How to Conduct Business Due Diligence in South Sudan Before Investing

Introduction

Investing in an existing business or entering a commercial partnership can provide an opportunity to access an established market, customer base, workforce and operating infrastructure. However, an investment that appears attractive on the surface may carry financial, legal, operational or commercial risks that are not immediately visible.

In South Sudan, conducting proper business due diligence is particularly important. Investors need to understand not only the financial performance of a business but also its ownership structure, regulatory position, contractual obligations, operating environment and ability to sustain its activities.

A company may have an established presence in the market but still have unresolved tax obligations, incomplete registration records, disputed ownership, outstanding debts, expired licences or operational weaknesses. These issues can affect the value of an investment and create unexpected costs after the transaction.

Business due diligence is the process of systematically investigating and evaluating a business before committing capital, acquiring ownership, entering a joint venture or establishing a strategic partnership.

This guide explains how investors can conduct business due diligence in South Sudan, the areas that should be examined, the documents to request and the risks to consider before making an investment decision.

1. What Is Business Due Diligence?

Business due diligence is an independent assessment of a company's overall condition, performance and investment potential.

It helps investors establish whether the information presented by a business owner or seller is accurate, whether the company is operating in compliance with applicable requirements and whether the proposed investment makes commercial and financial sense.

The process normally examines several areas:

• Corporate and ownership due diligence: Verifying the company's legal existence, shareholders, ownership rights and management structure.

• Financial due diligence: Reviewing financial statements, revenue, expenses, cash flow, assets, debts and financial performance.

• Tax due diligence: Assessing tax registration, tax returns, outstanding liabilities and compliance.

• Legal and regulatory due diligence: Reviewing licences, permits, contracts, disputes and regulatory obligations.

• Operational due diligence: Evaluating business processes, workforce, suppliers, infrastructure and operating capacity.

• Commercial due diligence: Assessing customers, competitors, market demand, pricing and growth prospects.

• Asset and liability due diligence: Verifying the ownership, condition and value of business assets and identifying existing or potential liabilities.

The scope will depend on the size, sector and nature of the proposed investment. Acquiring an established company, investing in a start-up and entering a joint venture will not necessarily require the same level of investigation.

2. Why Is Business Due Diligence Important Before Investing in South Sudan?

Due diligence helps investors make decisions based on verified information rather than assumptions, projections or representations made by the business owner.

Several considerations make this process particularly important in South Sudan.

2.1 Verifying business ownership

Investors should establish who legally owns the business and whether the individuals presenting the investment opportunity have the authority to sell shares, transfer assets or enter into a partnership.

This is particularly important where ownership arrangements are not clearly documented or where several individuals claim an interest in the business.

2.2 Understanding the regulatory environment

Businesses may be subject to different registration, licensing, tax, employment and sector-specific requirements.

An investor should confirm that the target company has obtained the approvals necessary for its activities and understands the obligations associated with continuing its operations.

2.3 Identifying hidden financial liabilities

A business may report attractive revenue while carrying significant unpaid taxes, supplier debts, employee obligations, loans or other financial commitments.

These liabilities can reduce the actual value of the business and affect its future cash flow.

2.4 Assessing operational sustainability

A company may depend heavily on one customer, supplier, employee, government contract or business relationship.

Investors need to understand whether the business can continue operating if one of these relationships changes or ends.

2.5 Protecting investment capital

Due diligence helps identify risks before money is committed. It also provides a basis for negotiating the purchase price, investment structure, warranties, indemnities, conditions and other contractual protections.

3. Step One: Verify the Company's Legal Existence and Ownership

The first stage is to establish whether the business legally exists and whether its ownership information is accurate.

Investors should not rely exclusively on registration certificates or documents supplied by the seller. Important company information should be independently verified with the relevant authorities.

Documents to request

Request and examine:

• Certificate of Incorporation or business registration certificate.

• Approved company name and registration details.

• Memorandum and Articles of Association.

• Current shareholder register or ownership records.

• Share certificates, where applicable.

• Details of directors and authorised representatives.

