To verify a Chinese supplier’s business license, request a colour scan of the original license, decode the 18-digit Unified Social Credit Code, then cross-check the company name, legal representative, registered capital, registered address, business scope, and status on China’s official National Enterprise Credit Information Publicity System. If any of those six fields fails to match what the salesperson told you, stop and investigate before wiring a deposit.
License verification is the cheapest step in China sourcing — free, fifteen minutes, and it eliminates a surprising share of fraud. Yet most first-time importers skip it. This guide shows what the document contains, how to read it, where to check it, and which red flags should end a negotiation.
Table of Contents
- What Is a Chinese Business License?
- The Six Fields That Actually Matter
- How to Check It on the Official Government Database
- Factory or Trading Company? The Business Scope Test
- Red Flags and What They Mean
- Three Levels of Verification and What Each Costs
- Step-by-Step Verification Process
- Practical Examples
- Common Mistakes
- Expert Recommendations
- FAQ
- Conclusion
What Is a Chinese Business License?
The business license (营业执照, yíngyè zhízhào) is the founding registration document issued by China’s State Administration for Market Regulation through its local bureaus. Every legally operating company in mainland China must hold one and display the original at its registered premises.
Since the 2015–2016 “three-in-one” reform it consolidates business registration, organisation code, and tax registration into a single certificate carrying one Unified Social Credit Code (USCC). Any license showing an old-style separate registration number is either superseded or fabricated.
Important: a business license proves a company legally exists. It does not prove the company owns a factory, has export rights, is financially healthy, or makes good products. It is step one of four, not the whole job.
The Six Fields That Actually Matter
The license is printed in Chinese only. Here is what each key field tells you and how it can be misused.
| Field (Chinese) | Meaning | What to check | Risk if wrong |
|---|---|---|---|
| 统一社会信用代码 | Unified Social Credit Code | Exactly 18 alphanumeric characters; no spaces | Fabricated or expired entity |
| 名称 | Registered company name (Chinese) | Must match the bank account beneficiary exactly | Payment diverted to a third party |
| 法定代表人 | Legal representative | The person legally able to bind the company in contract | Contract signed by someone with no authority |
| 注册资本 | Registered capital | Scale indicator; RMB 100,000 vs RMB 10 million is a real difference | Shell company with no substance |
| 住所 | Registered address | Compare with the factory address given to you | Trading company posing as a manufacturer |
| 经营范围 | Business scope | Must include manufacturing (生产/制造) if they claim to be a factory | Undisclosed middleman |
| 成立日期 / 营业期限 | Establishment date / validity period | Under 2 years old = higher risk; check the expiry date | Newly formed entity after a previous blacklisting |
| 登记状态 | Registration status | Must read 存续 (active) or 在业 (operating) | Deregistered, revoked, or abnormal-list company |
Decoding the 18-digit credit code
The USCC is structured, not random: digit 1 is the registering authority (9 = market regulation, normal for companies); digit 2 the entity category (1 = enterprise); digits 3–8 the administrative division where it is registered; digits 9–17 the organisation code; digit 18 a checksum.
Practical use: digits 3–8 reveal where the company is really registered. If a supplier claims a Shenzhen factory but the code resolves to another province, ask why.
How to Check It on the Official Government Database
China publishes company registration data free through the National Enterprise Credit Information Publicity System (国家企业信用信息公示系统) at gsxt.gov.cn. It is the authoritative source; commercial platforms resell the same data with a nicer interface.
- Open gsxt.gov.cn and paste the Chinese company name or the 18-digit credit code. English names are not registered and return nothing.
- Complete the sliding-puzzle verification, which usually loads reliably only from a mainland or Hong Kong, China IP address.
- Open the record and compare every field against the license scan you received.
- Check the tabs for administrative penalties, abnormal operation listings, and serious violation records. A company on the abnormal list has failed to file annual reports — a strong warning sign.
- Review shareholder and change-history sections. Frequent legal-representative changes deserve a question.
If you cannot reach gsxt.gov.cn, fall back to commercial databases such as Qichacha or Tianyancha, or ask a China-based partner to pull the record. For broader regulatory context, the U.S. International Trade Administration’s China Country Commercial Guide is a useful companion reference.
