How to Read a Chinese Business License to Tell Factory from Trader
A field guide to the Chinese business license (营业执照): where the USCC, entity type and business scope sit, and which words separate a factory from a trading company.
A supplier sends you a photo of its business license (营业执照) to look legitimate. It usually is — but the licence also tells you something the supplier may not volunteer: whether the company is registered to make your product or only to sell it. Once you know which lines to read, you can tell a factory from a trading company in under a minute.
Quick answer
On a Chinese business license, read three things: the Unified Social Credit Code (统一社会信用代码) to identify the exact legal entity, the company type (类型) to see if it is a company or a sole proprietor, and the business scope (经营范围) to see what it is registered to do. Production verbs — 生产, 制造, 加工 — mean a maker; 销售, 批发, 进出口 mean trade. The scope shows intent; confirm a real factory with its permits and insured staff.
What a Chinese business license shows
Every registered business in mainland China holds a licence issued by the market regulator (市场监督管理局). The key fields:
- Company name (名称) — the exact registered Chinese name. The English name on an Alibaba profile has no legal standing; this one does.
- Unified Social Credit Code (统一社会信用代码) — an 18-character code that is the company's single national ID. Decode it with the free USCC decoder to read the entity type and registration region.
- Type (类型) — 有限责任公司 (limited liability company), 股份有限公司 (joint-stock company), or 个体工商户 (individual/sole proprietor).
- Legal representative (法定代表人) — the person who legally acts for the company.
- Registered capital (注册资本) — a declared figure, not paid-in cash. Treat a large number as a claim, not proof of size.
- Business scope (经营范围) — the heart of the factory-or-trader question.
How to read the business scope (经营范围)
The scope lists, in Chinese, the activities the company registered. This is where a maker and a reseller diverge:
- Look for production verbs first. 生产 (produce), 制造 (manufacture), 加工 (process) and 研发 (develop) describe making things. A company that leads with these registered as a producer.
- Note the trade verbs. 销售 (sell), 批发 (wholesale), 零售 (retail) and 货物进出口 / 进出口 (import-export) describe moving goods, not making them.
- Read the object, not just the verb. "生产 precision hardware" is specific to a product line. "销售 hardware products; 货物进出口" with no production item is a trading pattern.
- Paste it into a checker. Copy the scope text into the free business scope checker to see the production and trade terms separated for you.
A company whose scope is all sales and import-export, with no production item, is registered to trade. A company with clear production verbs tied to your product category is registered to make it.
Why the scope alone is not the whole answer
The business scope is self-declared when the company registers, so it signals intent, not capability. Two honest caveats before you judge:
- Factories list 销售 too. A manufacturer almost always registers "sale of its own products," and large groups often split production and export into separate entities (工贸分离). Seeing 销售 does not demote a company to trader — read it alongside the production verbs.
- 个体工商户 (sole proprietor) is not a red flag by itself. A licence type of 个体工商户, or a USCC starting with 92, marks an individual business rather than a company. Many are real one-line workshops. It changes who signs your contract, not whether the goods are good.
To move from "registered to make" to "actually makes," add the records a factory cannot fake: a pollutant-discharge permit, an insured workforce, and production-type purchases. Those are the 5 official records that prove a supplier is a real factory, and they sit at the centre of the question of whether your supplier is a factory or a trading company.
FAQ
Where is the business scope on a Chinese business license? It is the 经营范围 field, usually the longest block of text near the bottom of the licence. It lists every activity the company registered, in Chinese.
What words on the license mean it is a factory? Production verbs: 生产 (produce), 制造 (manufacture), 加工 (process), 研发 (develop), tied to a specific product. A pure trader's scope has only 销售 (sell), 批发 (wholesale) and 进出口 (import-export).
Can a company fake its business license? A forged licence exists, but the registered data is public. Decode the USCC and confirm the same name, code and scope appear in the National Enterprise Credit Information Publicity System (国家企业信用信息公示系统), then check the entity matches your invoice and contract.
Does registered capital tell me the company is big? No. Registered capital is a declared, often un-paid figure. Insured-staff count and permits are far better signals of real size.
Check the scope in one click
You do not have to read Chinese to do this. Paste any supplier's scope into the free business scope checker to see the factory and trader terms split out, and decode its USCC to confirm the entity. When you want the full verdict — scope plus permits, staff, court and invoice records — a Factory or Trader report reads them all and tells you factory, trader, combined, or insufficient evidence.