Due diligence guide

How to perform due diligence on a Chinese company.

Useful due diligence is proportionate to the decision. A small sample order and a large advance payment should not receive the same level of checking, but both should begin with the correct Chinese legal entity.

1. Define the decision and the loss you are trying to prevent

Write down the transaction amount, payment terms, product, counterparty, and the claim that matters most. This determines whether you need a basic entity check, supplier verification, legal review, or an on-site audit.

2. Resolve the legal entity and ownership

Match the Chinese legal name and 18-character USCC to the current registration record. Review status, address, legal representative, shareholders, related companies, and material changes. An English brand alone is not a reliable identifier.

  • Compare the contract party with the registered entity
  • Check whether ownership figures use the same date and capital basis
  • Treat unexplained related companies as a question, not automatically a risk

3. Test operating claims and legal signals

Compare the registered business scope with the product and claimed role. Look for corroborating operating evidence such as relevant licences, patents, tenders, websites, and export or factory information where available. Group related court records before interpreting their significance.

4. Verify the transaction path before payment

Confirm that the salesperson, email domain, contract, invoice issuer, and bank beneficiary connect to the reviewed company. A real company can still be impersonated, and a valid registration does not authorize every payment instruction.

FAQ

Common questions

Is a company registration check the same as due diligence?

No. Registration confirms the legal entity and selected recorded facts. Due diligence also examines ownership, operating claims, legal signals, and the specific transaction.

Can due diligence prove a Chinese company is safe?

No. It can identify evidence, inconsistencies, and information gaps, but it cannot guarantee performance, solvency, product quality, or freedom from fraud.

When should I request an on-site factory audit?

Consider one when production capability, quality systems, or a high-value order cannot be supported by reliable documentary and independent evidence.

Next step

Start with the correct company

Search the Chinese legal name or USCC before reviewing ownership and transaction details.

Search a company