Vetting foreign business partners
- Marcel Hoebink
- How to
- 24 Aug 2023
- Edited 2 Nov 2022
- 3 min
- Managing and growing
Checking your business partner is necessary to conduct business abroad safely and successfully. Then you will know if your partner does business honestly and if they are reliable. And if the company is financially healthy. Whether you are buying or selling products. By checking your partner, you limit your risks.
In the Netherlands, you can check a company in KVK's Business Register. Many countries operate public registers similar to the Business Register. In these foreign registers, you can check if a company is registered. Dutch embassies abroad often know this as well. Or you can look up the company online. Before you do business with a foreign company, investigate their business dealings first. This article lists different methods for vetting your (potential) business partner.
Most countries have a business register. In the Netherlands, the Chamber of Commerce KVK manages the Business Register. Most countries have a different authority to register businesses. Germany uses several for businesses. For example, a Handwerksrolle and Gewerberegister.
A record in a business register does not guarantee that a company is trustworthy, but it does tell you if the business is legally registered in its country of origin. The register will also provide more information about the owner or management of the company. And the financial situation. . Check out the list of business in and outside Europe. In these registries you can search for the name of a company.
Economic departments of the Dutch (in Dutch) can help you with investigating foreign partners. They check if your business partner actually exists. For example, some embassies , conduct company checks, such as the embassies in Russia (in Dutch) and China (in Dutch).
Ask your foreign partners for references of companies with which they collaborated before. Contact these businesses and ask for their experiences with your potential partner. For example, does the company pay its bills on time. And does the company honour the agreements on time.
Credit reporting agencies screen companies for a fee and prepare credit reports. You can find several agencies through online search engines. These agencies have the required international knowledge and experience. They also know which information they must verify.
Check if the foreign company you want to do business with is a member of a local sector organisation. Sector organisations represent their industry and aim to build a good reputation with reliable members. Sector organisations will often set quality standards, allowing companies that meet these standards to use a quality mark. You can find out whether your business partner is a member of a foreign sector organisation by visiting the website of the organisation in question.
You can find quick information about your partner online. On the internet, you can find positive and negative reviews of your potential foreign business partner. Keep in mind that fake reviews are banned in the EU, but the situation can be different outside of the EU.
Visit their website and take a close look at their contact options. If the website only mentions a P.O. box or a mobile phone number, rather than an official branch address and landline number, you might want to investigate if the company actually exists. Also check the email address: does it look professional? Even checking your business partner’s address on Google Maps can produce surprising insights.
More and more companies buy and sell on foreign marketplaces. For example, the Chinese platform Alibaba, where you can market B2B. On this marketplace, you pay via Ideal. In addition, the platform protects buyers. For example, you can look at the number of sales of a supplier on the platform. This will tell you something about the reliability of their delivery. Also check whether the products look good in the picture. And if the foreign supplier or customer takes discussions with you seriously.Plan a visit
If possible, schedule a visit to your business partner. Then you will get a good idea of your partner's activities and procedures. A visit will also help to build a personal relationship and strengthen trust.
Before you place a larger order, ask your foreign suppliers to send . If you have customers abroad, they might ask you to do the same thing. Sample shipments give buyers a sense of the delivery time and quality they can expect. It is up to the vendor to decide whether or not to send samples free of charge. Important factors to consider here are product type, value, and intended use.
Do you want to consult an adviser on how to vet a foreign business partner? Then call the KVK Advice Team: 0800 21 17.
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