Summary * Challenges: Conducting due diligence in China presents unique challenges, including language barriers, internet restrictions, and decentralized information sources. * The Methodology: This practical framework, developed by Knowaco, guides the due diligence process by focusing on four key areas: Identity, Legal risk, Operational risk, and Financial risk. * Practical Guidance: The guide
The tax credit rating is a system used by Chinese tax authorities to evaluate the tax behavior of corporate taxpayers over a certain period. This rating system aims to encourage enterprises to pay taxes by the law and improve the efficiency of tax collection and management. It is also an
The Unified Social Credit Identifier (USCI, or Unified Social Credit Code / USCC ), issued by the State Administration for Market Regulation (SAMR), uniquely identifies companies and other organizations in China. It was used as an identifier in various fields, including administration, regulation, and enforcement. Background of USCI / USCC's application
In our services over the past two years, some users have raised their "pain points" when using the product - I do not understand Chinese and cannot type out the names of companies from business cards, business licenses, or photos in Chinese for searches, which greatly hinders the
The Unified Social Credit Code (USCC) is a crucial identifier for businesses in mainland China. It is a unique 18-digit ID for every registered company. Knowing the USCC is essential for navigating tax obligations, signing contracts, or verifying a business partner. But where exactly do you find this vital code?
In China, the Administration for Market Regulation (AMR) maintains a comprehensive business registration system. This system tracks each company's status, providing information about its operational health and potential risks. Understanding the eight critical business registration statuses can be crucial for making informed business decisions and assessing business opportunities.
Recently, we have added a login feature to the website. The initial design of Knowaco.com aimed to provide services with minimal user information logging. With the increase in service volume, more and more users wish to view summarized search records and purchase histories and independently and conveniently merge past
On 29 December 2023, the National People's Congress of China voted to pass the newly revised "Company Law of the People's Republic of China" (hereinafter referred to as the "Company Law"). The revised "Company Law" will come into effect on
Happy New Year! Wishing you joy, success, and endless possibilities in the year ahead. In the dawn of this new year, amidst a world of continual change and growing information complexities, where accessing information in some regions (or regarding some topics) becomes increasingly complex, our commitment remains steadfast: making public
Recent cases have shown that some exporters establish multiple companies with different names yet engage in the same business. These companies are owned and operated by the same team behind the scenes. We refer to this phenomenon as 'Shell Exporters". "Why do exporters not operate under a
A supplier’s salespeople and the company’s website always confidently tell the buyer that their factory is strong, production capacity is sufficient, and the quality is high. However, if you delve deeper into some background information about this company, you may discover that the actual situation might not be
The business license in China, as we recognize it today, has undergone a series of changes and reforms, reflecting China's rapidly evolving business environment, legal system, and commitment to streamlining bureaucratic procedures. Here's a brief history of the evolution of the Chinese company's business
As we have always advocated, an additional step of background search can help us identify negative records that have a significant impact. Recently, while assisting a client with a name search, we discovered that the related company has significant issues that might affect its delivery capability, including shareholder disputes and
Do Chinese companies have official English names? The answer to this question is no. The law explicitly stipulates that company names can only be in Chinese. According to the "Regulations on the Administration of Enterprise Name Registration," becoming effective on 1 March 2021: * A company can only register
We are thrilled to announce the launch of our exciting new type of the Instant Company Search Report - "Flex Report". Now you have the power to select the contents delivered to you based on your own unique needs and preferences, just like building blocks! At Knowaco.com,
As a service provider in company search services in China, our clients frequently ask us the following questions * "I want to know whether the business of this company in China is legitimate?", * "Is this company listed in any blacklist?", and * "Just need to know if
Risk alert
Recently, our analysts assisted one of our clients in performing a background check on an electronics wholesale e-commerce site. The observations suggest the company operating this site might use a fake business license. Worse, its business license was already revoked in May 2022. The company shows its business certificate, tax
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We do company searches and background checks every day for our clients. According to our experience, at most times, a simple Google search can reveal potential abnormal risk signals in a company's operation. Here are some examples of how background checks can help know about a company. #1
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REAL – this word has different layers of meanings. A company could be a truly registered entity but conduct fake business or exaggerate its operational strength. So, the basic level of checking a company is to verify its registration information. Further check procedures may primarily focus on a company’s business
Risk alert
In our last post, we explained why verifying a business license is not enough to avoid scams. Today our analysts noticed a real case in the news about the risk of fake business registration information. According to some domestic media in China, a few days ago, a private company named
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When doing business with suppliers, it's vital to ensure they are legitimate and trustworthy. One way to do this is to verify their business license. A registered Chinese supplier must have a company registration number (the social credit code). Using the social credit code to check the business
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Importing products from China can be a lucrative business, but it also comes with its own risks. One of the most significant risks is falling victim to supplier scams. These scams can cost you a lot of money and cause considerable stress. Here are some tips on how to avoid
Risk alert
In our recent work assisting one of our clients in performing a public domain search on a potential supplier, the Knowaco team noted that the target company was using a falsified branding image on its websites. The questionable picture shows the target company's office building and front door.
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In February 2023, the State Administration for Market Regulation authorities in the Yangtze River Delta region released the cases of severe law violations and untrustworthiness cases in 2022. Our editor selected three typical ones from the announcement as follows. 1. Shanghai Jinrui Food Co., Ltd. (上海金瑞食品有限公司) On November 25, 2021,
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Company, partnership, and representative office are China's three major organization types of foreign-invested entities. The Company Law, the Partnership Enterprise Law, and the Administrative Regulations on the Registration of Permanent Representative Offices of Foreign Enterprises govern the respective entities. 1. Company Foreign investors can set up limited liability
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1. Background The Administrative Measures for the List of Subjects with Seriously Illegal or Dishonest Acts under Market Regulation (the "List") has become effective since 1 September 2021. As early as 2014 to 2015, the State Council of China has already mentioned the backlist of companies with severe
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If two companies are connected, one may be a parent, subsidiary, fellow subsidiary, associate, or joint venture of the other, or both are controlled, jointly controlled, or significantly influenced or managed by another entity. While the two companies have no connections in the shareholding chain, they are likely related by
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A Chinese company does not necessarily have an official English name, as only a Chinese name is required by law for business registration, making it difficult to perform a background check if you are provided only with the company name in English. Some web articles may suggest you search the
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As a result of the country's efforts to streamline the process for starting a business, according to the data disclosed on gov.cn, the number of market entities in China increased to a record high of 150 million. Here we have summarized the four major types of companies
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A shell company is often without active business and significant assets and is sometimes used illegitimately. Therefore, identifying a company's actual business is an essential due diligence procedure for safe trade. 1. It lacks essential information in company search results. As the old saying goes, no news is