How to verify a Chinese supplier and avoid fraud

Sending money to a supplier you have not verified is one of the most expensive mistakes when importing from China. The good news: checking whether a company is legitimate is easier than it seems if you know where to look.

Verify the business licence

• Ask for the business licence and, above all, check it in the official register (the Chinese administration's National Enterprise Credit Information Publicity System, gsxt.gov.cn), not just in the PDF they send you: a document can be forged.
• Review the business scope, the age of the company and the registered capital.
• Look at the "abnormal operations" and sanctioned companies sections: if the supplier appears there, it is a serious warning sign.

Check that it really exists

• The address should be in an industrial estate; verify it on satellite maps.
• Ask for photos and video of the factory or, better still, an audit or on-site visit.
• The bank account must be in the name of the company, never of an individual.

Warning signs (red flags)

• Reluctance to send documents or vague answers to specific questions.
• Pressure to decide or pay quickly.
• A price far below the market.
• Last-minute change of bank details: the most common fraud; it usually comes from an intercepted email.
• Inconsistent details between the website, the licence and the emails.

Protect the payment

• Do not pay 100 % in advance.
• Carry out a quality inspection before the final payment.

With R'S WARE, dealing with Chinese suppliers is easier

Verifying a Chinese company in official registers, checking its real address and auditing it from Spain is difficult without someone on the ground who speaks the language. At R'S WARE we carry out supplier due diligence, detect the signs of fraud and make sure you pay the right party. You import with the peace of mind of knowing who you are dealing with.