Doing business with a Chinese company can be profitable, but also risky. You need to verify the legitimacy and reliability of the company before you sign any contract or make any payment. In this article, we will show you how to verify a Chinese company’s legitimacy in five steps:
- Check the company’s business license
- Check the company’s website and online presence
- Check the company’s credit rating and legal status
- Check the company’s industry recognition and reputation
- Visit the company’s premises and conduct an audit
By following these steps, you can avoid scams and frauds and find a reliable and trustworthy Chinese partner for your business.
Step 1: Check the company’s business license
A business license is a legal document that proves the existence and identity of a company in China. It contains information such as the company name, registration number, registered address, legal representative, registered capital, business scope, etc. A business license is issued by the State Administration for Market Regulation (SAMR) or its local branches after the company completes the registration process.
To check a company’s business license, you can ask the company to provide you with a copy of its business license and verify it with the National Enterprise Credit Information Publicity System (NECIPS), which is an official online database that contains the registration records of all Chinese companies. You can access the NECIPS website at http://www.gsxt.gov.cn/index.html and search for the company name or registration number. If the company is registered and valid, you will be able to see its basic information and status on the website. You can also download a PDF file of its annual report, which contains more details about its financial situation, shareholders, subsidiaries, etc.
However, you should be aware that some scammers may forge or alter a business license to deceive you. Therefore, you should always compare the information on the business license with the information on the NECIPS website and look for any discrepancies or inconsistencies. You should also pay attention to the following aspects when checking a business license:
- Company name: The company name should match the name on the NECIPS website and other official documents. You should also check if the company name has any special words or symbols that indicate its nature or status, such as “limited”, “branch”, “representative office”, etc. For example, a branch or a representative office is not an independent legal entity and cannot sign contracts or issue invoices on its own.
- Registration number: The registration number is a unique 18-digit code that identifies a company in China. It should match the number on the NECIPS website and other official documents. You should also check if the registration number has been changed or revoked for any reason.
- Registered address: The registered address is the legal address of a company in China. It should match the address on the NECIPS website and other official documents. You should also check if the registered address is consistent with the actual location and operation of the company.
- Legal representative: The legal representative is the person who has the authority to represent and bind a company in China. It should match the name on the NECIPS website and other official documents. You should also check if the legal representative is qualified and authorized to act on behalf of the company.
- Registered capital: The registered capital is the amount of money that a company declares to invest in its business in China. It should match the amount on the NECIPS website and other official documents. You should also check if the registered capital has been fully paid up or not.
- Business scope: The business scope is the range of activities that a company is allowed to conduct in China. It should match the scope on the NECIPS website and other official documents. You should also check if the business scope covers the products or services that you are interested in.
Step 2: Check the company’s website and online presence
Another way to verify a Chinese company’s legitimacy is to check its website and online presence. A website is a window into a company’s business and reputation. It can provide you with useful information such as the company profile, products or services, contact details, certificates, awards, testimonials, etc. A website can also show you how professional and trustworthy a company is by its design, content, functionality, and security.
To check a company’s website, you can use the following methods:
- Check the domain name: The domain name is the address of a website on the internet. It usually consists of a prefix (such as www or http) and a suffix (such as .com or .cn). You should check if the domain name matches the company name and if it has a proper suffix. For example, a .cn suffix indicates that the website is registered in China, while a .com suffix indicates that the website is registered internationally. You should also check if the domain name has been registered for a long time or not. A longer registration period may imply that the company is more stable and established.
- Check the ICP license: An ICP license is a permit that allows a website to operate legally in China. It is issued by the Ministry of Industry and Information Technology (MIIT) or its local branches after verifying the identity and information of the website owner. An ICP license contains a unique number that can be found at the bottom of a website’s homepage. You should check if the website has an ICP license and if it matches the company name and registration number. You should also verify the ICP license with the MIIT’s online database at http://www.beian.miit.gov.cn.
- Check the SSL certificate: An SSL certificate is a digital certificate that encrypts the data and communication between a website and its visitors. It is issued by a trusted third-party authority after verifying the identity and information of the website owner. An SSL certificate can be recognized by a padlock icon or a green bar inthe address bar of a browser. You should check if the website has an SSL certificate and if it matches the domain name and company name. You should also check if the SSL certificate is valid and up to date.
