Evaluate a GCC acquisition by verifying exactly what is being bought, testing the target’s earnings and liabilities, identifying country- and sector-specific approvals, and converting every material finding into a deal action. Treat Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE as six separate legal jurisdictions—not one market with one rulebook—and validate requirements for the target’s location, activity, entity structure, and transaction dates.
How to use this checklist
Run diligence in parallel across corporate, financial, tax, legal, regulatory, people, and technology workstreams. Start with the transaction perimeter and approval risks: either can change what the buyer can acquire or whether the deal can close. For each workstream, record the document reviewed, the issue found, its likely impact, the person responsible for resolving it, and the decision or protection it requires.
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This is a general checklist, not legal, tax, accounting, valuation, or investment advice for a particular deal. Engage advisers familiar with the target’s jurisdiction and sector, and verify current requirements with the relevant authority before relying on them.
1. Define the deal perimeter and map the group
Do not assume the entity presented as the target owns or operates the whole business. Obtain a group chart, then test it against legal records and actual operations.
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- Trace direct and ultimate beneficial ownership, including subsidiaries, branches, nominees, side arrangements, onshore and free-zone entities, and offshore holding companies.
- Reconcile the chart to commercial registrations, constitutional documents, shareholder records, board approvals, licences, and the entities’ actual activities.
- For each material asset, employee group, licence, customer relationship, and key contract, identify the exact legal entity that owns, employs, holds, invoices, or signs.
- Check whether the transaction perimeter includes every entity needed to keep the business operating after closing. Identify assets or operations that sit outside it and determine whether they can be transferred.
A GCC legal due-diligence checklist highlights the risk that group charts can obscure where rights and obligations sit—for example, a brand may be registered personally to a founder rather than to the operating company.
2. Test earnings, cash conversion, and liabilities
Build a financial picture from records that can be reconciled, not just from the seller’s information memorandum or headline earnings figure. Corvian’s financial due-diligence framework groups the review around quality of earnings, working capital, net debt and debt-like items, tax or regulatory exposure, and related-party transactions.
Verify the numbers
- Reconcile audited and management accounts to general ledgers, bank statements, tax filings, and operating data.
- Test revenue recognition, gross and operating margins, customer concentration, and the timing and collectability of receivables.
- Separate recurring operating performance from one-off items, owner expenses, and related-party dealings. Challenge forecasts against historical results and operational evidence.
- Review working-capital seasonality and capital expenditure needs. Establish whether the proposed working-capital peg or adjustment reflects the business’s actual cycle.
Find debt-like and contingent obligations
- Identify borrowings, guarantees, lease obligations, unpaid supplier balances, employee-benefit accruals, and other items that could affect the price or cash required at closing.
- Check contingent liabilities and commitments that may not be obvious in audited statements, including disputes, tax exposures, and obligations to related parties.
- Agree a written definition of cash, debt, debt-like items, and working capital for the transaction documents; labels alone do not settle whether an item is included in the price calculation.
3. Review tax, customs, and accounting exposures
Reconcile filed returns, assessments, audits, objections, payments, and provisions. Review historical exposure as well as transaction and post-close consequences. The applicable taxes and treatment depend on the country, entity, activity, and structure; do not carry a rate, threshold, or exemption from one GCC jurisdiction into another.
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- Assess corporate income tax, VAT, withholding taxes, transfer pricing, customs, and any group-relief or tax-grouping arrangements that apply to the target.
- Check whether free-zone treatment is relevant and whether the entity’s activities and structure satisfy the applicable conditions.
- For Saudi Arabia, include Zakat and social-insurance exposure in the review.
- For UAE businesses, include VAT and corporate tax; review end-of-service benefits and Wage Protection System payroll compliance where relevant. For Saudi businesses, check General Organization for Social Insurance exposure.
- Test related-party arrangements, particularly in family-owned businesses, against records, filings, and the proposed post-close structure.
4. Confirm ownership, authority, and licences
Verify the legal form and good standing of every in-scope entity. Compare constitutional documents and shareholder agreements with the proposed sale, then check security interests, transfer restrictions, shareholder rights, and consent requirements.
Create a licence-and-permit register showing, for each authorisation, the holder, regulator, activity and geographic scope, expiry date, conditions, and any transfer or change-of-control requirement. Confirm that the entity carrying out the activity is the entity holding the necessary permission.
Test foreign-ownership rules against the target’s actual activity and structure. As one country-specific example, Qatar’s Ministry of Commerce and Industry says Law No. 1 of 2019 allows up to 100% foreign ownership in permitted economic sectors, while excluding banks, insurance, commercial agencies, and other restricted sectors. The Ministry directs investors to check the activity against the official positive list. That framework is not a GCC-wide rule and should not be assumed to apply to another country or activity.
5. Screen competition and sector approvals before signing
Competition review and sector-regulator approval are separate questions. A deal may need competition clearance, consent from a sector regulator, both, or neither; the answer depends on the transaction and current rules. Screen early enough to understand filing obligations, review periods, and whether signing or closing must wait for approval.
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- Check local notification tests and thresholds, the filing timetable, and whether any standstill or closing restriction applies.
- Identify sector-specific approvals separately, including approvals tied to regulated assets or the buyer’s ownership and governance.
