What to consider when conducting due diligence in emerging markets

January 22, 2019

By Sanday Chongo Kabange, The Red Flag Group®

Emerging markets are highly desirable growth markets for many corporations, but they are also extremely risky. Thus, conducting due diligence in these markets requires a great deal of know-how, experience, technology and expertise to execute effectively.

There tons of boutique due diligence providers in the market today claiming that they can help you to conduct proper due diligence in risky markets. But what they don’t tell you is that conducting thorough due diligence in emerging markets isn’t an easy undertaking for numerous non-commercial reasons including but to limited to:

  • difficulties to access official data and information
  • difficulties to find and maintain reliable network of local resources
  • different legal, financial, regulatory and accounting systems
  • cultural and language barriers
  • unstable political, social and economic environments
  • market uncertainties
  • local practices that don’t conform to international or western systems

Therefore, the next time your due diligence provider, tells you that they can help you to conduct due diligence in emerging markets, request them to provide you with a practical outline of how they navigate through these factors to ensure that you obtain enriched data and intel to make informed decisions, whether you are exploring new markets or simply embarking on a merger or an acquisition.

For 13 years, we built practical expertise in over 80 jurisdictions considered high risk, where we have helped and continue to help clients to obtain the necessary business intelligence and data they need to meet their due diligence obligations.

As you contemplate venturing into emerging markets, here are some takeaways:

  • ensure that your due diligence in emerging markets is thorough, complete and enhanced
  • ensure that the data and business intelligence you get is enough and reliable to make million-dollar decisions
  • ensure that your due diligence provider fully understands the local laws, regulations, culture, inherent risks and language in emerging markets
  • ensure that your due diligence provider has reliable expertise, experience and know-how to undertake a deep dive due diligence in complex landscapes
  • ensure that the due diligence properly matches the risks presented by the target

Call us now on +1 480 825 7787 or email info@redflaggroup.com to learn more about our due diligence footprint and capabilities in emerging markets.

 

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