What Governments Should Verify Before Signing an MOU with a Foreign Investor

A version of this pitch crossed my desk regularly across a decade in senior roles in Liberian government, including Deputy Minister for Revenue, Deputy Minister for Fiscal Affairs, and CEO of the Liberia Maritime Authority: an investor, often representing a fund or consortium with an impressive-sounding name, proposing a major infrastructure, resource, or development project, and requesting a memorandum of understanding be signed quickly, with financial and operational details to follow.

The pressure to move fast is real. Governments compete for investment, timelines matter politically, and turning away a legitimate opportunity because verification took too long carries its own cost. The pitch rarely got easier to evaluate under that pressure. If anything, the pressure was often the point.

Why an MOU is not a low-stakes document

An MOU is frequently treated internally as a non-binding formality, a starting point rather than a commitment. In practice, a signed MOU is an asset the moment it's signed, regardless of what happens next. It can be shown to other counterparties, other governments, or other investors as evidence of legitimacy and government relationship. An investor with no intention of ever delivering a project can still extract real value from the MOU itself.

That asymmetry, low apparent cost to the government, real value to the investor, is exactly why a rushed MOU deserves the same scrutiny as a binding contract, not less.

What should actually be verified before signing

Corporate identity and standing. The entity proposing the deal should be confirmed as a real, currently registered company in good standing, not dissolved, not in administration, and not a shell formed months before the pitch was made. Formation date relative to outreach date is itself a signal worth checking.

Beneficial ownership. Who actually controls the entity, and whether that ownership runs through jurisdictions that make it difficult to determine, is directly relevant to a government's ability to hold anyone accountable if commitments aren't met.

Financial capacity. Claimed fund size or project financing should be checkable against independent sources, audited financials, a fund administrator, or bank references, not taken from the pitch deck itself.

Sanctions and politically-exposed-person exposure. This matters for governments specifically in a way it doesn't always for private commercial counterparties: a government entering an agreement with a sanctioned party, or a party closely connected to one, carries diplomatic and legal exposure well beyond the immediate deal.

Prior project history. Named prior projects, especially ones claimed in other developing-economy contexts, are worth verifying independently rather than through references the investor supplies. A pattern of MOUs signed with multiple governments, none of which resulted in a completed project, is a specific, checkable, and highly informative pattern.

Offshore structure. Layered offshore entities aren't automatically disqualifying, but a government should understand the actual structure, and the actual accountable parties, before committing to anything in writing.

A pattern worth naming directly

The specific combination of an unfamiliar or newly formed entity, a request to sign quickly, and reluctance to have financial capacity independently verified is common enough to name as its own pattern. It doesn't prove bad faith on its own. It's exactly the combination that warrants slowing down rather than speeding up, regardless of the political cost of doing so.

What proper verification looks like in this context

The goal isn't to make every MOU adversarial or to signal distrust of legitimate investors, who generally have no objection to being verified since it's a process they've been through before. The goal is separating the two cases before signature rather than after, when the only remaining options are worse.

A verification process built for this specific situation checks: entity registration and status, beneficial ownership, sanctions and PEP exposure, financial capacity where verifiable, prior project history through independent sources, and offshore structure, delivered as a clear, sourced report rather than a raw data dump that still requires expert interpretation.

Scrutinex was built in part around this exact scenario. Full-tier Combined reports cover both the entity and the individuals behind it, with every finding sourced so it can be independently checked, not just taken on faith from the report itself. See a sample report or get started.