Practical Answer — Supplier Verification
How to Verify a Chinese Supplier Before Paying a Deposit
By Peter Lin, Founder, China IP Gateway · July 2026
This is buyer-side legal and entity verification guidance, not a generic factory audit or QC inspection guide.
In short
Before paying a deposit to a Chinese supplier, the priority is verifying who you are actually dealing with: the correct legal entity, the correct payment recipient, and whether the entity receiving your files and your money is the one you think it is. This is not about factory audit or quality inspection — it is about legal, entity, and payment-path verification before money and files are committed.
Check the Chinese legal entity
Match contract party, bank account, invoice name, and email domain
Confirm who receives CAD, samples, packaging, or brand files
Check whether it is factory, trading company, or sourcing agent
Review payment milestones before deposit
Factory scam signals to check before paying a deposit
The following patterns — when combined — are worth pausing on before committing a payment. This is not a scam database. It is a buyer-side entity and payment-path verification checklist.
Business license refused or unavailable
A legitimate registered supplier should be able to provide their business license on request
Bank account holder name does not match the company name
Payment to an individual or unrelated entity is a significant risk signal
Contract party, invoice issuer, and payment recipient are three different entities
Fragmented structure suggests the commercial arrangement is not transparent
Wire instructions sent by personal email or changed at the last minute
Account substitution is a common fraud vector in cross-border payments
Pressure to pay quickly before documentation is ready
Urgency designed to prevent verification is a warning pattern
Supplier is not listed in China's national enterprise registry
Unregistered entity is a fundamental red flag — no legal accountability
No physical address or address does not match the registered address
Can indicate a paper company or an agent acting without disclosed principals
Note: These signals do not automatically mean fraud. They mean the supplier needs more thorough verification before payment. A Supplier Control Review can help confirm the entity, payment path, and legal structure before funds are committed.
What not to send before verification
How China IP Gateway can help
China IP Gateway can help overseas product companies review their supplier verification position before paying a deposit — including whether the Chinese legal entity has been confirmed, whether the contract and payment path are aligned, whether appropriate NNN terms are in place, and whether a Supplier Control Review is recommended before files or money are committed further.
Outcomes depend on the facts and supplier situation. No result is guaranteed.
Frequently Asked Questions
What is the first thing I should verify about a Chinese supplier?
The Chinese legal entity. Confirm the supplier's full registered name (from their business license / 营业执照), registration number, registered address, and legal representative. This is the entity that should appear on your contract, invoices, and payment records. If these don't match, you may be dealing with a different legal entity than you think.
How do I check if the payment bank account matches the supplier entity?
Ask for the bank account details in writing and confirm that the account holder name matches the Chinese legal entity named in your agreement and invoices. A payment to a different entity name — such as an agent, a trading company, or an individual — creates a gap between your contract partner and your payment record.
How can I tell if my supplier is a factory or a trading company?
Request their business license and check the registered business scope. A manufacturing factory typically lists manufacturing activities in its registered scope. A trading company will list trading or import/export activities. You can also check through China's public registry systems. The distinction matters for contract structure, tooling ownership, and file control.
Should I send CAD files or product specifications before verifying the supplier?
In most cases, no. Product-specific files — CAD, STP, drawings, BOMs, packaging specs — should not be shared before basic supplier verification and at least an NNN agreement are in place. Sharing detailed product files with an unverified entity before any agreement creates IP and disclosure risk that is difficult to undo.
What if the supplier refuses to provide their business license?
Reluctance to provide a business license is a red flag. In China, a business license is a standard public document. Any legitimate registered supplier should be able to provide it on request. Refusal or evasion may indicate the entity is not registered, is using a different entity name, or is not the actual manufacturer.
Written by
Peter Lin
Founder & China Supplier Control Lead, China IP Gateway
Peter Lin works with overseas product companies on Chinese legal entity verification, supplier-control review, and NNN and manufacturing agreement structure before production engagement.
Verify Us →Related Practical Answers
Review Your Supplier Position Before Paying
A Supplier Control Review can confirm whether the entity, payment path, files, and agreements are correctly structured before your deposit commits you further.
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