You have three ways to investigate Chinese companies: legitimacy verification, due diligence, and on-site investigation.

This post was first published in CJO GLOBAL, which is committed to providing consulting services in China-related cross-border trade risk management and debt collection.

1. Legitimacy verification

Legitimacy verification allows you to find whether the company really exists, what its legal Chinese name is, and what its current status is.

You need to get a photocopy or a scanned copy of its business license and then check the company’s information in China’s National Enterprise Credit Information Publicity System.

Every legally registered Chinese company will have a business license issued by the Chinese company registration authority, the administration for market regulation.

The information on the business license includes the company’s legal name in Chinese, unified social credit number (just as the company’s ID number), registered capital, company type, legal representative, date of incorporation, expiration date, and business scope. On the bottom right corner, there is a red stamp of the company registration authority.

However, the business license only shows that this company once existed and cannot prove the current status of the company.

You also need to check the current status of the company in China’s National Enterprise Credit Information Publicity System at http://www.gsxt.gov.cn/index.html, a website of the SAMR.

For more information on how to use this system, you can read our article “How Do I Know If a Chinese Company Exists Legally?”.

If you find the status of a Chinese company is existing on this website, it is legitimate.

Except for existing, all others are abnormal operating status. You should try to avoid doing business with companies in abnormal operating status.

For more information on Chinese company registration status, you can read our article “Which Status of a Chinese Company Is Legit?”.

2. Due diligence of public information

Different Chinese government departments hold different information about companies and provide channels of access to the public, although they are extremely fragmented.

Through these channels, you can find out information including:

(1) Company executives and shareholders

(2) Intellectual property

(3) Administrative penalties

(4) Litigation

(5) Customs records

With the cooperation of Chinese companies, you can also find the following information at government departments:

(1) Corporate credit reports

(2) Number of employees

(3) Historical performance

For more information on due diligence on Chinese companies, you can see our article “How to Do Due Diligence on Chinese Company to Avoid Scams?”.

For our services, please see more on Verification and Due Diligence.

The Cross-border Trade Dispute 101 Series (‘CTD 101 Series’) provides an introduction to China-related cross-border trade dispute, and covers the knowledge essential to cross-border trade dispute resolution and debt collection.

Photo by Andrew Haimerl (andrewnef) on Unsplash

Contributors: Meng Yu 余萌

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