Besides checking the company’s website, you can also check its online presence on other platforms, such as social media, e‑commerce platforms, online directories, etc. You can look for information such as the company’s followers, reviews, ratings, feedback, complaints, etc. You can also compare the information on different platforms and look for any discrepancies or inconsistencies.
Step 3: Check the company’s credit rating and legal status
A third way to verify a Chinese company’s legitimacy is to check its credit rating and legal status in the market and industry. A credit rating is an evaluation of a company’s ability and willingness to repay its debts and obligations. It is usually expressed by a letter grade or a numerical score. A higher credit rating means that a company has a lower risk of defaulting on its payments, while a lower credit rating means that a company has a higher risk of defaulting on its payments. A legal status is an indication of whether a company is involved in any legal disputes or proceedings. It can include information such as lawsuits, judgments, arbitrations, penalties, sanctions, etc. A negative legal status means that a company has violated some laws or regulations or breached some contracts or agreements, while a positive legal status means that a company has complied with the laws and regulations and honored its contracts and agreements.
To check a company’s credit rating and legal status, you can use the following methods:
- Check the company’s credit rating: You can check a company’s credit rating with various credit rating agencies in China, such as China Chengxin International Credit Rating Co., Ltd., Dagong Global Credit Rating Co., Ltd., Golden Credit Rating International Co., Ltd., etc. These agencies provide credit ratings for different types of companies based on their financial performance, business operation, industry environment, etc. You can access their websites and search for the company name or registration number to find its credit rating report.
- Check the company’s legal status: You can check a company’s legal status with various legal databases in China, such as China Judgments Online, China Arbitration Online, China Court Announcement Online, etc. These databases contain information about the legal cases and outcomes that involve Chinese companies. You can access their websites and search for the company name or registration number to find its legal status report.
Step 4: Check the company’s industry recognition and reputation
A fourth way to verify a Chinese company’s legitimacy is to check its industry recognition and reputation in its field or sector. An industry recognition is an acknowledgment of a company’s achievements and contributions in its field or sector. It can include information such as awards, certifications, memberships, rankings, etc. A higher industry recognition means that a company has a higher level of quality, professionalism, and reputation in its industry, while a lower industry recognition means that a company has a lower level of quality, professionalism, and reputation in its industry. A reputation is an impression or opinion that people have about a company based on its past performance and behavior. It can include information such as testimonials, feedback, referrals, complaints, etc. A positive reputation means that a company has satisfied and loyal customers and partners, while a negative reputation means that a company has dissatisfied and unhappy customers and partners.
To check a company’s industry recognition and reputation, you can use the following methods:
- Check the company’s awards and certifications: You can check if the company has received any awards or certifications from reputable industry associations, organizations, publications, etc. in China. These awards and certifications can demonstrate the company’s excellence and credibility in its field or sector. You can ask the company to provide you with proof of its awards and certifications or verify them with the issuing authorities.
- Check the company’s memberships and rankings: You can check if the company is a member of any industry associations, organizations, networks, etc. in China. These memberships can indicate the company’s involvement and influence in its industry. You can also check if the company is ranked by any industry publications, websites, platforms, etc. in China. These rankings can reflect the company’s performance and competitiveness in its industry. You can ask the company to provide you with proof of its memberships and rankings or verify them with the relevant sources.
- Check the company’s testimonials and feedback: You can check if the company has any testimonials or feedback from its previous or existing customers or partners. These testimonials or feedback can show you the company’s product quality and service level. You can ask the company to provide you with references or contact details of its customers or partners or look for them on its website or other platforms. You can also contact them directly and ask for their opinions and experiences with the company.
- Check the company’s complaints and disputes: You can check if the company has any complaints or disputes from its previous or existing customers or partners. These complaints or disputes can reveal you the company’s problems and risks. You can look for them on various online platforms, such as e‑commerce platforms, social media platforms, online forums, etc. You can also check if the company has resolved or handled these complaints or disputes properly or not.
Step 5: Visit the company’s premises and conduct an audit
The fifth and final way to verify a Chinese company’s legitimacy is to visit its premises and conduct an audit. This is the most direct and reliable way to verify a Chinese company’s legitimacy, as you can see its actual location, operation, production, quality, management, etc. by yourself or by hiring a third-party inspector or auditor. By visiting the company’s premises and conducting an audit, you can avoid being deceived by fake websites, forged documents, exaggerated claims, etc.
