily offers a unique cultural and natrual heritage which is appealing to many. Domestic and international arrivals in the region in 2022 exceeded 4.9 million1.

Considered to have one of the weakest economies in the G7 region2 and dominated by agricultural and fishing activities, employment in the Sicilian region remains low, with unemployment hovering at the 16.6%3. Whilst the hospitality industry consolidates itself, property prices in the region have plummeted over the recent past. Average rates per square meter for residential properties in 2023 stand at €1,128 per square meter4, with Ragusa and Agrigento on the southern coast offering a going price of around €900 per square meter.

Rental rates are reported to have increased slightly over the recent past5.

WHY SICILY? The origins of the proposal stem from the current socio-economic trends which pave the way for viable investment opportunities. Numerous are those who, on account of the steep increase in property prices in Malta, seek to acquire or invest in immovable property beyond the Maltese islands. Moreover, and considering the prevailing economic lull, the neighbouring Sicilian island offers an excellent opportunity for purchase and investment.

Sited approximately seventy nautical miles due north of Malta, Sicily is served daily by both sea and air services. At present, air services include flights to Catania on the east, Palermo on the north and Trapani on the west. Sea services are dominated by a fast ferry catamaran service, the largest of which having a capacity of 900 passengers and 167 vehicles, linking Valletta, Malta and Pozzallo, Sicily with an average travel time of just over one and half hours.

Outbound passenger figures by sea for Q1 of 2023 totalled 158,180, with a total of 1,212 sailings completed by the leading ferry company Virtu Ferries in 20226.

A substantial Maltese investment into Marina di Ragusa on the south Sicilian coast is also likely to see an increased interest by Maltese yacht and boat owners on account of a near to nil capacity within Maltese territorial waters.

1 2 3 4 5 6

https://www.statista.com/statistics/1005371/tourist-arrivals-in-sicily-by-province-italy/ https://www.ig.com/sg/forex/research/breakaway-currencies/sicily-italy https://www.statista.com/statistics/778264/unemployment-rate-in-italy-by-region/ https://www.immobiliare.it/en/mercato-immobiliare/sicilia/ https://www.immobiliare.it/en/mercato-immobiliare/sicilia/ https://businessnow.mt/sea-travel-between-malta-and-sicily-tops-pre-pandemic-levels/

THE PROPOSAL The Proposal invites a number of individuals to consider pooling financial resources and personal expertise into a corporate vehicle yet to be incorporated having as its object the purchase, development, management, sale and lease of immovable property on the Sicilian Isles. The possibility of an Initial Public Offering in line with current market trends is an opportunity which is to be evaluated by the participating financeers in the short term.

In addition to the vital capital injection which serves to consolidate the proposal further, an Initial Public Offering will no doubt lend vital short term publicity to the project.

WHY HAVE I BEEN INVITED TO INVEST? You have been invited to consider this investment opportunity not only on account of your financial standing but also on account of your skill set and experience which we consider to be of added value to the venture we propose.

HOW MUCH AM I EXPECTED TO INVEST? The level of investment is a matter of choice. We initially aim to raise approximately €3,000,000 in capital providing sufficient funds for the acquisition of a tract of land or other immovables intended for the development of a number of affordable housing units or for touristic or agri-touristic purposes.

HOW MANY INVESTORS HAVE BEEN INVITED TO PARTICIPATE? Numbers have been kept to a minimum to avoid the complexity which abounds with increased investor numbers. A number of Maltese and international investors have been invited to consider this proposal.

WHO WILL MANAGE THE BUSINESS? We propose the incorporation of a special purpose vehicle to handle the proposed business. The company will be initially managed by a board of directors to be elected by the investors in conjunction with the business proposers. Principles of good corporate governance will be adopted not only to secure transparency but also to ensure that the company is well prepared for an Initial Public Offering (IPO).

WILL THE BUSINESS PROPOSERS RECEIVE REMUNERATION? The Business Proposers will be considered to form an integral part of the project and will enjoy a combined beneficial interest equal to ten percent as an introductory and business proposal remuneration and shall be retained on terms to be agreed by the investors.

