Services · Licences & special services

Counterparty check in China

Chinese government registers, court records and blacklists in one report with conclusions.

What a China counterparty check is and who needs one

A counterparty check in China means collecting and cross-checking data on a company through official Chinese sources before you sign a contract or send an advance payment. The goal is straightforward: confirm that the legal entity exists and is active, that it is registered for the business it claims to do, that the person signing has authority to sign, and that the company is not trailing a history of lawsuits, unenforced judgments and regulator flags.

The service is for you if you are buying from a new supplier and paying a deposit; entering a distribution, licensing or manufacturing agreement; going into a joint venture; receiving payment details that do not match the name on the contract; or already dealing with a missed delivery and trying to work out who you are actually facing and whether litigation is worth it.

Here is what the check does not do. It does not guarantee the goods will arrive on time or at the promised quality - registers show legal status, not production discipline. It does not replace a factory audit: if it matters that the plant physically exists and can handle your volume, someone has to walk the floor. It does not recover money already sent. And its value drops sharply if your counterparty is not a mainland Chinese entity but a Hong Kong or offshore layer, where registers and disclosure rules are different. If such a layer sits in the chain, review its accounts separately - see audit and accounts for foreign companies.

What we check: documents, registers and sources

We need very little from you to start: the company's exact Chinese legal name, or its 18-character Unified Social Credit Code. English names are not legally registered in China - they are a shopfront, and searching government databases by them returns nothing. If you have a scan of the business licence, send it: simply reconciling that scan against the register already filters out some forgeries.

• Registration data. Chinese legal name, unified code, incorporation date, registering authority, registered address and current status: active, suspended, in liquidation, revoked.
• Registered capital. The register shows subscribed capital, which is not necessarily paid in. Under the Company Law as amended with effect from 1 July 2024, shareholders must pay up subscribed capital within five years of incorporation; companies formed before that date have a transition period until 30 June 2027 to bring their contribution schedules into line. The practical takeaway: an impressive figure in the register means little on its own.
• Management and shareholders. The legal representative, who acts for the company and carries personal liability, plus shareholder and shareholding data to the extent it is disclosed.
• Business scope. The registered scope shows whether this is a trading or a manufacturing company. If the scope covers only trade, sales and import-export while the company presents itself as a factory, that gap needs an explanation.
• Foreign trade rights. Not every manufacturer can export directly; many use a licensed foreign trade agent. That is not a violation in itself, but it explains why a third party appears on the invoice and the export declaration.
• Lists and flags. The register maintains an abnormal business operations list - companies unreachable at their registered address or failing to file annual reports - and a serious violations list.
• Courts and enforcement. Public judgment databases and the court enforcement disclosure system, including the list of dishonest judgment debtors.
• Administrative penalties. Published sanctions, spot-check results and revoked permits.

The primary source is the National Enterprise Credit Information Publicity System (gsxt.gov.cn), operated by the State Administration for Market Regulation. We also use the Credit China platform and court databases. All of them run in Chinese, some require captcha verification, and several are only reliably reachable from inside China. That is the main reason do-it-yourself checks usually go nowhere.

How the check works, step by step

1. Short briefing - same day. What the deal is, how much is at stake, which documents you already hold and what worries you. We also decide here whether a basic check is enough or an extended one is warranted.
2. Entity identification - 1 business day. We pin down the exact Chinese name and unified code. If all you have is an English name or a marketplace profile, this step can take longer, and sometimes ends with the discovery that no registered entity sits behind the shopfront.
3. Government register extraction - 1-2 business days. Registration data, status, capital, management, business scope and abnormal operation flags.
4. Courts and lists - 1-2 business days. Judgments, enforcement proceedings, debtor lists and administrative penalties.
5. Reconciliation with your documents - 1 business day. Does the contracting party match the payment beneficiary, the chop on the agreement and the exporter on the shipping documents? Mismatches here are the single most common way money disappears.
6. Report with conclusions - typically business day 5-7. A structured document: what is confirmed, what is not, what raises questions, and what we recommend doing before you pay.
7. Translation and debrief - on request. We translate the findings from Chinese into English or Russian and walk you through them on a call.

These timings are indicative. They stretch over Chinese holiday periods, when government services and courts run on reduced schedules, and when there is almost no starting data on the counterparty. We give you a specific timeline after the briefing and fix it in writing along with the quote.

How much a counterparty check in China costs

Basic access to Chinese government registers is free of charge, so you are paying for our work: identifying the entity, extracting and reconciling the data, checking courts and lists, interpreting the results and writing the report. Any official documents, notarial or consular acts that turn out to be needed are paid to the state and billed on top.

Prices are indicative and cover our work on a typical case. We confirm the exact quote in writing after a short call - you know the final number before we start. Government fees and bank tariffs are billed separately unless explicitly included.

Risks and red flags: where the money usually goes

Almost every lost-deposit story out of China rhymes. These are the signals that make us tell a client to hold the payment.

• Payment details do not match the counterparty. The contract names one company, but you are asked to pay another entity, an individual, a Hong Kong company or an account in a third country. The explanation about accounting convenience sounds reasonable right up to the moment you need the money back.
• Recently registered company. A young entity is not forbidden, but a large contract with a company a few months old is a reason to demand security and to split payments.
• Token capital against a large deal. Especially where the declared capital has never been paid in.
• Business scope does not match the pitch. A pure trading company calling itself a factory is at best an intermediary and at worst an empty shell.
• Abnormal operations flag. The company could not be found at its registered address, or it stopped filing annual reports.
• Unenforced judgments. If your counterparty is already on the dishonest debtor list, your claim will most likely join the same queue.
• No company chop, or the wrong one. In China the corporate chop binds the company, not a manager's signature. A contract without the correct chop is a weak document.
• Refusal to show the business licence. A legitimate supplier sends it within minutes.

The check has its own limits, and we state them plainly. Registers describe the past and update with a lag. An absence of lawsuits does not prove good faith - it may simply mean nobody ever got as far as court. Some shareholder and financial data is not publicly disclosed in China at all. And a bad-faith operator can re-register under a fresh entity: a clean record on a one-year-old company sometimes means a new shopfront rather than a spotless history.

How we work

We do not promise a safe deal - that is not within our power. We promise a clear picture: what documents confirm, what they do not, and what decisions follow from that. Every report includes a section on what could not be verified. Leaving it out would make the report prettier and useless.

We work to a fixed quote agreed in writing before we start. If the first step reveals that no entity exists behind the name, or that there is not enough data to search on, we say so immediately rather than after issuing the full invoice. If the findings call for a next step - a site inspection, deal structuring, contract work or dispute support - we tell you what that looks like.

See also licences and special corporate services and the full list of services.

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