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Tips on China company verification part 1

Filed Under:Trade general|     Viewed by: 5803 Persons

The main users of Chinawhy are small business, who either don't have enough resources or don't have enough money to conduct a pre-transaction verification on potential suppliers. Search Ask Steven forum and Alibaba forum, we will see that a lot of scams and disputes could have been avoided if we could have some general ideas and knowledge on how to verify a China-based company. Based on our years experience on company verification, we would like to share the following tips with our fellow users while emphasizing the need and importance for official company verification(include site visit and check with local Administration of Industry and Commerce) if your purchasing value is relatively big.

Company Verification Tips

1) Always send money to business account instead of personal account
Unlike other countries, China introduce strict regulation on company formation, so if we can verify a company is real, then it is relatively safe to trade with them. Every companies in China should have a business account or company account if they are real and legit. Company account is the most important indicator to judge whether a company is real or not.

Some may ask what is company account and what is personal account and what is the difference? Good question. I will give you an example to show you the difference.

If an account goes like this, it is a personal account:
Beneficiary name: Zhou Jianming(my name)
Bank name: Industrial and Commercial Bank of China
Account No.: 35000********************
Swift Code:ICBKBJHLJ

And this is a company account:
Beneficiary name: Harbin Freedom Energy Sootblowing Co., Ltd (a company name)
Bank name: Industrial and Commercial Bank of China
Account No.:35000********************
Swift Code: ICBKBJHLJ

Just check if the beneficiary name is a person or a company, so that is pretty easy. All the companies should have a RMB company account, while those export-oriented company should have a multi-currency company account to receive foreign currencies. Export-oriented company means those companies who have applied and been approved the right of import and export.

These days I have been helping an American customer sourcing for electronics, the following story is a good example on how to tell the fake company out of real company by insisting on paying to company account only. When my customer give me the company info of the potential supplier, I am not sure if they are real company or not if I don¡¯t verify them properly, so I use this trick, I ask my customer to insist on paying to company account instead of personal account, the supplier respond that they are small company so don¡¯t have company account, it is a lie, every company should have company account since it is formatted, and I instruct my customer to ask them for their RMB company account and said we will pay through our agent in china to their RMB company account, then the supplier say they have the RMB company account, no problem. But later they say that the tax is very high so they use personal account instead of company account. Good excuse. Actually many private company do use personal account to avoid tax. But in this case, I want my customer to push on to see if they have a company account, by which to check if they are a real company. So my customer ask how much is the tax? And he could cover the tax for trial order. The supplier said 30%, and I by then can tell he is not a company, but a individual, a liar. Normally the tax is about 4%, if you want a VAT invoice, they will add 17%.       

 

Related articles:

Tips on China company verification part 2

Tips on China company verification part 3

Tips on China company verification part 4

 

Chinawhy have verified more than 200 companies since 2006, our company verification service covers most part of Mainland China. For detailed information, please call us on 0086 451 8825 5968 or email us at support@chinawhy.net, or simply place your order at here.

Comments

17 Responses to " Tips on China company verification part 1 "

  1. Susheel on  DEC   23th , 2010 18:56 PM

    Hi Friends, Please help me to verify about HK HongDa Technology Co.Ltd, Address: - Factory: Long Industrial Park, Chaoyang District,Shantou City, Guangdong Province, Office:Sheng Shirong Quanxiu Road, Quanzhou City TeL:(086.595)22265955 TeL:(086.595)22221830 Owner of this Company :- LIN LIMING

  2. Kai on  DEC   19th , 2010 17:59 PM

    Yes this company is a fake and dangerous peoples in their practices. www.usb2010.com after we have discover their fraude and copies products for high tech and that they sale as original products and offer very very unreal low cost.... then the girl name is JANET threated me and injured me and said she will find me and will send her friends to me... Email/MSN:avstar-trade @hotmail.com so becareful about this company who is a real scam :) classic in China for such scam company! thanks to publish this company and email to a maximum sites like Alibaba and others sites you know! also when you see the name of their website with year 2010 written you can see that it is a scam because it is not intelligent from this fake company to write in his website 2010 like it is new website promotion for cients to be cheated :) best regards.

