How to Read a Chinese Factory's Business License

The business license (营业执照) is the single most-sent document in China sourcing. Suppliers send a photo of it with almost every first reply. Most buyers glance at the company name, nod, and move on. That is a mistake — the license contains more information than almost any other document you will receive, if you know what to look at.

What the license actually shows

A Chinese business license records the registered legal name (企业名称), unified social credit code (统一社会信用代码, an 18-character ID), legal representative (法定代表人), registered capital (注册资本), establishment date (成立日期), registered address (住所), and the business scope (经营范围). Every field is checkable against the national enterprise registry.

The five checks that matter

1. Name vs. what they told you. Suppliers often trade under a brand or a "foreign-facing" name that is different from the registered entity. The license tells you the legal entity you would actually contract with. If the PI (proforma invoice) is issued by a different name than the license — ask why, in writing.

2. Business scope. The scope lists the industries the company is registered to operate in. A "trading company" scope that includes "sales of electronic products" is different from a scope that includes "manufacture of photovoltaic equipment." If someone claims to be a factory, the scope should contain manufacturing terms.

3. Establishment date. A license from last year is not automatically bad — new factories exist — but it changes the risk profile. Pair the age with the volume they claim to ship. A 6-month-old company promising 10,000 modules per week deserves a few more questions.

4. Registered capital. Registered capital in China is declared, not always paid-in. Large numbers look impressive but are not proof of assets. Read it as a data point, not a guarantee.

5. Address and entity type. The registered address should be a real place you can cross-check (maps, street view, other evidence). The entity type (有限责任公司 vs. 个体工商户) tells you the scale of the business. A sole-proprietorship license can still be a real business — but know what you are dealing with.

How to verify without asking the supplier

The unified social credit code lets you look up the entity on China's national enterprise credit information system (国家企业信用信息公示系统) or any of the commercial lookups. This confirms operating status, and — for many provinces — whether the company has been flagged for abnormalities. You do not need to be in China to run this check.

The evidence-led habit

Treat the license as the start of verification, not the end. Combine it with the address check, the website, the factory photos, and a phone call. One document is a claim. Three independent documents that agree are evidence.

One document is a claim. Three independent documents that agree are evidence.

Need a full license and identity check on a supplier? The $299 verification report covers entity identity, license, address, factory-vs-trader claim, and certificate sanity — with one evidence-led verdict.

Use this as a procurement framework, not as engineering, legal or tax advice. Always confirm supplier identity, product specs and payment terms in writing.