Diligence · 02 Editorial guide
China M&A Due Diligence for Foreign Buyers
Diligence is a scoped review, not a dump of every company file. Work from the thesis and the structure already chosen.
First job Define the diligence scope around the deal thesis and known risk areas.
Start here
Key considerations
The first questions are about urgency, governance and preservation — before collection expands or interviews begin.
- What could kill or reprice the deal?
- Which workstreams are in and out of scope?
- What is already known from public or seller data?
Direct answer
What this page decides
02
This page owns the diligence file for MA02: what to open, in what order, and which findings change structure, price, CPs or walk. China diligence is not a US data-room clone — chops, SAMR filings, fapiao, social insurance, and WeChat-era contracts matter. Safe-room and state-secrets / data-export limits can constrain what leaves China (FDI protocol). Investigations findings (bribery, fraud) route to the Investigations hub; they still belong in the deal memo.
At a glance
Which fact changes the next route
Use the fact that changes ownership or urgency to decide the next move.
| Question | Why it matters | Next route |
|---|---|---|
| Share deal? | Company-wide liabilities. | Corporate, tax, employment, litigation, compliance. |
| Asset deal? | Title and transferability. | Each asset’s licence and encumbrance. |
| Data-heavy target? | PIPL and possible NSR. | Data hub + Approvals. |
| Need WeChat or personal devices? | PIPL/employment. | Investigations evidence map — not a fishing dump. |
Scope
What this page owns — and what it does not
Practical workflow
Action, evidence, legal gate, output
| Action | Documents / evidence | Legal gate | Output |
|---|---|---|---|
| Scope to the thesis and structure | Structure memo | Do not boil the ocean | DD request list |
| Set access protocol | NDA, clean team if antitrust | Gun-jumping / data export | Room rules |
| Workstreams | Corporate, employment, IP, tax, compliance, real property | Local filings vs brochure | Findings log |
| Convert findings | Red flags | Price, CP, indemnity, walk, or restructure | Issues list |
Documents
What to gather before the next call
These items help clarify the file; they are not a legal requirement list.
| Item | Why needed | Who holds it | Risk if missing |
|---|---|---|---|
| SAMR / AMR file and articles | Existence and capital | Target | Unpaid capital / scope mismatch |
| Chop and bank-account control | Who can bind | Target | Shadow control |
| Employment and SI | Hidden N | HR | Collective claims |
| Material contracts and chops | Change of control | Legal | Unenforceable WeChat deals |
Common failure points
Where files usually break
English management presentation as the corporate file.
Ignoring related-party loops.
Exporting HR data to a global VDR without a transfer analysis.
No anti-bribery workstream in a distributor-heavy target.
FAQ
Narrow follow-ups owned by this page
Can we copy the US due-diligence list?
Use it as a prompt, not a map. Chops, fapiao, SI and SAMR are China-specific.
Decision map
Keep the question bounded.
- Lock the thesisWhy this target, and which risks matter.
- Set workstreamsCorporate, contracts, employment, IP, regulatory, disputes.
- Feed the document setFindings become conditions, disclosure or walk-away.
Quick answers
Need the short version? Start with one narrow question.
These explainers answer one question. They do not replace this topic route or a deep guide.
Curated resources
Open the asset that matches this job.
Helpful to prepare
Facts that make the next conversation clearer.
These items are orientation aids, not a legal requirement list.
Counsel hand-off
What to bring when you instruct
Instruct M&A counsel with specialist streams as flagged. Bring: structure memo, VDR index, and the three findings that already scare the IC.
Local context
Add local registration only when it changes the filing.
AMR, SAMR and sector authorities can differ in practice after the national gate is identified.
Open city and province guidesCounsel hand-off
Need transaction counsel?
This hub organises deal stages and gates. It does not decide structure, clearance or closing on your facts.
Find M&A counselLegal review
Who reviewed this guide
Need qualified counsel?
Move carefully. Move with a record.
Use the portal to identify counsel for this practice and related China-side issues.