Legal service for foreign clients
Financial Due Diligence Before You Buy in Thailand
Prove real earnings and surface hidden liabilities before the final payment.
Quick answer
Deal prices usually reference earnings before interest, tax, and depreciation — but the seller's figure often folds in one-off gains and the owner's personal costs. Financial due diligence strips those back to sustainable earnings and surfaces off-balance-sheet exposure: unpaid tax, litigation, severance, and guarantees. That work is the single most common reason a price gets renegotiated.
From THB 80,000 — From THB 80,000 per deal, by target size and years reviewed · Full report within 3–6 weeks
Who this is for
- Acquirers and incoming investors
- Sellers preparing a business for sale
- Banks and lenders assessing risk
- Shareholders buying out a partner
What you receive
- A quality-of-earnings report with every adjustment itemized
- A schedule of unrecorded liabilities and commitments
- Analysis of the working capital that should transfer
- Points that belong in the share purchase agreement
Documents to prepare
- Three to five years of audited statements
- Monthly trial balances and revenue detail
- Contracts with major customers and suppliers
- Litigation, tax arrears, and guarantee records
How it works
4-step process
- 1
Scope by deal risk
Depth is spent where price impact is largest.
- 2
Analyze revenue quality
Recurring revenue is separated from one-offs and concentration is measured.
- 3
Test liabilities and commitments
Tax, severance, leases, and pending cases are reviewed.
- 4
Quantify the price impact
Each finding becomes a number usable at the negotiating table.
In depth
Financial Due Diligence Before You Buy: what foreign clients need to know
Buyers in Thailand often see audited accounts and assume that settles it. In reality, filed statements are prepared for tax and statutory purposes, not to tell a buyer which part of the profit will repeat next year. Financial due diligence exists to convert reported figures into genuinely sustainable earnings and to surface liabilities not yet on the books, before the money moves.
Normalising earnings down to what actually repeats
The first task is separating one-off items from normal trading: gains on asset sales, insurance recoveries, owner's personal costs booked to the company, and shareholder salaries above or below market. What remains is the base that should be multiplied when pricing the deal.
In Thai family businesses the commonest adjustments are cash revenue outside the system and rent paid to shareholders at off-market rates. Both move profit materially and must be documented plainly, because they become warranty terms in the share purchase agreement.
Working capital and net debt, which decide the final price
The figure agreed in the term sheet is usually enterprise value, not what the seller receives. What bridges the two is net debt and a normal working-capital level. We compute a trailing twelve-month working-capital average to set the target, then adjust the price by the variance at closing.
Buyers quietly lose money on receivables that will never be collected but still sit at full value, and on obsolete stock with no provision. We therefore age the receivables and analyse stock movement item by item, then propose adjustments that hold up in negotiation.
Liabilities that have not reached the books
The dearest risk in Thai deals is rarely a number on the face of the accounts; it is the unbooked obligation: tax open to retroactive assessment within the limitation period, under-accrued social contributions and severance, unresolved litigation, and leases or guarantees with change-of-control clauses.
When such exposure appears, the answer need not be a price cut. It can be an escrow holdback, a specific indemnity with a claim window, or a seller obligation to clear the matter before closing. We present all three with the cash-flow consequence of each.
Cost structure: government fees vs professional fees
| Item | Official fee | Professional fee | Note |
|---|---|---|---|
| Limited-scope review to screen before pricing | No government fee | THB 60,000–120,000 | Suited to deals still uncertain; supports a decision within two weeks |
| Full financial due diligence | No government fee, apart from copying charges for agency records | THB 180,000–500,000 by revenue size and number of group companies | Includes the normalised earnings report, working-capital target and risk register |
| Negotiation support and closing-date true-up | No government fee | THB 40,000–150,000 | Works alongside the legal team drafting the share purchase agreement |
A factory buyer who found accumulated severance exposure
Situation: The target had many long-serving employees but had never recognised an employee-benefit provision.
What we did: We quantified the obligation from actual service years and wage bases, then proposed an escrow holdback at the computed amount.
Outcome: The deal proceeded without the buyer carrying the full risk, and the seller accepted it because the figure was auditable.
A service business whose real profit sat below the reported figure
Situation: The seller priced the business on three years of profit that included a one-off project already completed.
What we did: We split revenue by client and contract, showing what share of the total was genuinely recurring.
Outcome: The price was reset onto repeatable earnings, with an earn-out payable if targets were met over the next two years.
When to act, and when waiting is fine
Start as soon as the term sheet is signed and data-room access is granted
At this point findings can still move the price, unlike a review after the purchase agreement, when only warranty claims remain.
Waiting is fine if no price range is agreed and you have seen no internal accounts at all
Ask for a basic information pack and run a limited review first; that is cheaper than a full engagement on a deal that may not happen.
FAQ
Frequently asked questions
How does this differ from an audit?
An audit opines on standards compliance; this answers whether the price is justified.
The seller withholds data — what then?
We use external data, state the limitation, and recommend a holdback.
Will it take so long we lose the deal?
An expedited two-week scope focused on price drivers is possible.
How is this different from an audit?
An audit opines on whether the statements comply with standards; this work answers what a buyer should pay and which risks need money held back.
How long does it take?
A limited review takes about two weeks; a full engagement four to eight, depending on how complete the seller's data is.
What if the seller withholds part of the information?
Record the scope limitation in the report and convert what could not be examined into a specific indemnity in the agreement.
Can a seller commission this too?
Yes, and it often pays: preparing the numbers before going to market protects the price and shortens the buyer's negotiation.
Related services
Business & Share Valuation
A number you can defend to buyers, sellers, banks, and the Revenue Department.
Corporate & M&A Lawyer — Due Diligence, Joint Venture
Mid- to large-cap deals under FBA, BOI, JV — structuring and protection.
Forensic Accounting & Fraud Investigation
Evidence that stands in court, not just a suspicion that money is missing.
Written by: Thai Law & Accounting Services — attorneys and licensed accountants
Reviewed by: Reviewed by a Notarial Services Attorney registered with the Lawyers Council of Thailand.
Last updated: 2026-08
Information as of August 2026. Government fees and processing times change — verify with the relevant agency before acting, or let our team verify for you.