• Board and shareholder resolutions.

• Previous ownership transfer documents.

• Joint venture or shareholders' agreements.

• Details of beneficial owners, where available and applicable.

Key questions to investigate

• Is the company legally registered in South Sudan?

• Who are its registered shareholders?

• Who are the actual beneficial owners?

• Are there any undisclosed shareholders or ownership arrangements?

• Have shares been transferred or pledged as security?

• Does the seller have the authority to transfer the proposed ownership interest?

• Are there disputes between shareholders?

• Are company records and annual returns up to date?

The Ministry of Justice and Constitutional Affairs is responsible for registering companies and businesses and maintaining relevant registration records. Its Directorate of Registration of Companies and Businesses also identifies responsibilities relating to company information, returns and shareholder-related matters. Investors should use the available registration services to validate company records.

3.1 Verify business registration independently

South Sudan's Business Registration Services platform provides a facility for validating business and company records. The process includes identifying the registered business and submitting ownership and business details for verification.

Investors can consult the official Business Registration Services portal and the Ministry of Justice and Constitutional Affairs for relevant registration information.

A registration certificate confirms an important part of a company's legal status, but it does not independently establish that the business has no outstanding liabilities, disputes or regulatory problems.

4. Step Two: Conduct Financial Due Diligence

Financial due diligence evaluates the company's financial health, historical performance and ability to generate sustainable returns.

Investors should establish whether the business is genuinely profitable, whether its reported revenue is supported by evidence and whether its financial position is consistent with the investment opportunity being presented.

4.1 Review financial statements

Request financial statements for at least the last three financial years, where available.

The review should include:

• Income statements.

• Balance sheets.

• Cash flow statements.

• Management accounts.

• Bank statements.

• Sales and purchase records.

• Accounts receivable and payable schedules.

• Loan agreements and repayment schedules.

• Fixed asset registers.

• Inventory records.

Where audited financial statements are available, review the audit reports and any qualifications or observations made by the auditor.

Where formal financial records are incomplete, investors may need to reconstruct the company's financial position using bank statements, invoices, receipts, contracts and other supporting records.

4.2 Verify revenue and profitability

Revenue should be supported by actual transactions rather than relying solely on management estimates.

For example, if a company reports annual revenue of USD 1 million, investors should examine:

• Sales invoices and receipts.

• Customer contracts.

• Bank deposits and payment records.

• Outstanding customer balances.

• Evidence of completed deliveries or services.

• Revenue concentration by customer.

It is also important to distinguish between revenue, gross profit, operating profit and actual cash generated by the business.

A company can report high sales while experiencing cash flow difficulties because customers have not paid their invoices.

4.3 Examine debts and financial obligations

Investors should identify all existing financial commitments, including:

• Bank loans and overdrafts.

• Shareholder loans.

• Supplier credit.

• Outstanding customer deposits.

• Lease obligations.

• Unpaid salaries and employee benefits.

• Tax liabilities.

• Guarantees and contingent liabilities.

• Pending legal claims with potential financial consequences.

The objective is to establish the company's actual financial position rather than relying on its reported net profit.

4.4 Assess cash flow and working capital

Working capital is particularly important for businesses operating in markets where access to finance, payment delays and foreign currency availability can affect day-to-day activities.

Review whether the company has sufficient liquidity to pay suppliers, employees, rent, taxes and other operating expenses.

Investors should also consider the time required to collect customer payments and the amount of capital needed to maintain normal operations.

5. Step Three: Conduct Tax Due Diligence

Tax due diligence examines whether the company is properly registered and has fulfilled its tax obligations.

Unpaid taxes and incomplete tax records can create financial exposure for investors, particularly when acquiring an existing business.

Documents to request

• Taxpayer Identification Number (TIN) certificate.

• Tax registration records.

• Filed tax returns.

• Tax payment receipts.

• Tax clearance certificates, where applicable.

• Withholding tax records.

• Payroll-related tax records.

• Correspondence with the National Revenue Authority.

• Records of tax assessments, audits or disputes.

