In the globalize and informational business activities, the relevant persons or agents will entrust a specialized dedicated agents to issue a report on due diligence through investigating the other company’s background, historical data, documents, actual value of the project, market potential risk, management risk, technologic risk and capital risk with detailed survey and verify in order to understand and grasp the business information or the related situation of the counterparty.
Due diligence is research into and examination of the background and financial condition, business operations and contractual obligations of a person or enterprise, which could include commerce, legal, financiance, accounting; operation; IT; valuation services; tax and credit. Due diligence could be public and non-public.
Due diligence could be divided into bank due diligence, enterprises due diligence, government due diligence according to different agents. For instance,G20 advocates Common Reporting Standard (CRS) (The Standard for Automatic Exchange of Financial Account Information, developed by the OECD with G20 countries, represents the international consensus on automatic exchange of financial account information for tax purposes, on a reciprocal basis.). financing institution will recognize the status of personal bank account and company bank account in other countries through due diligence.
I. The Classification of Due Diligence
1. Commercial due diligence: commercial information. the implements of contract’s terms, mainstream corporate property, practical office, the value of stock right transfer;
2. Legal due diligence: A civil and criminal action, The degree of environmental damage or property damage;
3. Financial due diligence: financial policy analysis, overseas finance and tax, payment ability ,enterprise breakeven point, financial authenticity;
4. Tax due diligence: company tax, personal tax analysis, personal tax declaration, CRS report, personal tax investigation of CRS;
5. Credit due diligence: personal credit, personal payment ability, the background of shareholders or directors;
6. Property due diligence: The property investigation, bankrupt investigation, car investigation, listed company share, tax-related bank account;
7. Personal background due diligence: Personal resume, Personal working experience, Family situation, Personal equity and Creditor's survey;
8. Marketing due diligence report: due diligence of company reputation, brand recognition, customers’ satisfaction, industries’ cycle;
9. Due diligence can be divided into public and non-public, onshore and offshore etc.
II. The Function and Significance of Due Diligence
1. Reduce the risk rate: if there is large capital to be invested, due diligence could assist the investors to make a wisdom choice, and save a lot of money through a small fee for business preparation;
2. Hold market trend promptly, Benefit for marketing strategy;
3. Know others’ idea, Benefit for negotiation;
4. TANNET, is particularly good at offshore due diligence, especially investment evaluation of offshore project, with sufficient successful cases.
III. The Required Documents for Due diligence
1. ID copy of the applicant and the related documents from the authorized agent;
2. The applicant need provide the bidding, path and purposes for investigation;
3. The applicant should provide all clues of objector or companies including materials, words, pictures, records, information, related texts and contact details in order to follow up.
IX. The Ways and Charges for Due Diligence
1. Due diligence could be public or confidential. Currently, due diligence of TANNET is combined with public and non-public way;
2. The charges for due diligence depend on different ways. There are three levels of due diligence in TANNET: Simple survey, quotation range is from RMB 5000 to RMB 50000; Due diligence: quotation range is from RMB 50000to RMB 500000; Special due diligence: quotation range is RMB 500000 or more;
3. Quotation is based on the range, content, difficult level, time, route, workload of investigation and the value;
4. Object or person could be investigated. Due diligence in TANNET could analyze its characteristics.
X. The Professional Agent and Guidelines of Due Diligence
1. Due diligence should be done by professional agent according to the general and professional guidelines;
2. TANNET is staffed with professional lawyers, accountants, evaluators and professional investigators who will follow the professional guidelines to do due diligence;
3. Insist on the principle of confidentiality during the whole processing of due diligence;
4. The object should be accurate. All documents and data should be veritable and correct;
5. The biding should be in the reasonable and legal condition during due diligence, not refer to private regulations and related laws from local;
6. Involve some matters that are over TANNET’s ability, we will assign the third part to continue the related work.
XI. The Service Process of Due Diligence
The Service Process of TANNET Due Diligence : Sign confidential agreements=》 Submit the required bidding documents for surveying =》Negotiate and Confirm the bidding ,mode and content=》 Fill in and sign the application form =》In the process of investigation=》Collect materials and Edit the report of due diligence=》 Submit the report.
Contact Us
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.
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