To visit a company’s premises and conduct an audit, you can use the following methods:
- Arrange a factory visit: You can arrange a factory visit with the company and ask for its permission and coöperation. You can visit its factory or office and check its facilities, equipment, materials, labor, etc. You can also ask questions and request documents or evidence to verify its information and claims. You should pay attention to the following aspects when visiting a factory or office:
- Location: The location should match the registered address and the actual operation of the company. You should also check if the location is convenient and accessible for transportation and logistics.
- Size: The size should match the registered capital and the production capacity of the company. You should also check if the size is sufficient and suitable for the products or services that you are interested in.
- Equipment: The equipment should match the product specifications and quality standards that you require. You should also check if the equipment is advanced, functional, and well-maintained.
- Materials: The materials should match the product specifications and quality standards that you require. You should also check if the materials are genuine, qualified, and well-stocked.
- Labor: The labor should match the production capacity and quality control of the company. You should also check if the labor is skilled, trained, and well-managed.
- Hire a third-party inspector or auditor: If you cannot visit the company’s premises by yourself or you want a more professional and objective verification, you can hire a third-party inspector or auditor to do it for you. You can choose from various inspection or audit services in China, such as pre-shipment inspection, factory audit, social audit, environmental audit, etc. These services can provide you with detailed and comprehensive reports on the company’s premises, operation, production, quality, management, etc. You can access their websites and search for the service that suits your needs and budget.
Visiting a company’s premises and conducting an audit can be costly and time-consuming, but it can also be worthwhile and beneficial. By doing so, you can have a better understanding and confidence in the company that you are dealing with.
I apologize for the mistake. Here is a revised version of the FAQ section that follows your instruction:
Frequently Asked Questions
You can ask the Chinese company to provide you with a copy of its business license by email or fax. You can also request the company to send you a scanned copy of its original business license with its official seal on it. Alternatively, you can visit the company’s premises and ask to see its original business license.
How can I get a copy of a Chinese company’s business license?
There is no definitive way to tell if a Chinese company is a factory or a trading company, as some trading companies may pretend to be factories or act as intermediaries between buyers and factories. However, there are some clues that can help you distinguish between them, such as:
Company name: A factory usually has a name that reflects its main product or industry, such as “Shenzhen XYZ Electronics Co., Ltd.” or “Guangzhou ABC Garment Factory”. A trading company usually has a name that is more generic or vague, such as “Beijing JKL International Trading Co., Ltd.” or “Shanghai MNO Import and Export Co., Ltd.“
Business scope: A factory usually has a business scope that is more specific and narrow, such as “manufacturing and selling electronic products” or “producing and exporting garments”. A trading company usually has a business scope that is more broad and diverse, such as “importing and exporting various goods” or “engaging in domestic and foreign trade”.
Registered capital: A factory usually has a higher registered capital than a trading company, as it needs more funds to invest in equipment, materials, labor, etc. A trading company usually has a lower registered capital than a factory, as it mainly relies on commissions or margins from transactions.
Website and online presence: A factory usually has a more professional and informative website and online presence than a trading company. It may showcase its products, facilities, certificates, awards, etc. on its website and other platforms. A trading company usually has a less professional and informative website and online presence than a factory. It may have fewer or no pictures or videos of its products or facilities on its website and other platforms.
Factory visit and audit: The best way to verify if a Chinese company is a factory or a trading company is to visit its premises and conduct an audit. You can check its production capacity, quality control, management system, etc. by yourself or by hiring a third-party inspector or auditor. You can also ask for samples or references from previous customers to verify its product quality and service level.
There are some steps that you can take to protect yourself from scams or frauds when dealing with a Chinese company, such as:
Do your homework: You should do your homework before you contact or negotiate with a Chinese company. You should verify its legitimacy, reputation, and performance with the methods mentioned in this article. You should also research the market and industry trends, the product specifications and standards, the customs and tax regulations, etc. related to your business.
Be cautious and vigilant: You should be cautious and vigilant when you communicate or coöperate with a Chinese company. You should not trust everything you see or hear from the company or its representatives. You should also not pay upfront or in full to the company before you receive the products or services that you ordered. You should also not sign any contract or agreement without reviewing it carefully and understanding all the terms and conditions.
