Why Due Diligence?
As the world's most favorite country for
direct foreign investment, China offers the most attractive
opportunities for all investors to this ancient land with the largest
potential market and fast growing economy ever. China is now named “The factory of the world”
with its high
quality products, huge production capacity and low labor cost.
Most of the world famous brands had expanded their production base in China,
and how about you? Do not miss this good opportunity.
How to do
business in China? What are obstacles in front of you? What are the
major challenges you will face while doing business in China? What do
you know about your partner?
It is obvious
that a good partner can help you a lot: spending money economically,
choosing the right step to move forward, and dealing with suitable people who
understand you well. How to identify a good partner? The lack of
transparency in Chinese accounting, financial, business practices,
credit reputation and Chinese way of thinking make China a difficult market for any foreign investors even they had
done business in China for years.
Before you
contemplating a new partnership, joint venture, merger, or corporate
restructuring with your potential partner, a timely and accurate Due
Diligence or careful study of your target company or key individuals is not an
option, it is a must.
Due Diligence
will help you make the right strategic decision. When we finish our
professional and discreet due diligence investigation, you will have a
full picture of the target company or key persons you are interested in
and a good knowledge of:
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The ownership and management structure of target companies
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Historical events of your target,
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Where your target’s profit comes from,
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The way the key persons
think and behave
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Assets owned by target company,
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How to minimizing the potential risks during the cooperation,
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True story on what is going on behind
the scene
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1)An
American company
set up a joint venture with its Chinese partner 4 years ago,
and the American company considered making additional investment as per request of
its Chinese partner. Through years’ cooperation, the American
company has some concerns over their Chinese partner such as:
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How could a company owns an
infrastructure in land, building, and capital 10 times more than its sales revenue?
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How
the company makes its profit ?
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Is there any corruption there?
RBI investor paid a visit and found out more questions
regarding the target company.
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The owner of
the Chinese company in fact owns more than 9 companies in that city and
almost all companies are in the same industry. But he claimed to their American
partner in the past that he owned only one. Why he set up so many
companies in almost the same industry during almost the same period?
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According to bank information,
the target company does not owe much loan to the bank, but how
can its assets be ten times more than its sales revenue. Why?
With discreet interviews with related people and
extensive connection with local government, bureaus, courts, the experienced consultant
of RBI
drew a full picture for our American client one month later.
The Chinese company are raising their capitals by
transferring money internally among those related companies, and that is
why he established so many companies in the same area. RBI wrote the story
about how the Chinese company is managed, and answered all the questions
American client had listed. The American client appreciated the good
approach of RBI in this case. Moreover, RBI financial expert provided
financial suggestion to our client on the additional investment as well.
2)
An US venture capital firm planed to hire a senior staff for their Asset Purchasing Business
in China. As it is a serious decision for the company, they wanted to do a
Due Diligence investigation on the target candidate before the board
meeting. But there were 2 days left only. Could RBI finish the job
within such an urgent time frame? RBI could only get the name and ID
number of the candidate from the client. Could RBI meet the client’s
request with so little information? The answer is YES. RBI senior
consultant made full use of the limited information in hand, and found
out all the contact information related to the target candidate in one
day, then arranged a friendly and discreet interview with the target
candidate the following
day and sent out an excellent report before dark.
Contact us
info@rbduediligence.com
You will enjoy our timely, professional
and valuable report.
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