Before signing an MOU or cooperation agreement with a foreign company, the single most important step is verification. A well-presented counterpart with official-looking documents is not the same as a credible, financially stable, and operationally active one.
This guide explains what to check, where to check it, and what red flags to look for when entering a new international trade partnership.
Why Due Diligence Matters in International Trade
The pressure to move quickly on a promising partnership is real. But skipping verification creates legal, financial, and reputational exposure that can far outlast the opportunity.
A legalization stamp from a foreign ministry — a common document shared during MOU negotiations — confirms only the authenticity of the signature on the document, not the accuracy of its contents. This is explicitly stated on Belgian Foreign Affairs legalization certificates, for example, and the same principle applies across jurisdictions. Official-looking does not mean verified.
Due diligence is the process of independently confirming what a counterpart claims about itself before you commit.
1Check the Official Business Registry
The first and most important step is always the official company registry of the counterpart's country. These are public databases that confirm whether a company legally exists, is currently active, and who holds management authority.
| Country | Registry |
|---|---|
| Belgium | Banque-Carrefour des Entreprises (BCE/KBO) |
| Netherlands | Kamer van Koophandel (KVK) |
| Germany | Handelsregister |
| France | Infogreffe / Registre du Commerce |
| United Kingdom | Companies House |
A registration number provided by the counterpart should match the registry record exactly. Discrepancies in name, address, or management details are an immediate red flag.
2Request Financial Documentation
Registration confirms legal existence — it says nothing about financial health. Request recent annual accounts filed with the relevant national authority. In Belgium, companies are required to file annual accounts with the National Bank, and these are publicly accessible.
What to look for:
- Revenue trends over the past 2–3 years
- Outstanding liabilities or signs of insolvency
- Whether accounts have been filed on time (late filings indicate management issues)
- Capital structure — is the company adequately capitalised for the transaction you're considering?
A counterpart that refuses to share financial documentation, or claims exemption without justification, should be treated with caution.
3Verify the Business Scope and Actual Operations
Many companies — particularly in Belgium and other European jurisdictions — include extremely broad object clauses in their articles of incorporation. It is common to see a single company's founding documents list sectors as diverse as medical supplies, construction, precious metals trading, event management, and import/export. This is a legal formality allowing flexibility, not a business profile.
Always ask specifically: What does the company actually do today? Then verify it independently through their website, LinkedIn presence, sector-specific references, and public records.
A mismatch between claimed activity and verifiable evidence of operations is a key due diligence finding.
4Request Operational References and a Project Portfolio
Ask for:
- Two or three references from current or recent clients, preferably in regions or sectors relevant to your cooperation
- A credentials document outlining major completed projects
- Any relevant certifications, licences, or sector accreditations
Legitimate companies with operational history will have these available. Difficulty producing them after a reasonable period is informative.
5Establish Beneficial Ownership
Know who ultimately controls the entity. In cross-border transactions, the individual behind the company matters as much as the legal structure. Request:
- The name and background of the beneficial owner(s)
- Confirmation that the signatory has authority to enter agreements on behalf of the company
- Disclosure of any related entities or group structures
Red Flags That Warrant Closer Scrutiny
The following do not automatically disqualify a counterpart, but each warrants a direct follow-up before any agreement is signed:
- Documents legalized but not independently verified for content accuracy
- Reluctance or delay in providing financial statements or client references
- A registered address that does not match the claimed operational base
- An extremely broad business scope with no verifiable core activity
- Inconsistent answers about operational history or key personnel
- A company registered for only a short time relative to the size of the proposed agreement
- Management mandates listed as unpaid (gratuit) in jurisdictions where this is unusual for the scale claimed
How IHL Supports Your Due Diligence Process
IHL works with companies entering new international partnerships to structure the verification process before it becomes a liability. Our advisory support covers:
- Guiding registry checks across relevant jurisdictions
- Reviewing incorporation documents, legalization certificates, and corporate structures for completeness and consistency
- Identifying the right documentation to request — and flagging what's missing
- Drafting pre-agreement correspondence, including formal information request letters, that protect your position while maintaining a professional tone
- Providing an independent assessment before you commit
Whether you are evaluating a first-time partner in Europe, the Middle East, or beyond, IHL helps you move forward with confidence rather than assumption.
Contact IHL before signing. A structured due diligence review at the start costs a fraction of what a problematic agreement costs later.