Key tax areas to examine

Corporate income tax: Review the company's tax filings, declared profits and tax payments.

Withholding tax: Examine whether the business has correctly withheld and remitted applicable taxes on relevant payments, including payments to suppliers, consultants, landlords and contractors.

Employment-related taxes: Check payroll records and applicable employee tax obligations.

Other applicable taxes and duties: Depending on the business activities, assess indirect taxes, customs duties and other relevant fiscal obligations.

Investors should reconcile reported revenue and expenses with tax filings and supporting accounting records.

The National Revenue Authority provides an online eTax platform for business registration and tax services. Its guidance indicates that legally registered businesses and companies operating in South Sudan require a TIN and that business validation through the Ministry of Justice is part of the registration process.

Investors can consult the National Revenue Authority eTax platform when verifying relevant tax registration information.

Important: A tax clearance certificate should not automatically be treated as proof that a business has no historical or potential tax exposure. Investors should examine the underlying filings, payments, assessments and correspondence.

6. Step Four: Review Legal and Regulatory Compliance

Legal and regulatory due diligence establishes whether the business is authorised to operate and whether it has complied with the laws and regulations relevant to its activities.

South Sudan's business registration and investment procedures involve several public institutions. The relevant requirements depend on the company's legal structure, ownership, sector and operating activities.

6.1 Business registration and investment approval

Check whether the company has the necessary registration documents and investment approvals.

The East African Community's published South Sudan investment procedures identify the following key processes:

Requirement	Relevant authority	Document or approval
Name reservation	Ministry of Justice	Name Approval Certificate
Company registration	Ministry of Justice	Certificate of Incorporation
Investment approval	Ministry of Investment	Investment Certificate
Tax registration	National Revenue Authority	TIN Certificate
Social security registration	Relevant pension/social security authority	Employer registration
Environmental compliance	Ministry of Environment and Forestry	Relevant environmental approval
Sector licensing	Relevant line ministry or regulator	Sector-specific permit
Work permits	Ministry of Labour and relevant authorities	Work permit

The applicable procedures and legal references are set out in the East African Community's South Sudan investment procedures. Investors should confirm current requirements directly with the relevant authorities before relying on any checklist.

6.2 Sector-specific licences

Some businesses require additional approvals before they can legally conduct their activities.

For example:

• Financial institutions and certain financial services are subject to regulation by the Bank of South Sudan.

• Telecommunications businesses may require sector-specific authorisations.

• Businesses involved in petroleum operations may require relevant petroleum-sector approvals.

• Importers and exporters may need trade-related registrations, permits and customs documentation.

• Certain projects may require environmental approvals.

Investors should verify that all licences are valid, apply to the actual business activities and can remain effective following a change in ownership.

6.3 Review contracts and legal obligations

Examine the company's important commercial and legal agreements, including:

• Customer and supplier contracts.

• Government contracts.

• Lease and rental agreements.

• Employment contracts.

• Distribution agreements.

• Financing agreements.

• Joint venture agreements.

• Shareholders' agreements.

• Service and consultancy agreements.

• Guarantees and indemnities.

Pay attention to termination clauses, outstanding obligations, renewal provisions, exclusivity arrangements, penalties and change-of-control restrictions.

6.4 Identify legal disputes

Ask the company to disclose current and previous disputes involving:

• Shareholders and directors.

• Employees.

• Customers and suppliers.

• Government institutions.

• Landlords and property owners.

• Lenders and creditors.

Where appropriate, obtain independent confirmation from legal advisers and review available court, regulatory and dispute records.

7. Step Five: Verify Business Assets, Property and Liabilities

An investor should establish whether the company owns the assets it claims to own and whether those assets are suitable for the intended business activities.

7.1 Verify ownership of assets

Review ownership documents for:

• Land and buildings.

• Vehicles and machinery.

• Equipment and tools.

• Office furniture.

• Inventory and stock.

• Intellectual property.

• Software and technology systems.

Physical inspections should be conducted where practical to confirm that the assets exist, are in usable condition and match the company's records.

7.2 Conduct land and property checks

Land and property require particular attention.

