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       Due Diligence

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:

  • The ownership and management structure of target companies

  • Historical events of your target,

  • Where your target’s profit comes from,

  • The way the key persons  think and behave

  • Assets owned by target company,

  • How to minimizing the potential risks during the cooperation,

  • True story on what is going on behind the scene

    

 

Case Studies

 

 

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:

  • How could a company owns an infrastructure in land, building, and capital 10 times more than its sales revenue?

  • How the company makes its profit ?

  • Is there any corruption there?

 RBI investor paid a visit and found out more questions regarding the target company.

  • 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?

  • 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. 

 

Give us a call

You will enjoy our timely, professional and valuable report. 

 

 


5489,XiYuan FanDian,No.1 SanLiHe

Road,HaiDian District, Beijing 100044, China

Tel:8610-6833-5846 Fax:8610-6833-5849

info@rbduediligence.com