Chinese Company Verification Legalmall’s team is proud to announce that the new version of its website is under construction and will be online by January 2015! Legalmall will turn into a one stop legal shop, where all the legal services for foreign companies willing to establish a business in #China Mainland and #HongKong will be provided: Chinese companies search, factory audit, legal documents’ translation, contracts’ negotiation, business registration, certificate verification and much more. So far, our activity has focused on checking out our international clients’ business partners in China and some of them turned out to be scammers or not honest (real) suppliers. Your activity cannot legally protected by Chinese government authorities if you’re dealing with illegal Chinese companies. This is the reason why it is fundamental to verify the Chinese company that you are going to work with before starting the cooperation. Following there are my tips for you to verify a Chinese company. The best way to check out a supplier in China is to visit them in person, but due to the geography dislocation, language barriers and a different legal system, it is strongly recommended to book a third-party company verification service like Legalmall (legalmall.net). UNHONEST CHINESE COMPANIES The Chinese company you chose as your business partner may not be a proper scam but, still, it may happen that it provides with low quality products, it delivers late or it ships different quantity of goods respect to the order you placed… Following there are some tips for you to avoid such risks while doing business in China: 1. Do your Due Diligence before placing any orders Every factory or trade company has their own Business License in China and from their business license you will be able to find out all their registered information like full company name, registered capital, registration date, legal representative, business scope, company type etc. There are lot of fake business licenses online in China, this is why you have to contact local officials for verification before placing any orders, if you know nothing about Chinese, you can also book a Basic or Comprehensive Verification service from a third-party service company like Legalmall. 2. Factory Audit If your order is very large or if you’re looking for a long term or OEM factory in China, you’d better visit the company first. Legalmall offers a service of Factory Audit, whose purpose is to disclose following information: management level, facilities, export experience or qualifications, staff, labour conditions, quality control measures, R &D, after-sale service measures, bank credit details…Legalmall is entitled to inform the company that it is going to visit it only 20 minutes before, so that the Chinese company doesn’t have to time to hide or modify anything. SCAM CHINESE COMPANIES Following are listed some tips for you to make a first check on your Chinese partner even if you don’t know Chinese: 1. Registered corporate number In China, companies of any kind are required to register themselves with Chinese government authorities in order to obtain a unique company number, the so-called registration number. If your Chinese business partner cannot offer you it, definitely he is a scammer. There is always the risk that he submits you a fake number, so you have to double-check it out with local administrative government organs. There is an official organ, called Bureau of Industry & Commerce, with local offices in any Provinces, which is the only government organ responsible for the registration of legitimate enterprises in China. The only problem that you might face is that you have to report your case in Chinese because most of the local officials do not speak any or very little English. Therefore, it is always better to use the services of a Chinese legal firm with international and English-speaking lawyers like Legalmall. 2. Contact information Most of the scammers don’t offer real contact details (address, telephone and fax numbers). Hence, we suggest you to try to call them, write an email or send a fax and if the numbers are empty or don’t exist, then it is a clear sign that the company is not real. 3. Incredibly low prices Most of Chinese scammers usually attract foreign companies with low price. Therefore, it is wise, if the prices they offered are too low to believe, to consider to investigate further on your partner. Most of the scammers in China earn their profits by selling bad quality products or fakes of some branded goods to the overseas market. These activities are very risky for you, because the goods shall be confiscated or detained by Chinese customs houses when they are considered illegal in China. Never forget that the price for authentic /original brands (like Samsung, Apple, Nokia, Dell…) should be almost the same at anywhere in the world. So, if the price of such brands is much lower, it means that they are fake and of bad quality. 4. Payment and shipment terms Usually scammers don’t accept L/C as their payment terms, they prefer Western Union, Paypal and T/T etc. Also they never deliver goods through formal channels in China, they prefer to deliver samples by Express like Fedex, TNT, EMS to avoid more examinations from Chinese customs house. Consequently, if your Chinese supplier insist to use such payment and shipping methods, you should contact a company search service provider like Legalmall. In conclusion, if you are dealing either with a scam or a not reliable Chinese business partner, in order to avoid the risk to loose your money and waste your time (not to mention the fact of having a really bad experience) we advice you to contact a Chinese legal firm, specialized in international trade, intellectual property and company verification. Visit legalmall.net for a free legal consultation, we will be delighted to offer you a tailor-made solution for your problems, in order for you to take conscious business decisions.
Posted on: Fri, 28 Nov 2014 06:55:18 +0000
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