Investors should examine:

• Land ownership or allocation documents.

• Lease agreements.

• Land-use permissions.

• Property boundaries and location.

• Outstanding rental obligations.

• Existing claims or disputes.

• Restrictions on transfer or use.

• Relevant approvals for construction or development.

A document presented as evidence of land ownership should not be accepted without independent verification with the appropriate land authorities and qualified local legal advisers.

The World Bank's 2025 Business Ready assessment of South Sudan identifies issues relating to property transfer, land administration and the protection of property rights. This reinforces the importance of independently checking property documentation rather than relying only on documents supplied by a seller.

7.3 Identify secured assets and hidden liabilities

Determine whether any company assets have been pledged, mortgaged, leased or otherwise restricted.

Also investigate whether the business has outstanding obligations that could affect its assets or future operations.

These may include unpaid rent, supplier claims, employee liabilities, outstanding loans, equipment leases and unresolved contractual commitments.

8. Step Six: Assess Operations and Management

Operational due diligence examines how the business functions in practice and whether its operating model can support future growth.

A business may have attractive financial results but depend on weak processes, limited management capacity or a small number of key individuals.

Areas to assess

Organisational structure: Review the management hierarchy, reporting relationships and allocation of responsibilities.

Workforce: Examine employee numbers, job descriptions, employment contracts, salaries, benefits and staff turnover.

Business processes: Assess procurement, inventory management, sales, customer service, accounting and internal controls.

Infrastructure: Evaluate premises, equipment, vehicles, utilities, connectivity and other operating resources.

Management capability: Assess the experience, qualifications and track record of key managers.

Technology and information systems: Review accounting software, ERP systems, customer records, cybersecurity practices and data management.

Questions to ask

• Does the business have an effective management team?

• Are responsibilities clearly assigned?

• Are important processes documented?

• Does the company depend on one or two key employees?

• Are internal financial controls adequate?

• Can the business operate without the current owner?

• Are existing systems suitable for future expansion?

The purpose is to understand whether the business has a sustainable operating model or whether substantial investment will be required to improve its internal capacity.

9. Step Seven: Conduct Commercial and Market Due Diligence

Commercial due diligence examines whether the business has a viable market position and realistic growth opportunities.

It helps investors understand the market in which the company operates, its competitive position and the factors that may influence future revenue.

9.1 Assess market demand

Investigate:

• The size of the target market.

• Customer needs and purchasing behaviour.

• Market growth trends.

• Geographic demand.

• Seasonal variations.

• Customer purchasing power.

• Barriers to entering the market.

Investors should distinguish between general market opportunities and actual demand for the company's products or services.

9.2 Review customers and revenue concentration

Identify the company's main customers and determine how much revenue each contributes.

A company that depends on one major customer or a single government contract may face significant risk if that relationship ends.

Where possible, obtain independent confirmation of major customer relationships and review the history of payments and contract performance.

9.3 Assess competitors

Identify direct and indirect competitors and compare their:

• Products and services.

• Pricing.

• Market presence.

• Customer relationships.

• Distribution networks.

• Operating capacity.

• Competitive advantages.

The objective is to determine whether the target business has a defensible market position.

9.4 Examine suppliers and distribution channels

Review the company's supplier relationships, purchasing arrangements, stock availability, delivery systems and distribution networks.

For businesses relying on imported goods, consider customs procedures, transport costs, foreign currency requirements, delivery times and the reliability of supply routes.

9.5 Evaluate future growth potential

Review management's business plan and assess whether projected growth is supported by realistic assumptions.

Investors should examine whether expansion requires additional working capital, new licences, equipment, employees, premises or strategic partnerships.

10. Step Eight: Assess Investment Risks Specific to South Sudan

Due diligence should consider the broader environment in which the business operates.

These risks may vary significantly between sectors, locations and investment structures.

10.1 Regulatory and administrative risk

Changes in regulatory requirements, administrative procedures, licensing arrangements and government approvals may affect business operations.

Investors should identify the authorities responsible for regulating the target business and confirm the approvals required for continuing operations.

