Verifying a Chinese Company in Three Easy Steps
Companies of all sizes considering doing business with Chinese companies in China can face a seemingly complex web of challenges. While the process of establishing a legitimate, legal, and profitable relationship with a Chinese company does involve a number of steps and processes, you can conduct three simple background inquiries at the beginning of your efforts to ensure the Chinese company you’re considering as a partner or investment is a valid business:
- Verifying the Chinese company
- Searching the Internet for warning signs and red flags
- Validating official documents
Verifying a Chinese company
Before you book your flight to Beijing for an on-the-ground fact-finding mission, you’ll want to check the Chinese company you’re considering is a legally registered entity with the Chinese government. The Chinese company likely will have provided you with a set of initial information. You’ll need to compare this information and documentation against official Chinese records. Your first task is to ensure that the company has a current business license, a foundational requirement for all businesses operating in mainland China.
Once you’ve determined that the Chinese company is a legitimate business entity, you then will want to conduct additional inquires on the company’s background and its registration status, including its type, establishment date, scope of business, registered capital, and its management structure including shareholders, board of directors, and legal representatives. This initial due diligence to establish that the company’s registration remains valid will provide you with the baseline information you need and inform the decisions you and your business will need to make before taking the next steps in your investigations and negotiations.
Nuna Network can help you take the first steps in verifying that the Chinese company’s background matches the information you’ve received from them, offering more than a one-time report, but a range of validation, verification, and due diligence services that help you determine the authenticity of a Chinese company.
Searching the Internet for warning signs and red flags
One of the most powerful tools at your disposal for checking that the Chinese company is legitimate rests right under your fingertips: the Internet. Conducting a quick Google search can yield valuable – and instant – information about the Chinese company you’re investigating. You’ll want to review both company-published information (websites, its self-managed social media channels) as well as any third-party information about it in the form of reviews, comments, and company profiles. In particular with third-party information, be on the lookout for information about others’ experiences with the company, especially any disturbing patterns or trends that would indicate frauds or scams. Two sites that can help you start your investigation include AlibabaScam.com, a site that publishes reports (albeit unverified) of scams; and Baidu.com, a Chinese-language site.
Validating official documents
Once you’ve verified the Chinese company is a legitimate, official business, you’ll want to turn your attention to validating its business documentation. Ensuring that the company can produce authentic, original documents remains a critical step in your early due diligence.
- Nuna Network’s certificate validation report can help you determine the veracity of the company’s documents, including:
- Bank Account Certificates
- Trademark Registrations
- Certificates such as the International Organization for Standardization’s ISO 9001 and ISO 14001; and the Occupational Health and Safety Assessment Series OHASA 18001
- SGS Certifications
- Tax Licenses
- Test Reports
- Foreign Trade Registrations for Imports and Exports
As part of this validation process, you will want to ensure the date and currency of these official documents. Verified documents can fall prey to editing and manipulation after their certification, rendering them invalid. Learn more about this in our related article titled “Certifying Chinese documents’ authenticity.”
Additional Resources
With all official Chinese business documents, it’s important to verify their legitimacy – a process that is complex and challenging.
We can help. Nuna Network helps you determine the authenticity of documents and much more, transforming the due diligence process and making it easier to establish relationships with Chinese companies.