China is the world’s largest exporter and trade nation. Since 2009, it has been the world’s largest exporter of goods.
Manufacturing goods in China is not surprising as more businesses make their products there.
Also, China’s manufacturing industry and suppliers, even sometimes a China supplier, suffer from factory scams.
Although many skilled manufacturers are located in China, it would help to be careful when sourcing business with a Chinese enterprise.
Dealing with unprofessional Chinese firms caused some imported goods to be substandard.
It is an excellent idea to do your research before depositing your money at a factory. In this article, you will understand how to verify Chinese company to avoid scams.
10 Ways to Verify Chinese Suppliers
Are Chinese suppliers legitimate? Can they produce the items you’ve ordered? Listed below are some essential points to remember when assessing a Chinese company.
1. Check the Business License
When conducting due diligence on a Chinese supplier, the first step is to verify the business license.
Checking the company’s legitimacy through a business license helps you avoid scams. If you check a supplier’s business license, you need to focus on the “Business Scope.”
The simple way to check the registration number or business license is by hiring a legal representative to verify a local Chinese company.
Suggested reading: Chinese business license
2. Verify and Search Tax Registration Number
The Chinese government has introduced an 18-digit registration number. That number is for business information in official records.
Companies have adopted this change of having a registration number across Mainland China. The 18-digit code is known as the “Unified Social Credit Code” and went into effect at the end of 2017.
There are eighteen numbers in this list, which are significant. You can also search the registration number on the local bureau or from other Chinese enterprises.
The registration number of the Chinese business license date is necessary. Numbers are following as:
- The first number= is usually a nine representing the registrar authority (AIC).
- The second number= classification of the entity (like a corporation or sole proprietorship.)
- From the third through the eighth number = registering region (highest administrative division, etc.)
- From the ninth to seventeenth numbers = organization code (old tax identification number)
- The eighteenth number= check digit
3. Search and Check The Customs Records
You need to visit the Customs District of P.R. China’s website. You must enter the company name, website, or the Unified Social Credit Code.
Always check the Chinese supplier unified social credit code. It would help if you had a Chinese business license number, taxation records, and Customs certificates.
4. Check the Chinese company’s website
To verify a Chinese supplier, you have to check the website to discover that it is valid anymore.
A business license or registration number expires sometimes. You can access a company’s record at http://gsxt.gov.cn/index.html page.
Enter the company’s name or enter the registration number for company verification. You will find the Unified Social Credit Code in the upper right corner of your business license.
5. Check the Value Added Tax (VAT) Invoice
The government of China offers a rebate on many exports to spur manufacturing and China trade activities.
But to do this, a VAT invoice must be issued, and a registered capital company can only issue such an invoice.
It would help if you got an invoice with a VAT rate of 17% from your factory contact. It may be a commercial enterprise or a scammer if your offer rejects.
6. Search Google for Warnings
You can use Google or Bing to check warnings and search the company page’s expiry date. Check for variations of “[company name] + scam,” “[company name] + review”.
Many retailers experienced bad service in a wholesale China company. Now have legal representatives in China.
Almost all B2B marketplaces provide company verification services to their users. You can use company verification to determine the actual factory of local industries.
Suggested reading: Find china manufacturers
7. Check the Products Catalogue
Generally, a Chinese company caters to a particular type of product. If the Chinese partners’ person catalog has a production capability. Then it’s a trading company.
As an example, a fabric factory would be a maker of fabrics. In trading company websites, different kinds of cloth are made.
Explore the business scope by registration number and check the Chinese business license.
Suggested reading: Product specification
8. Check the Factory Auditing Reports
Multinational official companies audit a Chinese enterprise before working with them. Conducting an audit is to avoid any bad experience.
More prominent brands can check, audit, and inspect a facility’s quality in depth. Ensure you see these audit reports before you begin working with the company.
The name and details you have in hand should match the name on the audit report.
Trading companies risk wiring money in case of no audit report after a Chinese company check.
9. Check the Certification
Many ISO 9001-certified business license companies are factories. Since this certification is unavailable to all businesses. Trading companies do not need it since they do not need it.
But, some trading companies gain this certification after China company registration. They all specialize in a single product category local industrial basic check.
To maintain strong relationships with their factories, together with outstanding customer service.
Although prices will be like those of factories, working with them will seem different.
10. Check Where Supplier Located in China
You don’t know it, but every product manufactured in China has a unique services area. As an example, you could look at Electronic products’ basic information.
Shenzhen, in Guangdong province, is the leading producer of electronic products. This city’s extensive network of electronic component registered websites is a result.
Furthermore, you need to check a factory’s location. Check on Google map-related information or Baidu maps.
Looking for a trust three-party help you to verify a local China company?
With ten professional experience, Leeline Sourcing helps buyers verify the company at the best service.
1. How do I know if a Chinese company is legitimate?
When dealing with a Chinese enterprise, it is common to verify its legitimacy. This thing is especially true if you use B2B portals like Alibaba.com.
Confirming the registration of a Chinese company or any hong kong company is essential.
You should examine the company’s registration number to ensure their qualifications.
2. What is the best way to verify China’s product quality?
Choose the enterprise you like best after getting an RFQ. Always ask them for a product sample before business in China.
A China-registered enterprise doesn’t get it right the first time on the first page. So, don’t be concerned if your selection differs slightly from your prototype.
You and the registered enterprise can also work together through this process.
3. What is the process for getting a business license in China?
The Chinese government operates a company registration system or law firm. The AIC in China requires a business license for every company in Mainland China.
Regardless of size or type of business. The relevant authorities need companies in Mainland China to get a business license.
Companies often apply to their local bureau’s industry and commerce (AIC).
4. How to verify a Chinese Company Business Licence?
You can check the address by visiting their business site. And also, you can check the registered website or san Q.R. code on the product.
When you search Q.R. code, it will show you the registered website details.
Also, check the registration number or hire a legal representative. That is to confirm business licenses details. To do business with a Chinese company, visit their business address.
Suggested reading: China suppliers
How does Leeline Sourcing help you to verify Chinese company
Chinese markets present many opportunities, but they can still be challenging to penetrate.
You can verify China’s manufacturers with the help of Leeline sourcing. Leeline is committed to providing you with complete satisfaction in the following ways.
Audit of the whole factory
To produce good quality products, Leeline ensures finding the best Chinese factories.
Representatives from Leeline are knowledgeable. Using a Leeline factory audit guarantees you.
You will be dealing with high-quality Chinese business registration details.
Performing due diligence
Leeline ensures that the company or supplier you are dealing with is trusted and reliable.
Whenever you sign contracts or make payments in China must search Leeline. They see it as your insurance plan against fraud and deception.
Obtain product samples
Leeline asks for product samples before ordering from a Chinese business. They determine if the product meets their standards.
Performing a product audit
Leeline constantly searches the address of factories to ensure the quality of the product.
Before moving to final production, they scrutinize your product.
Final Thoughts on Verifying Chinese Companies
In China, every company must obtain a business license from the government (AIC).
These licenses allow Chinese companies to operate and register in the country officially. You can verify the legitimacy of the company with the business license.
However, verifying the license is only one step in the due diligence process. Verifying your supplier is possible through sourcing agents in China.
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