I get a lot of emails asking “how to verify that this company is legitimate?”, and I usually give the following advice.
The first question to ask is “where is the company located?” Many suppliers use a Hong Kong company name and give an address in the mainland (often in Shenzhen). Based on the company name I can often guess where it is based, but that’s not easy for most foreign buyers.
If the company is in HK, the importer can find a lot of tips in Background checks on Hong Kong companies.
If the company is in China, the corresponding article is 6 tips for background checks on Chinese suppliers. But I realized that I didn’t cover all sources of information in this article.
This weekend I read through China Checkup’s past articles, and I found some great resources. Here a few of them.
Usually, a Chinese supplier has no problem sending a copy of their business license to potential customers. It is not a secret document. It is in Chinese, but shows interesting data. For example:
- When the company was set up (does it correspond to what they told you?)
- Registered address (is it the same as they show in their signature? if not, do they have an explanation?)
- Invested capital (if this is 100,000 rmb, you know you are not dealing directly with a manufacturer.)
This article’s title is a bit misleading. I wish finding out a supplier’s nature were that simple. But one of the fields shown on the business license is the nature of business (trading, manufacturing…). It might be an easy way to spot and disqualify an intermediary. But beware — many manufacturers also engage in trading.
Unfortunately, you won’t find one database containing all Chinese registered businesses. But you can go to the AIC (“Administration of Industry and Commerce”) websites, search in Chinese, and with a bit of luck find some information about your target.
This is another “can’t hurt not not fool-proof” method. I have never used it and I don’t see it as reliable.
This one is really for geeks! As I wrote before, many certificates provided by Chinese suppliers are fake, so detecting “photoshopping” can only be a good thing.
Do you have other tips for verifying a Chinese company’s legitimacy?