Due diligence is an important part of any business transaction, including mergers, acquisitions, and partnerships. However, conducting due diligence in Thailand can be challenging due to a variety of factors. In this blog, we will explore some of the difficulties that investigators may face when preparing due diligence in Thailand.
Language Barrier
As mentioned in our previous blog, the language barrier can be a significant challenge when conducting investigations in Thailand. This is especially true when preparing due diligence reports, as investigators may need to communicate with Thai-speaking individuals to gather information about a company’s operations, financials, and legal status.
To overcome this challenge, investigators can hire a translator or interpreter, use technology to translate, or work with local investigators who are fluent in Thai.
Lack of Publicly Available Information
Another challenge that investigators may face when preparing due diligence in Thailand is the lack of publicly available information. Unlike in many Western countries, Thailand does not have a central database that contains information about companies’ financials and legal status.
This means that investigators may need to rely on other sources, such as interviews with company executives, to gather information about a company’s financials and operations.
Complex Corporate Structures
Corporate structures in Thailand can be complex, with many companies having multiple layers of ownership and subsidiaries. This can make it difficult for investigators to identify the ultimate owner of a company and understand the relationships between different entities.
To overcome this challenge, investigators can use a variety of tools, such as corporate registries and financial statements, to map out a company’s corporate structure and identify any potential red flags.
Cultural Differences
Cultural differences can also pose a challenge when preparing due diligence in Thailand. Thai culture places a high value on relationships, and business is often conducted through personal connections and informal networks.
This can make it difficult for investigators to identify any potential conflicts of interest or unethical behavior. Additionally, cultural differences may also impact the way that financial information is presented, making it difficult for investigators to understand the true financial health of a company.
To overcome this challenge, investigators should work with local investigators who have a deep understanding of Thai culture and business practices. Local investigators can provide valuable insights into local customs and help investigators navigate any cultural differences that may arise during the due diligence process.
Conclusion
In conclusion, preparing due diligence in Thailand can be challenging due to a variety of factors, including the language barrier, lack of publicly available information, complex corporate structures, and cultural differences.
To overcome these challenges, investigators can hire a translator or interpreter, use technology to translate, work with local investigators, use a variety of tools to map out a company’s corporate structure, and take cultural differences into account.
By understanding these challenges and taking the necessary steps to overcome them, investigators can conduct successful due diligence in Thailand and ensure that their clients are making informed business decisions.