A company due diligence in Montenegro is the evaluation of a business from several points of view. Prior to committing in a commercial relationship with a Montenegrin company, an entrepreneur has to collect information on it and analyze the financial risks of doing business with each other. Our company formation consultants in Montenegro can assist you in verifying a business by effectuating a local company due diligence.
Table of Contents
Due diligence procedure in Montenegro
The due diligence of a company implies several checks, among which our Montenegro company formation consultants recommend:
• Analyzing the capitalization (total value) of the business: it basically consists of establishing how large a company is. The market capitalization of the company is important especially when effectuating a stock due diligence, as it predicts how volatile it is likely to be.
• Revenue, income and margin trends: comprehending the gross revenues of a company, its profit margins and return on equity and if it is developing or lowering is essential in any investment in corporate bonds or equities.
• Checking the competitors and industries: each business is partly defined by its competitors. Our company registration agents in Montenegro compare two or three competitors. This helps us establish how vast the end markets for the company products is.
• Valuation multiples: it is when we analyze the P/E (price-per-earnings) ratio, price/earnings to growth (PEGs) ratio, price-to-sales (P/S) ratio, and similar aspects of the company.
• Other steps: we can provide further details on what these other steps are. We can also help you open a company in Montenegro.
Buying an existing company from Montenegro might imply to start a due diligence procedure in order to secure the expansion of the business. Find more information and support from our specialists in company registration in Montenegro if you need due diligence services before purchasing a company or creating a fusion with a Montenegrin business.
Due diligence checks in Montenegro
At the present moment, the challenging business environment requires the performance of a thorough due diligence when ensuring the success of a possible business transaction, be it an acquisition, a contract with a new supplier or concluding an alliance with another business.
The due diligence reportsin Montenegro usually include:
• Connection reports: these are researches on a company and its directors in order to fidentify any discrepancies;
• Director reports: they view the current and former directors of a company;
• Credit profile and risk reports: these involve a check of the credit situation and the payment profile of a business along with the company’s relation with the Montenegro banks.
• Negative announcements in the international press: these are strongly related to the public image of the company.
• Qualifications that the employees have: this check shows if the professional team of the company is suitable for merging and future development aspects.
• Results and balance sheets of the company: an important check to verify the company’s vision and desire to expand or develop.
• Quality control: an important step for a possible merging of two companies is to check if both have the same perception regarding the quality of the services that they provide.
Find support from our specialized team if you are looking to start a due diligence procedure.
Why choose due diligence in Montenegro?
Due diligence in Montenegro implies using an efficient examination instrument which helps companies to protect their interests and keep the negative risks away. There are 4 main ways that companies can be helped through due diligence:
- Protection from reputational harm: creating connections with companies that are linked to ethical, legal or financial risks might damage the reputation for your own company.
- Protection from damaging financial consequences: companies that do not have integrity when it comes to their financial responsibilities can lead to potential debt for your company due to penalties or other legal consequences.
- Prevent corruption through the legally required steps: when cooperating with other companies, it is essential to consider their approach regarding legislation, tax regulations and preventing corruption.
- Considering economic reasons when merging with another company or partner: due diligence check tool allows companies to verify the professional quality of a potential partner and whether this would represent the right commitment for the company or not.
Who manages due diligence checks?
There are various companies and professionals who can conduct due diligence reports in Montenegro, such as:
- lawyers;
- firms responsible for equity research;
- fund managers;
- individual investors;
- risk analysts;
- broker-dealers.
In this matter, any company which chooses to engage in a merging process or to invest for another company or individual can conduct a due diligence check in order to protect its values. Due diligence in Montenegro is required, in this case, for any business partner, vendor, buyer or seller who takes part in the development process of your company. Find support from our team of company formation consultants in Montenegro for a complete due diligence procedure.
Our specialized agents in company formation in Montenegro are operating this kind of examinations and can offer relevant support for business persons interested in conducting a detailed due diligence check.
Businesses statistics in Montenegro
Considering that Montenegro is a small-sized country in Europe, official data shows that, in the previous years, there has been an increase regarding company formation in Montenegro and the business sector in general:
- In 2022, gross domestic product in Montenegro worth 6.23 billion US$.
- In 2023, gross domestic product, also known as GDP, worth 7.40 billion US$ in Montenegro. The growth of GDP compared to 2022 shows an economic development of this country.
- GDP value of Montenegro represents 0.1% of the entire world economy.
If you have more questions about the company due diligence services we provide in Montenegro, or for help to open a Montenegro company, please contact us.