Factory or Trading Company? The Business Scope Test
The business scope field settles the most common argument in China sourcing. Read the Chinese characters, not the salesperson’s claim:
- 生产 / 制造 / 加工 (production / manufacturing / processing) — registered to manufacture. With a matching industrial-zone address, this is a genuine factory.
- 销售 / 贸易 / 批发 (sales / trade / wholesale) only — a trading company. It may still be an excellent partner, but it buys rather than makes.
- 技术开发 / 技术服务 (technology development / services) — typically a design, engineering, or agency operation.
- 进出口 (import and export) — export rights. Many small factories lack these and must ship through an agent, which affects your commercial invoice and VAT refund handling.
Neither model is inherently better. Traders are often more responsive and handle mixed orders; factories usually offer better volume pricing and direct process control. The problem is only ever undisclosed intermediation — paying a factory margin for trading-company service. Our supplier verification checklist covers how to test capability once legal status is confirmed.
Red Flags and What They Mean
| Red flag | What it usually means | Action |
|---|---|---|
| Bank account name ≠ license name | Payment to a personal or third-party account | Refuse to pay until names match. |
| Status shows 吊销 or 注销 | License revoked or company deregistered | Walk away. |
| Registered under 12 months ago | Possibly rebranded after disputes | Request references; pay by L/C or escrow. |
| Capital under RMB 500,000 on a large order | Thin liability cushion | Reduce order size or split payments. |
| No manufacturing terms in scope | Trading company presenting as a factory | Ask directly; renegotiate price. |
| Residential or office-tower address | No production capacity on site | Request the separate factory license. |
| Only a photo of a photocopy | Possible alteration | Request a colour scan with the red chop. |
| On the abnormal operations directory | Missed filings or unreachable at address | Escalate to a full background check. |
Three Levels of Verification and What Each Costs
| Level | What it covers | Cost | Time | Use when |
|---|---|---|---|---|
| 1. Free document check | License scan + gsxt.gov.cn record comparison | USD 0 | 15 minutes | Every supplier, always |
| 2. Paid company report | Shareholders, litigation, penalties, IP, credit history, branches | USD 50–300 | 1–3 days | Orders above USD 10,000 or new suppliers |
| 3. On-site verification | Physical visit, original license photographed on the wall, production lines, staff count | USD 300–800 | 3–7 days | Orders above USD 30,000 or long-term partners |
Level 1 is non-negotiable. Level 2 catches litigation history and ownership links a license never shows. Level 3 confirms the registered address corresponds to real production capacity, and doubles as the first step of a full factory audit.
Step-by-Step Verification Process
- Request the license properly. Ask for “a colour scan of your business license (营业执照) showing the full page and the company chop.” A cropped photo is not acceptable.
- Extract the Chinese name and 18-digit code as text rather than machine-translating the image.
- Search gsxt.gov.cn and open the official record.
- Compare all eight fields from the table above. Any mismatch is a question, not automatically a rejection — but it must be answered in writing.
- Check status and penalty tabs for abnormal listings, revocations, or fines.
- Match the bank details. The beneficiary name on the proforma invoice must be identical to the registered name or its official English translation. Never send funds to a personal account or to a name that “belongs to our finance manager”.
- Confirm export capability. If the scope lacks 进出口 rights, ask which agent handles the export declaration and whose name appears on the bill of lading.
- Document everything — the license scan, the dated gsxt screenshot, and the email confirming details. This file protects you in a payment dispute or customs enquiry.
Practical Examples
Example 1: The name that did not match the bank
A Canadian buyer was invoiced by “Ningbo XX Import & Export Co., Ltd.” but the license named a different company — “our export partner”, said the salesperson. The buyer insisted on paying the licensed entity and the order proceeded normally. Had the deposit gone elsewhere, there would have been no contractual counterparty to pursue.
Example 2: Registered capital that told the real story
Two Guangdong suppliers quoted within 4% of each other on a USD 90,000 order. One showed RMB 10 million capital and a 2009 date; the other RMB 200,000, a 2025 date, and a sales-only scope. The second was reselling the first’s output. The buyer went direct and saved 11%.
