Due diligence services in Dubai UAE, KSA
Due diligence is the comprehensive investigation and analysis undertaken before making major business decisions like investments, mergers, acquisitions, or entering new markets. In major financial centers like Dubai and Saudi Arabia, there is significant demand for professional due diligence services from various firms.
The key providers of due diligence services in these regions include:
– Big Four accounting firms like Deloitte, PwC, EY, KPMG
– International and local law firms
– Management and risk consulting companies
– Corporate investigation specialists
These firms offer services spanning financial due diligence, legal due diligence, operational and commercial analysis, compliance checks, and more. Their role is to thoroughly vet potential deals, partnerships, investments etc. to identify risks, issues and opportunities.
Given Dubai and Saudi Arabia’s positions as regional business hubs, due diligence is crucial for local firms as well as international companies looking to invest or operate in these markets. Experienced providers ensure decisions are well-informed and legally compliant.
The due diligence industry in the GCC has grown in scope and sophistication in recent years to meet rising cross-border business activity in the region. Leading firms have dedicated due diligence practices serving Dubai, Saudi and other Gulf markets.
In Dubai, UAE, and Saudi Arabia, due diligence services are typically provided by various types of firms, including:
1. Accounting and auditing firms:
Accounting and auditing firms play a major role in providing due diligence services in Dubai, UAE and Saudi Arabia. Here are some key points about their services:
- Big Four Firms
– Deloitte, PwC, EY, KPMG have a strong presence and dedicated due diligence practices in both markets.
– They offer end-to-end financial, tax and accounting due diligence leveraging their audit expertise.
– Services include reviewing historical financials, forecasts, working capital, tax structuring, accounting policies and more.
– They provide financial modeling, valuations and deal structuring support.
– Global network allows cross-border due diligence for international transactions.
- Regional/Local Firms
– Many established local and regional accounting firms like BDO, Aviaan Accounting, Grant Thornton, Crowe, RSM provide due diligence.
– Deep knowledge of local regulations, business practices and cultural nuances.
– Specializations like Sharia-compliant advisory for Islamic finance transactions.
– Relatively more cost-effective compared to Big 4 for smaller engagements.
– Focused expertise in sectors like real estate, trading, family businesses.
- Their Due Diligence Process
– Extensive review of target’s financial data, reporting systems and controls.
– Analyze balance sheets, cash flows, accounting estimates and provisions.
– Tax due diligence – compliance, structures, potential exposures.
– Identify financial risks, contingencies and key business drivers.
– Provide independent valuation analysis and deal structuring recommendations.
2. Law firms:
Law firms play a crucial role in providing legal due diligence services in Dubai, UAE and Saudi Arabia. Here are some key points about their services:
- International Law Firms
– Major global law firms like Baker McKenzie, DLA Piper, Clifford Chance have a strong presence in the region.
– Leverage their international expertise and resources for cross-border transactions.
– Provide comprehensive legal due diligence covering all aspects – corporate, regulatory, litigation, IP, labor laws etc.
– Assist with structuring, negotiating and drafting deal documentation.
– Expertise in sectors like energy, infrastructure, finance attractive for investments.
- Regional/Local Law Firms
– Established local firms like Al Tamimi & Co., Abdulaziz AlGasim, Zu’bi & Partners have deep Middle East/GCC experience.
– Thorough understanding of domestic laws, free zone regulations, Sharia compliance.
– Specializations in areas like real estate, family businesses, startups.
– Provide efficient legal support tailored to regional business practices.
– Relatively more cost-effective for smaller transactions.
- Scope of Legal Due Diligence
– Review company documentation, licenses, shareholding structures.
– Analyze contractual obligations, risks and termination clauses.
– Assess compliance with local/federal corporate laws and industry regulations.
– Check for any pending litigation, disputes or legal contingencies.
– Examine intellectual property rights – trademarks, patents etc.
– Ensure validity of property titles, mortgages and leases.
– Analyze labor contracts, employee matters and immigration issues.
3. Consulting firms:
Here are some key points about the role of consulting firms in providing due diligence services in Dubai, UAE and Saudi Arabia:
- Management Consulting Firms:
– Major global firms like McKinsey, BCG, Bain and regional players like Strategy& have dedicated due diligence practices.
