Verifying a Chinese Company: Licences, Registries, Chops and Scam Patterns

A Chinese company's business licence (营业执照) is issued by the local Administration for Market Regulation and shows the registered Chinese name, the 18-digit Unified Social Credit Code, the type of entity, the legal representative, the registered capital, the registered address, the date of establishment, the business term and the business scope. Ask for a scan at the first contact. Then check three things: that the code exists in the public registry and belongs to the name shown; that the business scope covers manufacturing (生产) or wholesale (批发) of what you are buying, not only 'technical consulting'; and that the company has existed for more than a few months.

Chinese companies have no official English name; the English name on a website or quotation is a translation and can be anything. The registered Chinese name is the identity. A quotation, a contract, a proforma invoice and a bank account should all carry that Chinese name.

The National Enterprise Credit Information Publicity System (gsxt.gov.cn) is the official, free registry: search by name or code for the licence data, shareholders, changes of legal representative or capital, administrative penalties, abnormal-operation listings and annual reports. It is in Chinese; a browser translation is enough for the fields that matter. China Judgments Online (wenshu.court.gov.cn) publishes court decisions; the Supreme People's Court's list of dishonest judgment debtors (失信被执行人) shows companies that have not paid enforced judgments — a listing there is disqualifying.

Commercial platforms — Qichacha, Tianyancha, Aiqicha (Baidu) — aggregate the registry data with litigation, patents, trademarks, affiliated companies, beneficial owners and risk scores, in Chinese with partial English versions and cheap subscriptions. They answer the questions a licence cannot: who else does the legal representative control, has the company sued or been sued over quality, and is the 'factory' actually a trading company registered in an office building.

Registered capital (注册资本) is the amount shareholders have committed; under the 2024 Company Law it must be paid in within five years, and the registry shows subscribed and paid-in amounts. It is not a measure of turnover, but a claimed large manufacturer with 100,000 yuan of capital deserves questions. The legal representative (法定代表人) is the individual who can bind the company and whose name appears on the licence; a change of legal representative shortly before your order is worth asking about. Shareholder records show whether the company is owned by an individual, a parent group, a state entity or a Hong Kong holding — relevant for credit, for sanctions screening and for who to talk to when things go wrong.

Chinese companies act through their official seal, the company chop (公章), registered with the police; contracts and invoices carry it in red ink. There are also a financial chop, a contract chop, an invoice chop and the legal representative's personal chop. A contract stamped with the company chop in the registered name binds the company; a signature alone is weak evidence. Ask for the chop on the contract, and compare the name in the chop with the licence.

The bank account is where fraud concentrates. Pay only to a corporate account whose name matches the licence, at a Chinese bank (or a Hong Kong account of a related company named in the contract). Refuse personal accounts, accounts of 'our finance company', and any change of account details announced by e-mail — confirm such changes by telephone through a number obtained independently. Business-e-mail-compromise fraud, where a hacked or spoofed mailbox sends 'new bank details' just before the balance payment, is the single most common way importers lose money in China.

For any relationship that matters, someone should stand in the factory. A supplier audit by an inspection company — SGS, Bureau Veritas, Intertek, TÜV, QIMA and Chinese firms — verifies the licence on site, photographs the premises, machinery and production lines, checks certificates (ISO 9001, BSCI or Sedex social audits, product certifications), counts workers, reviews quality processes and reports capacity. A video call walking the floor is a useful cheap first step and a poor substitute for the audit, since it shows what the host chooses to show. Trading companies often present a partner's factory as their own; the audit asks whose name is on the factory's licence.

The patterns repeat. The non-existent supplier: a marketplace listing, a licence scan copied from a real company, a personal bank account, disappearance after the deposit. The bait and switch: samples from a good factory, production from a bad one. The bank-details change described above. The 'holding fee' scam aimed at exporters: a Chinese 'buyer' invites the foreign seller to sign a contract in China and asks for notary fees, gifts or a banquet the seller pays for, then vanishes. The trademark squatter: a partner or an agent registers the foreign brand in China and sells it back. The escrow impersonation: a fake platform page asking for payment outside the marketplace.

The defences are the same for all of them: registry check, name matching across licence, contract, chop and bank, no payment to individuals, no unverified account changes, samples and inspections, and a first order small enough to lose.

For distributors, joint-venture partners or acquisitions, verification becomes investigation: financial statements and tax records (obtained through the counterparty, verified through the audit firm), site visits to several locations, interviews with customers and suppliers, sanctions and export-control screening of the company and its owners, litigation history, intellectual-property holdings, licences and permits for regulated activity, environmental compliance, and the reputation of the principals — commissioned from a due-diligence firm with staff in China. Chinese data-security and personal-information rules constrain what can be collected and moved abroad, so the work is done by licensed local providers.