WHAT WILL BE THE REVENUE STREAMS? The principal objectives will be the purchase, development, and sale or lease of immovable property, which activities will constitute the principal income stream. Nonetheless we propose to offer ancillary support services to including property management and support and lease brokerage. Revenue streams will however depend on the particular projects which the investors choose to invest in amongst those to be proposed by the Business Proposers.

WHERE DO WE INTEND TO DEVELOP? Through a number of acquaintances and business entities in Sicily we are looking for locations which are within easy reach from Porto di Pozzallo and with the ability to marry the sea and the countryside.

WHAT DEVELOPMENT IS PROPOSED? The development will depend on the development brief for the particular area and the investor’s projects of choice.

Nonetheless, we propose a nucleus of small villas ideal for family holidays which can be enjoyed by both the owners as well as tourists when made available for such purposes by the owners as well as touristic or agri-touristic projects.

WHAT TAXES ARE DUE ON PROPERTY SALES AND PURCHASES? Taxes on the acquisition of immovable property which does not constitute a primary residence is set at 9% of the cadastral value, which value is usually lower than the purchase price, whereas the rate for agricultural rate is set at 15%.

ARE THERE ANY CHARGES ON WHICH PROPERTY OWNERS ARE REQUIRED TO PAY? Immovable property is subject to the payment of an annual contribution referred to as Imposta Municipale Unica (IMU).

The taxes, calculated on rates set by the province but subject to maximum rates set out in principal legislation, are payable on both habitable properties and agricultural land. Certain categories of immovable properties are subject to rebates and exemptions, such as agricultural land in the province of Ragusa which is exempt from payment of IMU, and buildings of historical importance which are subject to the standard rates of 10.6% but subject to a 50% deduction.

HOW ARE NOTARIAL FEES QUANTIFIED? Notarial fees are set at 1.5% of the purchase price.

ARE FOREIGNERS PERMITTED TO ACQUIRE PROPERTY IN SICILY? EU citizens and corporations are entitled to acquire property in Italy without restrictions as are nationals of other countries subject to reciprocal treatment. We welcome investors from outside the territory of the European Union and strive to ensure corporate structuring to permit such.

WILL THE BUSINESS LOOK INTO EUROPEAN FUNDING? A number of activities are entitled to tap into European Funds.

Whilst thematic objectives and funding schemes change from time to time, European funds, up to a maximum of 65%, are generally made available for the restoration of historical buildings and the restoration of the rural environment, agritouristic projects and green initiatives. We will therefore be looking at ways to tap into European regional funds on a project by project basis.

IS IT SAFE TO ACQUIRE PROPERTY IN SICILY? Title to land in Sicily is based on a cadastre or land registry system. Land and title thereto is identified with reference to a plan. The conveyancing process incorporates title searches with reference to previous registrations and is concluded by registration in the name of the purchasers.

RAISING CAPITAL THROUGH AN INITIAL PUBLIC OFFERING Through your investment and expertise, we plan to establish a credible and rapidly growing business venture. As recent trends demonstrate, business strategies tend to favour an Initial Public Offering (IPO) over banking finance.

READY TO GO? If the proposal in this document is of interest to you, please signal you interest to the proposer who shared this document with you. It would be beneficial if you could indicate the value of your investment to the proposer.

In due course, and having evaluated the combined investment pool, potential investors will be invited to a meeting. During this meeting the identity of the potential investors and the proposed investment value will be disclosed to all other potential investors. Discussions are expected to ensue with regards to the corporate set up and other aspects of the proposals. In the interim, we will continue working towards understanding better the various aspects pertinent to the proposal and the proposed investment including suitable sites and projects.

Should you require additional clarifications or information regarding our proposal, do not hesitate to contact us.

Dr. Marco Ciliberti +356 9942 9574 mac@cityconsult.biz Mr .Eamon Grixti +356 9986 5771 eamongrixti@gmail.com