More frequently, we were asked by foreign companies to provide a basic background check of a Chinese company, as the foreign company might want to form a joint venture with that Chinese company. Usually, the client would like to know whether the Chinese company and the agent that introduced them to this Chinese company are credible. So, what will be the scope of this basic due diligence? The following is usually sufficient to give a good picture of the potential joint venture partner.
- Verifying the company information;
- Obtaining internal company records of the Chinese company., from the local Administration of Industry and Commerce (AIC);
- Verifying the relationship of the agent/director/shareholder with this company;
- Checking available databases of the Chinese courts and AIC for any offense records of the company; and
- Checking on the internet for any news or comments about the company and/or individual.
- Visiting the company premise for a site inspection on the general impression and operation of the company.
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