Corporate Due Diligence

Corporate Due Diligence

Thailand is an excellent location to establish a business due to its strategic location at the center of Southeast Asia. That is why despite the global challenges, Thailand remains one of the options for foreigners to consider their future ventures, such as working, doing business or even retire. However, there have been international scammers and syndicates that used to take advantage of foreigners; such issues may well undermine your business deals. In this diverse society, it is inevitable that at one point in our lives, we will have to negotiate or close deals with strangers.  Although in an ideal world, mere trust should be sufficient, it is difficult, if not outright dangerous, to rely solely on good faith. Whether we are hiring an employee, buying land, contracting out work or closing a contract, it is necessary to conduct our own due diligence or investigation of the person or entity that we are dealing with.

Due diligence is a precautionary measure conducted before closing a deal with another party. It can simply refer to investigation of the background of a person or company to ensure that they  are trustworthy. Thus, before buying the land, the buyer usually conducts due diligence on both  the land and the seller. When it comes to hiring employees, the employer investigates the background of the applicant.  Before signing a contract, both parties conduct due diligence on each other.

Due diligence is very important because it seeks to pacify the parties on uncertainties concerning the transaction.  It ensures that everything is correct, and that the transaction will go on smoothly and without such troubles as lawsuits filed by third parties, encumbrances or other factors which will interfere with the adherence of the parties to the contract.  In view of the numerous scams and deceits, due diligence has become commonplace in any business transaction. A due diligence report is an important legal assessment that shall be performed before you pursue purchasing a business in Thailand. This tactic will protect you from fraud and scams.

Therefore, let us define what is due diligence. It is legally a business assessment which covers thorough investigation of a business focusing on its assets and liabilities recorded from the period of setting up the company and till present. This is normally the initial step taken before contracts may be finalized and signed between the purchaser of business and its seller.

What is covered by Business Due Diligence?

Business Due Diligence contains the following steps (subject to the agreement between Juslaws and the client):

Financial status of the company, inflow and outflow of income and pending court cases.

Financial legal assessments to consider annual and quarterly statements, budgets, investments, and tax considerations.

Legal considerations including shareholders' criminal records, archive of  litigation, and any temporary restraining orders placed against the company.

Personal connections -these are considered another important matter that will come into play throughout the course of due diligence.  In some cases, a more extensive background check may be performed to provide information about an employee’s history.


Our legal and accounting team will focus the review on the following aspects:

  • Accounting policies
  • Accounting systems and controls
  • Assumptions
  • Audit Reports
  • Cash receipt, application, and management
  • Client billing systems
  • Employee expense reimbursements
  • Employee payroll
  • Financial Statements
  • Information systems
  • Internal Audit procedures
  • Inventory ordering, controls, and management
  • Key operational processes
  • Liabilities and potential / contingent liabilities
  • Tax implications of deal structures
  • Quality and sustainability of earnings and cash flow
  • Condition and value of assets