A practical guide to decoding and verifying business licenses in China with confidence
License to operate
Doing business in China can be a daunting task for many non-Chinese-speaking businesses. When entering new markets, companies as they attempt to safeguard their interests are often faced with a set of seemingly competing and conflicting decisions and checks on top of navigating the language, cultural and legal differences. It is sometimes tempting to try to take shortcuts, neglect some of the basic checks, or take on face value information presented to you. In this post, we highlight a legal necessity that is designed to protect your interests and enhance your KYB capabilities in China: the Business License.
The Chinese Business Licence is a license that all entities registered and operating in mainland China must possess. Licenses are issued by the business’ local Administration for Market Regulation (AMR) and are a guarantee that the business licensed is legally able to operate in China. So essential to business practices in China that small shops regularly display them in their front window, and potential partners may, in fact, offer their license to you early in discussions without being asked. Certainly, it should be produced as soon as requested. Failure or reluctance to produce the license may be an early indication to proceed carefully and make sure that robust KYB practices and procedures are implemented.
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License Information
The format of such licenses is standardised, meaning that the same information should be contained on each:
- 18 digit Unified Social Credit Code or Chinese business registration number
- Company name
- Company type
- Registered address
- Legal representative
- Registered capital
- Date of establishment
- License expiry date/ Term of business
- Business scope
- Registration bureau/ authority
- Pitfalls and problems
All of this seems fairly straightforward, but there are some things to keep an eye out for. First, beware of forgeries!
- Check that the company name is registered in China
- Verify the date of establishment and expiry date, confirm the amount of registered capital, validate the business categories to the business scope
In short, cross-check the data on the business license supplied with the official registration record. Failure to do so might be a costly mistake.
Another issue that is likely to arise is that of comprehension. All licenses are issued in Chinese language and characters, making access to rapid, accurate, and trustworthy translation services a critical part of your operations for non-Chinese speaking businesses.
Book a 15-min demo and see how AsiaVerify accelerates onboarding, reduces false positives, and keeps you audit-ready.
