Are you proactively planning your expansion or are you reacting to a business opportunity? If you are reacting to a business opportunity, here is what I suggest you do. Start with doing diligence on your buyer/potential agent or distributor. To me this means:
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Screening the party against the government lists for parties with whom you can’t do business;
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Provide the party with an anti-corruption questionnaire and certification; and
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Ensure the company can pay you! One cost effective way to do this is using the U.S. Commercial Service’s International Company Profile. This is a great services. The only concern is you must let the company know you are doing the investigation because company executives will be interviewed. You will get a report that includes:
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A detailed credit report on your prospective foreign partner;
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A listing of the company’s key officers and senior management;
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Banking and other financial information about the company;
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Market information, including sales and profit figures, and potential liabilities;
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An opinion as to the reliability of the overseas partner; and
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An opinion on the relative strength of that company’s industry sector in your target market.
The cost is lowered to $350 for new exporters using the service for the first time. The regular price ranges from $600-$900 depending on the size of the foreign company and takes about 20 business days to complete.
Then you are ready for a draft contract or more diligence on the party if the first round of vetting resulted in significant red flags.
Good luck, and feel free contact me if you need assistance navigating the process.