  3. Abe on  DEC   18th , 2010 23:57 PM

    is this company real, can I work with them http://www.dxlaser.cn/trustpass_profile.html I'm not sure can someone help me

  4. Iurii Datsiuk on  DEC   15th , 2010 2:4 AM

    Please, is this company real, can I work with them 1. www.heenmas.com 2.www.eyetronicc.com 3.www.usb2010.com 4.kingcorp-one.com Thank you

  5. zeeshan sarwar on  DEC   8th , 2010 22:30 PM

    hi please can you check http://www.usb2010.com or http://www.heenmas.com are genuine companies or not ? thanks waiting for your comments

  6. nick wendell on  DEC   3th , 2010 13:40 PM

    I was wanting to know if this is a real company or a scam. There name is lemo technology there CR certificate of Incorporation # is 1354031.Can you help thanks.They are trying to sell me mini netbooks.

  7. vrajesh shah on  DEC   2th , 2010 2:27 AM

    please send me the deiales of Qihuanfu Trade Co., Ltd. from No. 367,liba Place, Huanshi Dong Lu, Fenghan District, Quanzhou,China i want to buy some goods from him is the safe to send him payment of that

  8. vladimir on  DEC   23th , 2010 23:15 PM

    CAN CHECK UP THIS SITE

  9. Victor on  DEC   2th , 2010 20:36 PM

    Thanks a lot for your information. You have been very helpful. I want to buy mobile phones from china. Can you please help me check if these companies are real or fake: Company: Qihuanfu Trade Co., Ltd. TEl: 086- 1520-595 0464 Address: No. 367,liba Place, Huanshi Dong Lu, Fenghan District, Quanzhou,China and Company Name: Marui International Electronic Co., Ltd. Company Address: No.601,Dongfang Mansion,Mawei Areas ,Fuzhou city, Fujian China City/Province: Fujian Country/Region: China Zip/Postal Code: 360000 Telephone Number: 86-5946639332 Fax Number: 86- 5946639332 web:http://www.gotobuybuy.com

  10. Hemant Patel on  DEC   12th , 2010 19:15 PM

    Thanks for alot for providing such most usefull information to new beginners.It is highly apprecialble and I salute to yoiur work,

  11. Jo on  DEC   10st , 2010 10:39 AM

    Hi, How do I determine a freight company is athentic or not? Also shipment forwarder company athentication is required. Most of them offer services but no site or proper location. How can I verify if my goods are shipped to me or being stolen in a clever way? Thanks, Jo

  12. KK Wang on  DEC   3th , 2009 10:8 AM

    Hi it's very good of you to explain it so clearly, we are a provite team doing quality inspection in China, we have no formal company registrtion yet but soon we will, we are doing good inspection job for our customers. You are also welcome to contact us for inspectionin China. http://kkwang.blogsome.com

  13. mubarak on  DEC   25th , 2009 4:10 AM

    please i want to know if these company is real or fake golden wise electronics co ltd in china www.gloden-wise.com or topgrand.cn they said they are gold suppliers on ali baba

  14. nambirajan on  DEC   4th , 2009 0:21 AM

    I wants to know whether this company is the original or its a scam..? can you please mail to me, if you know about it.. Below are the details of that company. Address: 12/F West Seat,Times Square,No.28 Tianhe North Road, Tianhe District, Guangzhou City, Province:Guangdong Postal code:510000 China Phone:+86-20-32791471 Recipient Email:bst86@live.cn

  15. Lenden on  DEC   11th , 2009 19:26 PM

    has anyone heard of Elec technology. what they, fake or real.

  16. morris on  DEC   26th , 2009 17:20 PM

    no website just a customer

  17. KANI ELECTRONICS WORLS TRADE COMPANY on  DEC   26th , 2009 17:18 PM

    i want to know if this is a real and company i can trust.

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