How to Verify an Overseas Supplier Before You Pay a Deposit

A deposit is often the first real money you send to a new supplier. On a first order with a factory abroad, 30% up front is common, and some suppliers ask for 50%. Once that money leaves your account, getting it back is slow and sometimes impossible. A court case in another country costs more than most first orders are worth.

So the checks have to happen before you pay. This guide walks through what to check, in order, with the free official tools you can use. Most of it takes a few hours, and the early steps catch the most common problems.

Why the deposit is the point of no return

Before the deposit, you can walk away at no cost. After it, the supplier holds your money and you hold a promise. If the goods are late, wrong or never made, your leverage is whatever is left of the balance.

Payment fraud makes this worse. The FBI's 2025 Internet Crime Report counted 24,768 complaints about business email compromise in 2025, with reported losses of just over $3 billion. In these cases a criminal gets into an email thread, or copies it closely, and sends new bank details. The buyer pays a real invoice into the wrong account. The supplier was genuine, but the money is still gone.

That gives you two separate questions to answer:

• Is this company real, and is it the company I think I am dealing with?
• Is this payment going to that company, and only to that company?

Every step below answers one of those questions.

Step 1: Get the exact legal name and registration number

Sales people use trading names, brand names and marketplace shop names. None of these is the legal entity that will sign your contract and receive your money. Ask the supplier for:

• The full registered legal name, in the original script if it is not in English
• The company registration number or tax number
• The registered address and the factory address, if they are different
• A copy of the business licence or certificate of incorporation

Write these down in one place. You will compare them against every other document you get, from the quote to the invoice to the bank details. Many problems show up as small mismatches: a slightly different name on the invoice, a different city on the licence, or a bank account in the name of another company.

Step 2: Check the official company register yourself

A scan of a business licence proves very little. Licences are easy to edit and easy to borrow from another company. Look the company up in the official register of its home country, using the number you were given.

Some registers you can use for free:

• China: The National Enterprise Credit Information Publicity System (often called GSXT) shows records for companies registered in mainland China. Search with the 18-character Unified Social Credit Code from the business licence, or the exact Chinese name. The English name usually returns nothing. The site can be slow or hard to reach from outside China, so allow time.
• United Kingdom: Companies House lets you search by company name, number or officer, and shows filing history.
• European Union: The European Commission's VIES service tells you whether an EU VAT number is valid for cross-border trade. It does not tell you whether the company is good to deal with.
• India: You can check a GST number on the GST portal, and an exporter's Importer Exporter Code on the DGFT site.

When you find the record, check:

• Status. Is the company active? In China, a licence that has been revoked can still look normal on paper. Look for words like revoked, suspended or deregistered.
• Age. A company set up three months ago that claims 15 years of export history needs a good explanation.
• Business scope. Does the registered activity match what you are buying? A trading company registered for "consulting services" selling you machine parts is worth a question.
• Address. Does the registered address match the licence and the address on the quote?
• Legal representative or directors. Note the names. You will screen them in step 4.

If the record does not match what you were sent, stop and ask the supplier to explain in writing. A mismatch does not always mean fraud. Companies move and change names. But you should get an answer you can check before you pay.

Step 3: Find out whether you are dealing with the factory or a middleman

Many suppliers that look like factories online are trading companies. That is not a problem in itself. Trading companies can combine small orders, handle export paperwork and manage several factories for you. The problem is when you think you are buying direct and you are not, because then you do not know who controls quality or who holds your deposit.

Ask direct questions:

• Do you own the factory that will make this order?
• If not, which factory makes it, and can we see that factory's licence?
• Who will issue the commercial invoice, and who will receive the payment?

Check the answers against the register. A factory's business scope usually covers production of the goods. A trading company's scope usually covers sale and import or export. Ask for a live video call that walks from the office to the production line. A pre-recorded factory tour can be from anywhere.

Step 4: Screen the company and its owners against sanctions lists

If the supplier, its owners or its bank are on a sanctions list, paying them can break the law in your country, whatever the quality of the goods. Banks screen payments too, so a match can also mean your money gets frozen in transit.

Check the company name, the legal representative or directors, and any parent company you know about. Search with spelling variations and, where you can, the name in the original script. Useful free tools:

• The US Treasury's OFAC Sanctions List Search
• The US government's Consolidated Screening List, which combines several US export and sanctions lists in one search
• The UK Sanctions List
• The EU Sanctions Map, which shows EU measures by country

Which lists apply to you depends on where your business is, where your bank is, the currency you pay in and the goods. If you trade often in higher-risk regions or goods, get advice from a trade compliance professional. Keep a record of what you searched, when, and what came back.

Step 5: Look at the company's footprint and history

A real exporter leaves a trail. Spend 30 minutes looking for it.

• Website and domain. Use ICANN Lookup to see when the website's domain was registered. A domain created a few weeks ago for a company that says it has exported for a decade is a warning sign.
• Email. Does the sales contact use an address on the company's own domain, or a free webmail account? Free email is common with small suppliers, but it makes impersonation easier.
• Search the name. Search the legal name and the trading name with words like "complaint", "fraud" and "scam". Also search the phone number and the street address. Scam operations often reuse the same details across several fake company names.
• Shipping history. In some countries, import records are public or sold by data providers. If a supplier says it ships to buyers in your market every month, those shipments may show up.
• Marketplace profile. If you found the supplier on a B2B marketplace, check how long the account has existed and what checks the marketplace says it ran. Treat a badge as one data point. It shows what the marketplace checked, on the date it checked.

