Five names, one counterparty
The entity on the licence, the entity that signs, the entity that invoices, the name on the bank account, and the factory you were shown — often five different companies. Where the chain breaks is where deposits are lost.
Written by a practitioner with ten years of legal and asset-disposal work, including risk-control and legal functions at the head office of one of China’s largest banking institutions.
The chain
- 注册主体 — the entity on the business licence, with its 18-character unified social credit code
- 签约主体 — the entity whose seal appears on the contract
- 开票主体 — the entity issuing the VAT invoice (增值税发票)
- 收款主体 — the name on the bank account receiving your money
- 标的主体 — the factory or premises you were told is producing your order
A legitimate chain frequently runs through more than one company. An export agent invoices on behalf of a factory; a group treasury account collects for several subsidiaries; a manufacturer sells through its own trading arm. None of that is fraud. The question is not whether the names differ — it is whether each difference is documented, and whether the company that ends up holding your money has a documented reason to be holding it.
Where the breaks usually are
| Break | Ordinary explanation | When it becomes a stop sign |
|---|---|---|
| Account name differs from contracting entity | Group finance, export agent, or a factoring arrangement | A personal account; or a third company with no documented relationship to either party |
| Invoice issuer differs from signatory | A trading company invoicing for the factory it represents | The invoicing entity was registered weeks ago, or shares an address with dozens of other companies |
| Factory address differs from registered address | The plant is leased; the registration sits at a business park | The claimed factory address is a residential unit, a hotel room, or a mail-forwarding address |
| English name does not exist in the registry | English trading names are invented for overseas customers, routinely | The supplier will not give the Chinese legal name or the credit code at all |
| Claims to be a factory, scope has no manufacturing | Some traders genuinely own a line through an affiliate | No manufacturing in scope, no plant, and the site is an office |
Why this is the highest-yield check
Most prepayment losses do not involve a fake company. They involve a real company that is not the one you believed you were dealing with — a trading company standing in front of a factory, a sales agent using his employer’s licence, or an entity that is genuine but assetless while the assets sit in a sister company that never signed anything. Each of these survives a registry check. Only the chain exposes them.
What to request, in writing, before the deposit
- A full image of the business licence, matching the Chinese name you were given
- The 18-character unified social credit code, and the registered address written out in Chinese
- The exact name and seal to appear on the contract
- Invoicing details, including the entity name and tax number
- Bank details with the account holder name — not only the account number
- For the factory: the address, whether it is leased or owned, and the name of the entity operating it
Ask for these as a single pack, before price negotiation ends. A supplier that answers four of six and deflects on the account name has told you something more useful than any registry search will.
Frequently asked
Is it normal to pay an export agent rather than the factory?
Yes, commonly. Many factories cannot export in their own name and sell through a licensed trading company. What matters is that the relationship is documented and that the contract allocates responsibility for product, delivery, warranty and refund to an identified entity — ideally with the factory as a co-signatory or guarantor.
Is paying a Hong Kong company normal?
It is common for exporters to collect offshore. The consequence is structural: your contract and your payment sit with a Hong Kong entity whose assets are not the mainland factory’s assets. If the mainland operation is where the value is, an offshore payee weakens your position after a default, however ordinary the arrangement looks.
A personal account is requested. Is that ever acceptable?
Treat it as a stop. A company account in the company’s name is the baseline in Chinese commercial practice, and a request to pay an individual is the single most reliable indicator that something in the chain is being deliberately obscured — frozen accounts, tax exposure, or a counterparty that is not the entity you think.
- Licence, status and registration history
- Shareholders and related entities
- Judicial, enforcement and defaulter records
- Written conclusion with the evidence trail