Are you planning on selling your business to overseas investors?

Purchasing a company is a risky investment anywhere in the world, but more so when you are an overseas investor looking to buy a business in Western Australia. Business risks are greater for overseas investors thinking of buying a business or a property in the area because they suffer the burden of greater due diligence. Before the sale of a business, its proprietors are responsible for it. Once a legally binding contract is signed, however, those responsibilities fall onto the new owner or investor. This is the reason why investors should ensure they follow each of the steps outlined below before deciding to purchase a business in Western Australia.

Contact Relevant Government Overseas Offices

When considering the purchase of a business in Western Australia, a smart investor will first ensure the legitimacy of the said enterprise. Contacting a local authority is the fastest way to expose yourself to the types of businesses available for sale in the area. State and territory governments will provide you with information as to which firms currently on sale match your interests. Matching Australian businesses with the right investors promote development in the country, so the options they will present you with will be the best. Learning more about the companies on offer will be up to you once you have your range of options.

One body you will need to contact if you are sure you want to move forward with a deal will be the Foreign Investment Review Board. The FIRB in conjunction with the Treasury determines whether your proposal is acceptable to the government.

Get a Business Valuation

A business valuation should be crucial to your decision to buy or pass up on an investment opportunity. Sure, most people who want to sell their companies given insight as to the health of the company, but it is a business valuation that will let you know whether the company is a good choice for an investment. After identifying the company you want to get into business with, broach the subject of a valuation. Contract an independent valuation company to conduct the procedure. If the results are positive, move on to the third step in this process. Consider moving on to another opportunity if the finances of the company you are considering are negative or suspicious.

Assess the Feasibility of the Business

A solid balanced balance sheet is the only thing that determines how successful a company will be in the future. As an overseas investor, take time to learn the business and determine its viability in the future. During this stage you will need to evaluate the business thoroughly, checking everything from its reputation among Western Australian consumers to its employee culture and potential for expansion or longevity. Only when you are satisfied that a business will bring in suitable returns on investment should you have a principal agreement. After double-checking your facts and figures and ironing out details such as the price, proceed to sign a binding agreement.

 

Mathieu Paul
Director – Business Improvement
P: +618 6315 2700
E: enquiries@wabusinessvaluations.com.au

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The material and contents provided in this publication are informative in nature only.  It is not intended to be advice and you should not act specifically on the basis of this information alone.  If expert assistance is required, professional advice should be obtained.

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