10.2 Currency and liquidity risk

Businesses may face challenges relating to foreign currency availability, exchange-rate movements, payment processing and the ability to transfer funds.

Investors should assess how the company manages its local and foreign currency transactions and whether it can meet obligations to suppliers, lenders and international partners.

10.3 Security and business continuity risk

Assess the security conditions in the company's operating locations and how they may affect employees, transport, supply chains and customer access.

Businesses should have practical continuity arrangements for interruptions to operations.

10.4 Infrastructure and logistics risk

Electricity, telecommunications, road access, transport and storage can influence operating costs and productivity.

Investors should establish whether the company's infrastructure is adequate and whether additional capital expenditure will be necessary.

10.5 Governance and transparency risk

Weak internal controls, incomplete records, unclear ownership arrangements and conflicts of interest can create significant investment risks.

Investors should examine how management makes decisions, approves expenditure and reports financial and operational performance.

11. Step Nine: Evaluate the Business and Determine Its Investment Value

After completing the main due diligence reviews, investors should determine whether the proposed investment price reflects the company's actual financial position, assets, liabilities and future prospects.

A business should not be valued solely on its reported revenue or the seller's expectations.

Common valuation approaches include:

Asset-based valuation: Estimates the value of the company's assets after considering its liabilities.

Earnings-based valuation: Assesses the business using its historical or maintainable earnings and an appropriate valuation multiple.

Discounted cash flow valuation: Estimates the present value of expected future cash flows using assumptions about growth, investment requirements and risk.

The appropriate method depends on the nature and maturity of the business, the quality of its financial information and the availability of reliable forecasts.

Example of an investment adjustment

Assume an investor is considering purchasing a business for USD 500,000.

During due diligence, the investor identifies:

Item	Amount
Proposed purchase price	USD 500,000
Outstanding supplier liabilities	USD 30,000
Unpaid tax obligations identified	USD 20,000
Required equipment replacement	USD 25,000
Total identified adjustments	USD 75,000

These findings do not automatically mean that the purchase price should be reduced by USD 75,000. The investor must establish whether the liabilities are already reflected in the valuation, whether they will be settled by the seller and whether the equipment expenditure is necessary immediately after completion.

However, the findings provide a basis for renegotiating the price, requiring the seller to settle certain obligations or introducing contractual protections.

12. Step Ten: Prepare a Due Diligence Report and Make an Investment Decision

The findings should be consolidated into a structured due diligence report.

The report should identify the issues discovered, assess their potential impact and recommend actions before the investor commits capital.

A practical report may include:

1. Executive summary.

2. Background of the target business.

3. Corporate ownership and registration review.

4. Financial performance and financial position.

5. Tax compliance assessment.

6. Legal and regulatory review.

7. Asset and liability assessment.

8. Operational and management review.

9. Commercial and market assessment.

10. Investment risks and opportunities.

11. Valuation considerations.

12. Recommendations and conditions before investment.

12.1 Classify the identified risks

Not all findings have the same level of importance. Investors should classify risks according to their potential impact and urgency.

Risk classification	Meaning	Recommended response
High	Could prevent the transaction or result in significant financial or legal exposure	Resolve before investment or reconsider the transaction
Medium	Could affect profitability, operations or investment value	Negotiate protections or require corrective action
Low	Limited impact or manageable operational issue	Monitor and address after completion

12.2 Decide whether to proceed

The final investment decision should consider whether:

• The ownership structure is clear and verified.

• The financial position is reliable.

• Material liabilities have been identified.

• Legal and regulatory requirements can be satisfied.

• The business has a viable market position.

• The valuation is commercially reasonable.

• Key investment risks can be managed.

• The transaction structure adequately protects the investor.

Possible outcomes include proceeding with the investment, renegotiating the terms, requiring additional information, making completion conditional on specific actions or withdrawing from the opportunity.

13. Business Due Diligence Checklist for Investors in South Sudan

The following checklist provides a practical starting point for investors evaluating an existing business or potential investment opportunity.