- Build the filing plan and approval conditions into the transaction timetable and documents. Seek local competition and sector advice where approval risk could affect signing or closing.
For a dated country example, Chambers and Partners’ 2026 Saudi merger-control guide describes the General Authority for Competition framework and its clarified decisive-influence approach. It reports a SAR 200 million combined annual-sales threshold together with additional target and local-sales conditions. That is a summary of Saudi rules in a 2026 guide, not a GCC threshold or a complete test for a particular transaction; verify the current requirements with the authority and local counsel. A 2025 Qatar guide describes a separate control-or-domination approach.
For regulated UAE banks, the Central Bank of the UAE’s Major Acquisitions Regulation says a bank must obtain prior written approval before completing a major acquisition and identifies a due-diligence report among application materials. This is a bank-specific example, not a general approval rule for every UAE company acquisition. Confirm the current rule and its application directly with the regulator.
6. Test contract continuity
Review material customer, supplier, distribution, franchise, agency, financing, lease, government, and technology agreements. Focus on provisions that could impair the business or alter its economics when ownership changes.
- Mark assignment, change-of-control, termination, consent, exclusivity, pricing, minimum-purchase, and renewal terms.
- Identify counterparties that can terminate, withhold consent, or renegotiate after closing, and assess the practical effect if they do.
- Check whether essential services and supply arrangements remain available while regulatory approvals or other closing conditions are pending.
- Confirm which party must obtain each consent and by when; make the required consent a closing condition where appropriate.
7. Verify intellectual property, data, and technology
Establish that the target owns or has durable rights to the technology and other intangibles on which its operations depend. A legal checklist for GCC diligence notes that brands can be registered in a founder’s personal name and that software used by a business may be licensed rather than owned by its operating entity.
- Check registration and ownership of brands, domains, software, designs, and other critical IP.
- Review employee and contractor assignments, licences, third-party restrictions, renewal dates, source-code access, and control of domains and social accounts.
- Assess privacy compliance, data-location and access restrictions, cybersecurity incidents, system resilience, and dependence on key technology vendors.
- Identify any right that needs to be assigned, renewed, replaced, or secured as a condition of closing or an integration task.
8. Review employees and employment liabilities
Sample employment records and reconcile them to payroll and headcount data. Check employment contracts, accrued leave, end-of-service obligations, pension or social-insurance contributions, disputes, contractor classification, and applicable localization requirements.
- Where relevant, examine wage-protection records, visa and sponsorship files, and work-permit status.
- Assess whether key managers and technical staff are likely to remain, and whether retention or incentive arrangements are needed.
- Quantify accrued or disputed obligations and determine whether they require a price adjustment, contractual protection, or a post-close plan.
Country-specific examples include employment contracts, sponsorship, and visa status in the 2025 Qatar diligence guide; UAE end-of-service benefits and WPS compliance; and Saudi GOSI exposure. Their applicability depends on the target’s location, workforce, and structure.
9. Investigate disputes, compliance, and integrity
Review litigation, arbitration, regulator correspondence, investigations, complaints, and insurance claims. Ask about pending, threatened, and settled matters, and compare disclosures with legal files and management representations.
- Assess sanctions and export-control exposure, anti-bribery controls, beneficial-ownership records, and related-party conflicts.
- Look for informal practices, unresolved complaints, and contingent claims that may not appear in audited financial statements.
- Review privacy and sector-specific compliance alongside tax filings where those risks overlap with the target’s operations.
10. Convert every finding into a deal decision
A diligence issue has value only if the buyer decides how to address it. Maintain a findings register that links evidence to an action, rather than collecting observations without an owner or deadline.
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Random freezes, missing sound and display glitches usually trace back to one bad driver. Find and replace yours safely.Free scan · under a minute- Describe the evidence. Record the document or interview, the relevant entity and period, and what remains unverified.
- Assess the consequence. Estimate financial and operational impact, likelihood, urgency, and whether the issue could prevent the business from operating as expected.
- Assign responsibility. Name the deal-team member or adviser who will resolve the question and set a deadline tied to signing or closing.
- Select the transaction response. Decide whether the finding changes price, working-capital or debt adjustments; requires regulator consent or a condition precedent; warrants a specific indemnity, escrow, retention, warranty, covenant, or closing deliverable; belongs in the integration plan; or calls for stopping the deal.
- Revisit the valuation and decision. Update assumptions using verified evidence. Do not treat the seller’s information memorandum as established fact.
Compare targets or deal structures on the same basis
When weighing two targets, advisers, or transaction structures, use consistent criteria so that a strong result in one workstream does not obscure a material weakness in another.
- Jurisdiction, sector, ownership structure, and approval exposure.
- Verified asset and entity perimeter; earnings quality, cash conversion, debt-like items, and contingent liabilities.
- Customer and supplier concentration; tax and customs position; employment, IP, and data risks.
- Evidence quality, unresolved questions, time to close, and the contractual or operational cost of remediation.
When comparing advisers, assess local legal capability, financial and tax expertise, sector experience, independence and conflicts, scope, deliverables, language capability, timetable, and fee basis. No single adviser or structure is suitable for every transaction.
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