How to Read a Chinese Business License (and Spot a Fake Supplier)

A business license arrives in your inbox. Red stamp, official-looking characters, a supplier saying "we are real factory." Most importers glance at the stamp and file it away.

That's the moment deals are won or lost. The license is not a formality — it's a map of who you're actually dealing with, and nearly everything that matters is printed on it. This is the line-by-line decoding, the same one professional buyers run before any money moves. It's Step 1 of a six-step system I open-sourced (VERIFY framework on GitHub — free, no signup), but the license deserves its own walkthrough because it's the single highest-leverage document in the stack.

Where to verify it for free (never trust the PDF they sent)

The version the supplier sends can be photoshopped. Pull it yourself from the National Enterprise Credit Information Publicity System — gsxt.gov.cn, run by the market regulator itself. Search the exact Chinese company name or the 18-digit code. The site is slow from overseas and some detailed views want a mainland mobile number — in practice, professionals use Qichacha (企查查) or Tianyancha (天眼查), commercial registries that mirror government data with much better interfaces and freemium tiers.

On any of these, four things end the conversation instantly:

• 经营状态 (status): anything reading 吊销 (revoked) or 注销 (deregistered)
• 经营异常名录 — flagged for failing annual reports or an unverifiable registered address
• 严重违法失信 — the serious-dishonesty blacklist
• 行政处罚 — administrative penalties; patterns matter more than a single civil dispute

Now the license itself. Nine fields matter to a buyer.

1. 统一社会信用代码 — the 18-character national ID

Every Chinese company carries one. It encodes the registration authority, entity type, six-digit region, a nine-digit organization code, and a check digit computed with the ISO 7064 MOD 31-2 algorithm.

Your move: copy it into gsxt or Qichacha and confirm it resolves to the same company name. Fabricated licenses fail exactly here — the code doesn't exist, or belongs to someone else. Also check the issue date: a "20-year-old factory" whose code resolves to a company registered last year is lying about something.

2. 企业名称 — the name formula

Chinese company names follow a legal pattern: region + chosen name + industry + organization form. Take 深圳市×××实业有限公司:

• Region (深圳市): where the company is registered. A Dongguan factory with a Shanghai-registered company is common (HQ + plant) — but the addresses should connect.
• Industry word: 实业 hints at manufacturing, 贸易 says trading outright, 科技 is the favorite label of companies that are neither. A hint, not a verdict.
• Organization form: 有限公司 = limited company. 厂 or 个人独资企业 = sole proprietorship — unlimited liability for the owner and weaker paperwork discipline. Not a dealbreaker; a reason for tighter contracts.

The name is not the verdict. The business scope below is.

3. 法定代表人 — the legal representative

Your sales contact is usually not this person — that's normal. Two things matter:

• The bank account you wire to must carry the company name — never the legal rep's personal account, never the salesperson's account. Personal-account payment requests are the classic laundering move; it's red flag #2 in the toolkit.
• If the legal rep of the "factory" is also the legal rep of five shell companies in the registry, you're looking at a serial shell operator. Qichacha shows these affiliations automatically.

4. 经营范围 — the business scope (the one field that catches most fakes)

This is where trading companies pretending to be factories unravel. The scope lists what the company is legally permitted to do:

• 生产 / 制造 in the scope → they may manufacture
• 销售 / 批发 / 进出口 only → they are legally a seller, not a maker
• Scope mentions "electronics" but your quote is for stainless steel cookware → they're operating outside their license, or reselling someone else's production

5–9. The rest, quickly

• 成立日期 (registration date): young companies aren't scams, but a 3-month-old company claiming "10 years of exports" is a story with a math problem
• 注册资本 (registered capital): largely symbolic since China dropped paid-in requirements — but ¥50,000 backing an $800,000 order deserves a raised eyebrow
• 住所 (registered address): cross-check against the factory address; a residential tower address for a "factory" is a quiet fail
• 营业期限 (operating period): usually 长期 (indefinite); an expiry date inside your production window is an interesting conversation
• The stamp: every license carries the red company seal — compare its characters against the company name field character by character. Lazy forgeries miss this.

The four-name cross-check (do this before every first order)

The single most effective routine in the whole system — run it in ten minutes:

1. Name on the business license
2. Name on the PI / proforma invoice
3. Name on the bank account they want you to pay
4. Name on the Alibaba/1688 storefront

All four should match or transparently connect (a documented HK trading entity is fine if disclosed). Three names that don't match = the classic laundering triangle. Walk away.

What this catches in the real world

• The "factory" that is a 2-person trading company renting a showroom
• The mid-tier manufacturer claiming in-house production while outsourcing to a workshop you never see
• The serial shell operator whose current incarnation is 6 months old
• The photoshop license — instantly, for free, before any money moves

The full system — six verification steps, ten red flags, twenty-five email templates (including the exact message that gets a license in your inbox on day one) — is open-source: awesome-china-sourcing on GitHub.

Verify first. Wire later.