Essential knowledge for conducting company background checks / due diligence and understanding the findings.
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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
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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
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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
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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?
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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.
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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
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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
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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
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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
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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
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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
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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