Achieve financial due diligence through investigations that ensure that the target company or investment is financially sound and that all material risks have been identified.
Financial due diligence has become a common standard for almost any kind of investment or business dealing such as mergers and acquisitions (M&A), issuing new stocks, and any other transaction that includes risk and involves the care that a reasonable entity should take before entering into an agreement. Every investment has its own level of risk, and without good research, the investor may be unable to understand that risk correctly.
A systematic process helps to ensure that buyers and others are on the same page at the time of a purchase. This method helps to prevent any entity from unnecessary harm to either party throughout a transaction. Evaluating risk accurately and acquiring the important and correct information needed to analyse another entity is the goal of financial due diligence.
We conduct all the necessary investigations to make sure any risks associted with your target company of investment have been identified.
Our experienced team ensures a clear and effective communication process to ensure that buyers and others are on the same page at the time of a purchase.
Acclime uses its global expertise to make sure all your international compliance and governance needs are protected moving forward.
Due diligence confirms that all entities are safe through the following essential considerations:
Mergers & acquisitions deals may take the form of either;
This would depend on many factors. For example, if a foreign investor already has a reliable business associate in China, the foreign investor may wish to consider entering into a merger with the existing entity. The advantages of a merger with a local counterpart are, among others, ready local knowledge and channels to penetrate the local market and the comfort of having one less competitor in the market while the existing business continues.
In some instances, the foreign investor may worry about the hidden liabilities in the target company. Under these circumstances, the foreign investor may be reluctant to enter into a merger with the target company but wish to purchase only the assets of the target company. Therefore, the foreign investor may form a separate entity and thereafter acquire the assets of the local company through the newly formed entity. An asset deal enables the foreign investor to acquire only the viable assets without having to take over the accumulated debts and liabilities of the local entity.
According to the Notice of the Ministry of Finance and the State Administration of Taxation on Enterprise Income Tax Treatment of Enterprise Reorganisation Caishui  No.59, as a general proposition, the relevant tax treatments of merger are as follows:
We are open Monday – Friday
9:30 am – 7 pm (UTC+8)