Step 6: Get trade references from other buyers, and check them properly

The best evidence of how a supplier behaves is what happened to buyers who already paid them. Did goods ship on time? Did the bulk order match the sample? How did the supplier handle a defect claim?

The usual way to get this is to ask the supplier for two or three customer references. That is worth doing, but know its limits. The supplier picks the referees. Friendly customers, related companies and made-up contacts all look the same on a list. If you use supplier-provided references:

• Find the reference company's contact details yourself, from its own website or register entry. Do not use the phone number or email the supplier gave you.
• Ask specific questions. How many orders? What deposit did you pay? Were shipments on time? Did the second order match the first? How were problems handled?
• Ask whether they would order again on the same terms.

Independent references are stronger, because the supplier did not choose who wrote them. TradeRepute collects trade references from verified businesses, and each one has to be backed by documents such as invoices, bills of lading or contracts that show the two companies traded. You can read how verification works and the review standards behind them. A reference is still one buyer's experience. Read several, check the year each was written, and weigh them with everything else in this guide.

For a shorter, supplier-specific list of what to ask about, see our guide to vetting an overseas supplier.

Step 7: Test with a paid sample and a written specification

A sample shows what the supplier can make when it tries hard. It does not prove the bulk order will match. Still, a paid sample is cheap and tells you a lot:

• Write a specification before you order the sample: materials, sizes, tolerances, finish, packaging and labelling.
• Pay for the sample, including shipping. Suppliers take paid sample orders more seriously.
• Keep a signed and dated "golden sample" that both sides agree is the standard for the bulk order.

Put the specification and the golden sample in the purchase contract. If a dispute comes later, this is what you will point to.

Step 8: Confirm the bank details by phone before every first payment

This step stops most payment fraud, and it is the one people skip when they are busy.

Before you pay a deposit:

• Check that the account name on the bank details exactly matches the legal name you verified in step 2. An account in a person's name, or in another company's name, needs a written reason you can check. Do not pay until you have it.
• Check that the bank's country matches where the supplier is based. A Chinese factory asking to be paid into an account in a third country is a reason to stop and ask.
• Call the supplier on a phone number you found yourself, from the register, an earlier verified contact or the company switchboard. Do not use a number in the email that sent the bank details. Read the account details back and ask them to confirm.
• Write down who you spoke to, when, and on what number.

Repeat the call any time the supplier asks to change bank details, however routine the reason sounds. "Our account is being audited" and "please use our other account this month" are classic lines in payment fraud. Real suppliers understand a callback.

Step 9: Choose payment terms that match the risk

The size of the deposit is something you can negotiate. The US International Trade Administration's guide to methods of payment explains the main options. Cash in advance puts all the risk on the buyer. Other methods move some of that risk:

• Smaller deposit, balance against documents. For example, 30% deposit and 70% when you receive a copy of the bill of lading. You pay most of the money once the goods have shipped.
• Balance after inspection. Make release of the balance depend on a passed pre-shipment inspection by an independent firm that you choose and pay.
• Documentary collections. Banks handle the shipping documents, but they do not guarantee payment.
• Letters of credit. The bank's promise to pay depends on the supplier presenting the right documents. This costs more and takes more paperwork. It is common for larger first orders.

Agree the delivery terms clearly too. The ICC's Incoterms rules set out who pays for transport and when risk passes from seller to buyer. A mismatch between your payment terms and your Incoterm can leave you paying for goods you do not yet control.

For a first order, keep the amount small enough that losing the deposit would hurt but not sink your business. Build up order size as the supplier proves itself.

Step 10: Inspect before the balance leaves your account

A pre-shipment inspection checks a random sample of finished goods against your specification before they are packed into the container. Inspection firms usually pick the sample size using AQL tables based on the ISO 2859-1 sampling standard. You agree the acceptable defect level in advance.

Book the inspection yourself. Do not let the supplier choose or pay the inspector. Ask for photos, measurements and a clear pass or fail result. If the goods fail, you still have the balance as leverage to get them fixed before they ship.

Red flags that should stop the deposit

Pause and dig further if you see any of these:

• The legal name on the bank details does not match the company on the register
• The bank account is in a person's name, or in a country that has nothing to do with the supplier
• Bank details change by email, especially close to the payment date
• The register shows the company as revoked, suspended or very new
• The price is far below every other quote you have
• The supplier pushes you to pay today to "hold the price" or "keep the production slot"
• The supplier refuses a video call, a factory visit or an independent inspection
• The licence, quote and invoice show different names or addresses
• References can only be reached through contact details the supplier gave you

None of these proves fraud on its own. Each one deserves a clear answer before money moves.

Keep a supplier file

Save everything you checked in one folder for each supplier: register screenshots with dates, sanctions search results, the phone confirmation of bank details, references, the specification, sample photos and inspection reports. This helps the next person on your team who places an order. It also gives you evidence if something goes wrong, whether you deal with your bank, an insurer or a lawyer.

Suppliers change. Owners sell, factories move, and good companies hit hard times. Run the bank detail check before every payment to a new account. Run the register and sanctions checks again before big new orders, or once a year for suppliers you use often. Our counterparty due diligence checklist sets out a repeatable routine you can use for buyers as well as suppliers. If you sell abroad too, see how to verify a foreign buyer before you ship.

Disclaimer

Business-to-business trade references for due-diligence purposes only. Not a credit report, credit rating or legal, financial or investment advice. References are the opinions of verified reviewers. Reviewers are anonymous to the public and the reviewed company. Evidence is reviewed but accuracy is not guaranteed; companies may dispute a reference privately.