– They provide commercial/market due diligence by analyzing industry landscape, competitors, market trends and growth potential.
– Their services include evaluating operational capabilities like processes, technology, supply chain management and organizational capabilities.
– They offer strategic advice on synergy assessment, merger integration planning, and value creation roadmaps.
– These firms leverage their sector expertise in areas like oil & gas, banking, telecoms which are major industries in the Gulf region.
- Specialized Due Diligence Consulting Firms:
– Firms like Kroll, Control Risks, Berkeley Research Group specialize in risk advisory and due diligence services.
– They conduct in-depth investigations and background checks on parties involved like owners, management, political connections.
– Their services include due diligence on cybersecurity, data privacy, IT systems and technological capabilities.
– They assess regulatory compliance, anti-bribery, anti-money laundering and sanctions exposure risks.
– With global presence, they provide local as well as cross-border due diligence support.
- The Role of Consulting Firms:
– Analyze market entry risks, competitive dynamics and potential revenue upsides.
– Review operational strengths, weaknesses, integration challenges and cultural fit issues.
– Evaluate corporate governance, internal controls and quality of management information systems.
– Check for any fraud, unethical practices, reputational or political risks involved.
– Provide an independent third-party perspective on the deal rationale and value creation opportunities.
4. Corporate investigation firms:
Corporate investigation firms play a specialized role in providing due diligence services in Dubai, UAE and Saudi Arabia. Here are some key points about their services:
- Background and Scope:
– These firms conduct in-depth investigations and background checks on companies, individuals, assets, and business dealings.
– Their expertise lies in uncovering potential risks, fraud, unethical practices, and reputational issues.
– Services include due diligence on parties involved in transactions like owners, management, investors, and political connections.
– They also investigate corporate intelligence, asset tracing, and crisis management.
- Major Corporate Investigation Firms:
– Global players like Kroll, Control Risks, Nardello & Co., and FTI Consulting have a presence in the region.
– Local firms like Accuratus Lab, Athena Intelligence, and The GPS Group also provide corporate investigations.
- Services Offered:
– Enhanced Due Diligence (EDD): Conducting deep-dive background checks beyond basic compliance checks.
– Integrity Due Diligence: Investigating ethical standards, fraud, bribery, and corruption risks.
– Asset Tracing: Identifying and tracking the ownership and movement of assets worldwide.
– Litigation Support: Gathering evidence, forensic accounting, and expert witness services for legal disputes.
– Crisis Management: Responding to corporate crises, cyber incidents, and reputational threats.
- Importance in Due Diligence:
– Vital for high-risk transactions, investments in emerging markets, and dealings with unfamiliar parties.
– Help uncover potential legal, regulatory, financial, and reputational risks.
– Provide an independent and objective assessment of parties involved.
– Crucial for compliance with anti-money laundering, anti-bribery, and sanctions regulations..
The scope of due diligence services can vary depending on the nature of the transaction or business activity, but commonly includes:
– Financial due diligence: Analyzing financial statements, tax records, and accounting practices.
– Legal due diligence: Reviewing contracts, licenses, intellectual property rights, and compliance with laws and regulations.
– Operational due diligence: Assessing operational processes, supply chain, IT systems, and management capabilities.
– Commercial due diligence: Evaluating market conditions, competitive landscape, and growth potential.
– Compliance due diligence: Ensuring adherence to anti-money laundering, anti-bribery, and other regulatory requirements.
Frequently Asked Questions
Here are some frequently asked questions about due diligence services in Dubai, UAE and Saudi Arabia:
Q. What are the main reasons for conducting due diligence?
A. The primary reasons include mitigating risks in M&A transactions, investments, joint ventures, assessing regulatory compliance, and evaluating new market entry opportunities.
Q. What types of firms provide due diligence services?
A. The major providers are accounting/auditing firms, law firms, consulting firms specializing in commercial/operational due diligence, and corporate investigation firms.
Q. What is the scope of financial due diligence?
A. It involves reviewing financial statements, forecasts, tax positions, accounting policies, working capital, assets/liabilities, and providing valuations and deal structuring advice.
Q. What does legal due diligence cover?
A. It covers reviewing corporate records, contracts, licenses, intellectual property, litigation exposures, regulatory compliance, property titles, labor laws adherence.
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