Example 3: A clean license, a dead factory
A Zhejiang supplier’s license checked out perfectly. A USD 400 on-site visit found the registered address was an office suite; production had been outsourced to an unnamed workshop after a fire. The license was genuine — the capability was not.
Common Mistakes
- Treating the English company name as authoritative. Only the Chinese name is registered — searching the English one returns nothing.
- Confusing registered with paid-in capital. It signals commitment, not cash in the bank.
- Ignoring the establishment date. A company incorporated three months ago cannot have “15 years of export experience”.
- Skipping the penalty and abnormal-operations tabs, where the useful warnings live.
- Verifying once and never again. Legal representatives and ownership change.
- Treating a Hong Kong, China registration as equivalent. Different registry; no evidence of mainland production.
Expert Recommendations
Decision framework by order value
- Under USD 5,000: free license check plus a matched bank account, paid by a method with buyer protection.
- USD 5,000–30,000: add a paid credit report and confirm export rights before signing.
- USD 30,000–150,000: add on-site verification with photos of the original license at the premises.
- Above USD 150,000: full factory audit, litigation search, and contract terms naming the licensed entity with a stated dispute-resolution venue.
Key takeaways
- The 18-digit Unified Social Credit Code is the master key — every other check flows from it.
- Business scope, not the salesperson, decides whether a supplier is a factory or a trader.
- The bank beneficiary name must match the licensed name exactly. No exceptions.
- Registration status must read active (存续 or 在业) on the day you check.
- A valid license proves existence, not capability. Pair it with an audit before large orders.
Frequently Asked Questions
How can I verify a Chinese company for free?
Use the National Enterprise Credit Information Publicity System at gsxt.gov.cn. Search the supplier’s Chinese name or 18-digit Unified Social Credit Code, then compare the registered name, legal representative, address, capital, scope, and status against the license they sent. It is free and official.
What does the 18-digit Unified Social Credit Code mean?
It is China’s single company identifier, replacing the older separate business, organisation, and tax numbers. Digit one is the registering authority, digit two the entity type, digits three to eight the locality, digits nine to seventeen the organisation code, and the last digit a checksum. Any code that is not exactly eighteen characters is invalid.
Does a business license prove a supplier is a real factory?
No — it proves the company legally exists. To confirm manufacturing, check the business scope includes production terms such as 生产 or 制造, confirm the address is in an industrial zone, and arrange an on-site visit or factory audit.
Can a Chinese business license be forged?
Yes — altered scans circulate, usually with an edited company name, capital figure, or scope. Forgery is defeated by cross-checking against gsxt.gov.cn, because the supplier cannot edit the official record.
What registered capital is safe for a supplier?
There is no universal threshold, but capital should comfortably exceed your annual order value. RMB 1 million or more suggests an established operation; under RMB 500,000 suggests a small trading entity where you should limit exposure per shipment.
Why does the supplier’s bank account have a different name?
Usually an affiliated export agent or offshore finance entity. Both may be legitimate, but verify that entity independently and record the arrangement in your contract. An account in an individual’s name is a fraud indicator — refuse payment.
How often should I re-verify an existing supplier?
Every twelve months, and immediately if the legal representative changes, bank details change, they request payment to a new entity, or a shipment is unusually delayed without explanation.
Conclusion
Business license verification is the highest-return fifteen minutes in China sourcing. It costs nothing, needs no travel, and screens out shell entities, revoked companies, undisclosed middlemen, and the most common payment-diversion scam in one pass. Get a colour scan, decode the credit code, check the official record, compare all fields, and match the bank name.
Treat it as the gate every supplier passes before samples are ordered, then layer capability checks and an on-site audit on top. Suppliers with nothing to hide send their license within the hour — how quickly they respond is itself a data point.
Need Help Sourcing Products from China?
Request a free sourcing consultation with Woosourcing. Our China-based team verifies supplier legal entities, pulls credit and litigation reports, and conducts on-site visits before you send a deposit.
Our team can help you with:
- Product sourcing
- Supplier verification
- Factory audits
- Quality inspections
- Private label manufacturing
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