Introduction:

As business and trade continues to expand all throughout the world, more and more business opportunities arise. Companies abroad often seek to solve business problems that others might have, to solve issues for such clients.

• • • Additionally, as business expands throughout the world, the need for materials and products also expands as well. One big country that holds an abundance of materials and products is China.
    • Getting supplies from China has always been a priority for many businesses, due to China’s advantages in cost and quality.
    • But as more and more companies open in China, not all companies may follow their word, some may even be a quick cash-grab to momentarily collect profit.
    • To make sure that the company you’re working with in China is real or legitimate, you must verify the company.
    • Here, we will provide a step-by-step guide on how to verify a Chinese company.

Verifying company information is important

Why does Chinese Company Verification Matter?

As China expands their market to global enterprises and other countries, there is a lot of growth in businesses. China’s rapid economic development and more businesses opening allows risk and benefits to arise.

• • • Verifying Chinese companies credibility allows you to minimize the risk of losing money when doing business with these “companies.”
    • You can mitigate financial risks and build connections with actual legitimate companies.
    • Verifying real companies leads to business relationships that can extend very far.

A look at at physical company verification licenses

Challenges in Chinese Company Verification

Language Barriers

In China, the common spoken dialect is mainly Mandarin. For a foreigner in America, they most likely are not exposed to this language. Here is why there are problems with that:

• • • Chinese documents are written in Chinese and can be very hard for foreigners and companies abroad to understand.
    • The legal papers in China are in Mandarin and you must understand the terms when signing papers.
    • Almost all official documents and business records are written in Mandarin and knowing to read these is crucial to seeing if a company is legit.

Consulting translators to understand Chinese

Decentralized Records

Chinese documents and company information are not as straightforward to find. Here are problems with that:

• • • Chinese companies have a decentralized nature of business records and their databases and records are scattered in different local government offices.
    • Obtaining these records can require in-person consultation at the right government offices and that also opens the problem with language barriers.
    • Businesses seeking potential suppliers must go through this tedious process of finding all the documents scattered everywhere.

Certifications of business in China

Business Differences

China operates their business in different structures, such as different business laws and regulations. Here are issues with that:

• • • A foreign client would not understand all of China’s business regulations and compliances, which would make it hard to verify companies.
    • Getting a hold of a Chinese company’s financial reports, to verify actual company cash flow, is difficult as it is not as straightforward as in America.

American man and Chinese man consulting about differences in business

Trust The Company But Must Verify:

As discussed above, verifying companies using this database is very important to seeing if the company actually operates in China legitimately. Without checking these details, you can fall for scams from companies that don’t actually operate at all.

• • • On the outside, companies may seem very legit and have approachable sales people, but on the inside, it can be a scheme.
    • Companies who have very approachable and communicative salespeople can give the idea that the company is real, but it can be an act to just get your payment and then leave.
    • It is okay to trust a company based on your communication with them, but you must verify the company before sending any payment or further business.

Make sure to perform due diligence or even factory visits

Steps to Take to Verify a Chinese Supplier: Addressing the Issues

Verify Official Chinese Name

Chinese companies are often represented in government offices and files through their official Chinese name. Company registration is conducted exclusively in Mandarin and has no English details.

• • • To verify a supplier, you must know their Chinese name, which you can find through contacting a company directly or other sources.
    • Business licenses have the Chinese companies name in Mandarin and getting ahold of that from a company allows you to see that name.

Chinese company stamp that shows legitimacy of document and certification

Identify the Province of the Registration

To find specific documents or licenses of Chinese companies, you must know what province the company is related to. This allows you to get a hold of the licenses and certificates for verifying a company.

• • • Local provincial records update frequently with the company information and licenses/registrations.

Large map of the different provinces and regions in China

Using Government Websites for Company Verification

Chinese companies use the website, National Enterprise Credit Information Publicity System (NECIPS), which is overseen by the State Administration for Market Regulation.

• • • This site holds all the licenses and information of businesses, along with details like full legal name of company and their establishment date.
    • Getting a hold of this data is crucial to verifying that the company actually operates to the date and shows all their activity, even illegal ones.

The NECIPS used for China company verification

Identify the Company’s Legal Representative

In China, every business that is legitimate has an appointed legal representative. This individual is responsible for performing duties for a company that is related to the law and articles of association.

• • • Look at the SAIC records and use the NECIPS to find the legal representative.
    • Using the individual’s name, try to see if there is illegal activity or suspicious behavior that is “covered.”
    • Communicate with the legal representative and request any type of documentation to make sure that the representative is legit.

Make sure that the documents are legit as well, as companies can possibly fake these registration.

Consulting the legal representatives in China to make sure company is legit

Obtain Legal Documents and Certificates:

Getting a hold of a business registration certificate shows if a company is legally registered to operate in China.

• • • The industrial and commercial registration certificate allows you to see if the company is registered to operate and perform duties in China.

Legal business certification

Ongoing Monitoring and Risk Mitigation:

If you passed all these steps and have developed more trust for a company, you must make sure that the company is 100% legit. Don’t just send your payment even if you performed all these steps, you should have a specific timeframe of regularly checking in with the company and seeing any updates.

• • • Regularly check a company’s documents and business licenses, to make sure that they’re continually operating.
    • Keep communicating with the legal representative for any missing documents they may not have given you.
    • Have a translator continually make sure that the legal representative is giving you answers to your questions

Verify a Chinese Company With:

To avoid the troubles of having to verify a Chinese company yourself, you can also seek help from experts that verify companies for you. CAMAL Group helps you find suppliers in China and perform due diligence and research on the companies for you. CAMAL Group can perform the verification for you in a fast turnaround and connect you with the company.

How We Can Help With Company Verification:

• • • CAMAL Group operates in China, with workers who speak fluent Chinese and English, offering complementary translation within our services.
    • We can help interpret what legal representatives are saying and answer your questions.
    • CAMAL Group has operated in China for several years and has connections to lots of suppliers and companies in China. We know that most suppliers and companies can give you honest answers.

CAMAL Group assisting with factory visits

• • • CAMAL’s Procurement Solutions
    • A list of the services that CAMAL Group offers in finding the right supplier for you
    • We can verify suppliers and companies for you through in-person factory inspections, to show the legitimacy of a company.
    • We can provide free samples from supplier companies and perform tests to make sure that the material you’re looking for is the right quality.

Our multinational team understands our customers and suppliers

Conclusion:

While finding companies in China and performing verification can be difficult, the processes are crucial to making sure that the company you’re looking for in China is legitimate. You can prevent scams from occurring if you take these necessary precautions. Here’s a summary of how to verify a company:

• • • 1) Look up the company on the NECIPS to check the authenticity of the company.
    • 2) You can find a company’s legal name, their registration number, date of establishment, registered capital, and annual inspection status.
    • 3) Verifying a company can save you additional costs from scams and link you to credible sources in China who do actual business.
    • 4) Hiring a company who verifies suppliers for you can also help because of their knowledge of how business works in China.

CAMAL Group factory visits before sourcing

How can CAMAL help you manage your China Sourcing?

✅ Do you spend too much time finding the right manufacturers in China?

✅Do you face difficulties in communicating your requirements to suppliers in China?

✅ Do your products often need customization just for you?

✅ Do you wish someone could help you with end-to-end procurement, so you can focus on growing your business?

If your answer is YES, Reduce Your China Sourcing Headaches, Contact Us Now for a FREE Consultation

✅CAMAL: Quality Factories = Quality Products = Happy Customers✅