Due diligence area	Key documents and checks
Corporate and ownership	Registration certificate, shareholder records, directors, beneficial ownership and company constitution
Financial	Financial statements, bank statements, revenue records, debts, cash flow and assets
Tax	TIN, tax returns, payment records, tax assessments and tax clearance where applicable
Legal and regulatory	Business licences, investment approvals, permits, contracts and regulatory correspondence
Assets and property	Land documents, leases, asset register, equipment ownership and security interests
Workforce	Employee records, contracts, payroll, benefits and organisational structure
Operations	Procurement, inventory, systems, internal controls and business continuity
Commercial	Customers, suppliers, competitors, pricing, market demand and sales pipeline
Investment risks	Currency, liquidity, security, infrastructure, governance and regulatory exposure
Valuation	Earnings, cash flow, asset values, liabilities and investment projections

The checklist should be adapted to the particular business and sector. It is not a substitute for detailed legal, tax, financial or technical investigations where these are necessary.

14. Common Mistakes Investors Should Avoid

Even experienced investors can overlook important issues when evaluating an investment opportunity.

Common mistakes include:

Relying only on documents supplied by the seller. Documents should be independently verified wherever possible.

Accepting reported revenue without supporting evidence. Sales figures should be reconciled with invoices, contracts, bank records and customer confirmations.

Ignoring outstanding liabilities. Unpaid taxes, loans, employee obligations and supplier debts can affect the actual value of a business.

Failing to verify ownership. Investors should establish who owns the company and who has the authority to sell or transfer shares.

Overlooking sector-specific approvals. A registered company may still lack the permits required to carry out certain business activities.

Ignoring operational weaknesses. A business may require significant investment in management, systems, equipment or workforce capacity.

Relying on unrealistic growth projections. Future revenue should be supported by market evidence, customer demand and realistic operating assumptions.

Proceeding without a properly structured agreement. The investment or acquisition agreement should address identified risks, payment conditions, warranties, indemnities and the responsibilities of each party.

15. How Omnisage Can Support Business Due Diligence in South Sudan

Conducting business due diligence requires a structured assessment of the target company's financial, commercial, operational and regulatory position.

Omnisage Consultancy Group supports investors, business owners and organisations seeking to evaluate investment opportunities and make informed commercial decisions in South Sudan.

Through its Market Entry & Investment Advisory, Finance, Tax & Transaction Advisory, Corporate & Regulatory Advisory, and Research & Intelligence services, Omnisage can support clients with:

• Business and investment assessment: Evaluating investment opportunities, business models and commercial viability.

• Corporate and ownership review: Examining company registration, ownership structures, shareholder arrangements and corporate records.

• Financial due diligence: Reviewing financial statements, revenue, expenses, cash flow, assets and liabilities.

• Tax and compliance assessment: Identifying tax exposure and reviewing relevant compliance records.

• Legal and regulatory coordination: Supporting the review of applicable licences, permits, contracts and regulatory requirements in coordination with qualified legal professionals where required.

• Commercial and market assessment: Evaluating market demand, competitors, customers, suppliers and growth opportunities.

• Investment structuring: Supporting acquisition assessments, joint ventures, partnerships and transaction planning.

• Risk assessment and reporting: Consolidating findings into practical recommendations to support investment decisions.

Whether evaluating an existing company, acquiring a business, entering a joint venture or establishing a new operation, Omnisage helps investors approach opportunities with greater clarity and a structured understanding of the risks involved.

Conclusion

Business due diligence is an essential step before investing in South Sudan. It helps investors verify the information presented by a business, understand its financial and legal position, assess its operations and identify risks that could affect investment performance.

A proper assessment should go beyond company registration and financial statements. It should examine ownership, tax compliance, contractual obligations, assets, liabilities, management capability, market conditions and the broader operating environment.

By conducting a structured due diligence exercise before committing capital, investors can negotiate more effectively, identify potential problems early and make better-informed investment decisions.

Considering investing in an existing business or entering a partnership in South Sudan? Speak to Our Advisor at Omnisage to discuss your investment assessment and due diligence requirements.