International Due Diligence: Key for Doing Business Abroad

One of the benefits brought about by the internet era is the opportunity to grow a business, big or small, into the global market. Today a company in New York or an individual in London can access the international marketplace, and start partnerships with a company in Dubai or Singapore, or find suppliers in Mumbai or Beijing. The playing field is now flat, and the world (overpopulated and full of concrete) is now global. Reaching across borders increases opportunities, and creates more options for profitability. But, where there are internet relationships, there is risk. High risk, in fact. How do you know if the company you are about to start a partnership with is legitimate, well-established and honest? How can you be sure if the organization has any criminal history or fraud activity, especially if the country you're dealing with is in another country? In China or India or Brazil, language and cultural barriers can be major obstacles, and make international due diligence and verification a difficult process. In most cases, lawyers and law enforcement officials recommend contacting a professional international investigation firm for assistance.

In today's globalized world, it's vital to answer as many questions as possible, and to verify as many facts as possible, prior to submitting any payment or signing any contracts involving international business. The risk for fraud and scams is simply too great. If there are too many unknowns, there are likely additional hidden truths that you haven't even considered. This is the nature of business and individuals to present themselves or their business in the best light. To make an informed decision, you'll need to know not only the good points, but also the potential pitfalls and risk related to forming a business relationship. You'll need the dirt, if there is any. After all, being informed will allow you to make important decisions that will keep your company profitable for the long term. Ignoring the risks, on the other hand, can lead to victimization of fraud or scam, and even bankruptcy. Unknowingly getting involved with a criminal or an organization guilty of criminal acts can lead to serious complications down the road, and screening for such risks is of utmost importance. Prudent business persons hire a reputable international private investigator to conduct due diligence to avoid significant harm or damage to their own company, personal reputation or property, and minimize the risks involved in financial transactions, company acquisitions and mergers.

Expanding businesses should consider not only the possible profits and opportunities, but also the possible red flags, and the possibility that, what if, for example, the company is not who it claims to be? What if the business contact or supplier is not who they claim to be? How do I know if my company makes payment, they will truly deliver the product? These are serious questions, and they need to be answered. Conduct due diligence to verify prospects' financial and business operations, employee count, confirm physical and financial assets, business filing and registration, reputation, and major shareholders. Has there been any history of lawsuits? Have there been any accusations of fraud or criminal activity? In a domestic relationship, such business questions can usually be carried out in-house by a company's legal department. However, international business, and international due diligence requires having a team of professionals on the ground to verify facts, gather important information on the company, and screen for fraud or scam.

Whether you're in New York or Singapore, Manila or Sao Paulo, London or Paris, and you're considering a relationship or merger or supplier or investment in another country, do your due diligence and be informed. For proper verification, it's important to work with a reputable firm that has international offices or field investigators in the countries where you need them, who can work through the language and cultural barrier, and have professionals on the ground verifying information and discreetly gathering facts. Getting a due diligence or international background check is sort of like insurance, and it's good to be covered.

Best of luck,

A Hathaway
© 2011 A. Hathaway