Seek professional help: You should seek professional help from qualified experts or consultants when you encounter any difficulties or challenges in dealing with a Chinese company. They can provide you with valuable advice and assistance in resolving any legal, financial, technical, quality, logistic, etc. issues that may arise.
There are some tips that you can follow to find reliable and trustworthy Chinese suppliers for your business, such as:
Define your needs and expectations: You should define your needs and expectations clearly and realistically before you start looking for Chinese suppliers. You should know what kind of products or services you want, what quality standards and specifications you require, what delivery time and quantity you need, what budget and payment terms you can afford, etc.
Search for potential suppliers: You can search for potential suppliers from various sources, such as online platforms, trade shows, industry associations, referrals, etc. You should compare and evaluate the information and offers from different suppliers and shortlist the ones that meet your criteria and expectations.
Verify the suppliers’ legitimacy and reliability: You should verify the suppliers’ legitimacy and reliability with the methods mentioned in this article. You should check their business licenses, websites, online presence, credit ratings, legal status, industry recognition, reputation, etc. You should also ask for samples or references from previous customers to verify their product quality and service level.
Negotiate the terms and conditions: You should negotiate the terms and conditions with the suppliers that you have selected. You should discuss the product or service specifications, quality standards, delivery time, quantity, price, payment method, warranty period, dispute resolution mechanism, etc. You should also draft a contract or agreement that covers all the important terms and conditions and protects your interests and rights.
Monitor the production and delivery process: You should monitor the production and delivery process of the products or services that you have ordered. You should communicate and coördinate with the suppliers regularly and provide them with feedback or suggestions if necessary. You should also conduct quality inspections or audits on the products or services before they are shipped or delivered to you. You should also track the shipment or delivery status and confirm the receipt of the products or services.
You can verify a Chinese company by checking its business license number on the National Enterprise Credit Information Publicity System website. This is a government-run database that contains information about all registered companies in China. You can also use third-party verification services such as China Checkup or GloBIS to get more detailed reports on a Chinese company’s background, ownership, legal status, financial performance, credit rating, etc.
Some of the benefits of sourcing from China are:
Lower costs: China has a large pool of low-cost labor, raw materials, land, energy, etc. that can help you reduce your production costs and increase your profit margins.
Larger markets: China has a huge domestic market with over 1.4 billion consumers and a growing middle class. It also has access to other emerging markets in Asia, Africa, Latin America, etc. through various trade agreements and initiatives.
More variety: China has a diverse range of industries and sectors that can offer you a wide variety of products and services to choose from. You can find anything from electronics, clothing, furniture, toys, machinery, etc. in China.
Faster innovation: China has a dynamic and competitive business environment that fosters innovation and creativity. You can find many new products, designs, technologies, trends, etc. in China that can help you stay ahead of your competitors.
Some of the challenges of sourcing from China are:
Quality issues: China has a reputation for producing low-quality or counterfeit products that may not meet your standards or expectations. You may encounter problems such as defective goods, inconsistent quality, poor packaging, incorrect labeling, etc. when sourcing from China.
Cultural differences: China has a different culture and business etiquette than most Western countries. You may face communication barriers, misunderstandings, conflicts, delays, etc. when dealing with Chinese suppliers or partners.
Legal risks: China has a different legal system and regulations than most Western countries. You may face difficulties or disputes in enforcing contracts, protecting intellectual property rights, resolving disputes, complying with customs and tax laws, etc. when sourcing from China.
Logistic issues: China has a complex and sometimes inefficient logistic infrastructure that may affect your delivery time and cost. You may encounter problems such as transportation delays, customs clearance issues, shipping damages or losses, etc. when sourcing from China.
I hope this helps you with your FAQ section. If you need any further assistance or feedback on your content creation or optimization process for your focus keyword please let me know.
Finding reliable and trustworthy Chinese suppliers for your business can be challenging but rewarding. By following the tips in this article, you can have a better chance of finding a suitable and satisfactory Chinese partner for your business.
Sources:
- Insight Quality | How to Verify a Chinese Manufacturer: 3 Important Steps
- Fami Sourcing | How to Verify Chinese Company & Supplier (13 Methods)
- Registration China | How to check up the Chinese company – Company Verification
- Supplyia | How to Verify Chinese Supplier is Legitimate?
- Metafuro | Our 5‑Step, comprehensive process to verify Chinese manufacturers
- China Justice Observer | How Do I Know if a Chinese Company Is Legitimate and Verify It?