Production

1 Easy Mistake Importers Make and How to Avoid It: The Importance of having the correct Seal

What is a Business Stamp in China, and Why Do You Need One?

A business stamp, AKA  "Gōng sī hóng zhāng", 公司红章 a chop, seal and or badge, is an official mark used in China to authenticate documents and contracts. 

Business stamps are typically used for legal and financial transactions and are required by the Chinese government for various documents related to international trade.

They are the only low-cost fail-safe to keep a manufacturer honest when manufacturing or importing products from China to Australia or the world. The main reason being, due to contracts and arbitration being so expensive. 

The stamp makes sure that the manufacturer says who they say they are, this is important when dealing with trading companies, it's fine if they are an international trading company collaborating with a local manufacturer, though the stamps should match the company in the pictures on Alibaba. 

Working on any production cycles with less than 50k total value because any good lawyer in China would cost you 500-750 Aud per hour. So how long before they have eaten up most of your contract value? 

The red stamp is something that if the manufacturer says no, be warned now by us, that's not a good sign. Something is wrong and needs more investigation. All businesses have one, and all know the stamp's importance. 

Also, when dealing with the manufacturers, it is vital to be vigilant and ensure the stamp is RED, with no other colours. This is another trick I have come across before. 

So why do you need a business stamp? There are a few reasons:

  1. To comply with Chinese regulations: In China, it is required to have certain types of documents stamped in order to be considered legally binding. This includes contracts, invoices, and other documents related to international trade. If two companies are trading inter-country in China, they would both ensure each party stamped contracts or invoices. So why not for foreign trade? 
  2. To protect your interests: Having a business stamp can help protect your interests in case of a dispute or disagreement with your Chinese manufacturer. Without a proper seal, it is virtually impossible to keep a manufacturer honest. You might get lucky without though it is much more manageable when you ensure this is part of your process. 
  3. To facilitate customs clearance: In some cases, having a correctly stamped document may be necessary to clear customs and ensure that your shipments are not held up or rejected.

The Risks of Not Getting Your Documents Stamped

But what happens if you don't get your documents stamped? The risks can be significant:

  1. Problems with customs: Without the necessary stamps, customs may hold or even reject your shipments, leading to delays and additional costs.
  2. It is hard enough to arbitrate in any country and costs so much money. The goal from We Assist Co perspective is to limit the opportunity for Risk, which is another way we do that. Ensuring Partners' stamps match bank accounts and invoices, and business names.
  3. Financial losses: If things go south with your Chinese manufacturer, you could be in for severe economic losses if you need the necessary documentation to back you up. If those documents are not Stamped, then you are in trouble. 

The Process of Getting Your Documents Stamped

So how do you get your documents stamped? It's a pretty straightforward process, but it's vital to ensure everything is in order before you start. Here's what you need to know:

  1. Ask the sales agent or company leader to stamp all contracts and invoices before you pay any invoices. If you don't read Chinese, contact your local Chinese Chamber of Commerce, consulate or local Chinese community groups to check your stamps. 
  2. Every Page must be stamped. When dealing with many pages, they fan the pages out and stamp the side of each Page in one go. And the Page that is signed must also be stamped. 
  3. Contact Austrade, I have personally dealt with them before when starting, and they have agents in China whom you can contact for assistance. 
  4. Bring your documents to the China Council for the Promotion of International Trade (CCPIT): The organisation responsible for reviewing and stamping papers related to international trade.
  5. Check the requirements for stamping: Different types of stamps may be required depending on the nature of your documents, so be sure to check with the CCPIT for the specific requirements of your situation.
  6. If you are working on Alibaba, they have customer service; you can always contact the platform directly to cross-check stamps and invoices. 

Please remember RED STAMPS only. 

Getting your documents stamped may seem like a small detail, but it's an important step when importing products from China. 

Don't let a simple oversight jeopardise your business - make sure you have all your documents adequately stamped and protected.

We hope this guide has helped you understand the importance of stamping your documents when importing from China. If you have any questions or need assistance with the process, don't hesitate to contact us at We Assist Co. Our team of experts is here to help you navigate the complexities of international trade and ensure a successful import process.

This is what they usually look like - Though I have seen some other shape. I would still check with local authorities that the names match.

Share

Production
min read

1 Easy Mistake Importers Make and How to Avoid It: The Importance of having the correct Seal

What is a Business Stamp in China, and Why Do You Need One?

A business stamp, AKA  "Gōng sī hóng zhāng", 公司红章 a chop, seal and or badge, is an official mark used in China to authenticate documents and contracts. 

Business stamps are typically used for legal and financial transactions and are required by the Chinese government for various documents related to international trade.

They are the only low-cost fail-safe to keep a manufacturer honest when manufacturing or importing products from China to Australia or the world. The main reason being, due to contracts and arbitration being so expensive. 

The stamp makes sure that the manufacturer says who they say they are, this is important when dealing with trading companies, it's fine if they are an international trading company collaborating with a local manufacturer, though the stamps should match the company in the pictures on Alibaba. 

Working on any production cycles with less than 50k total value because any good lawyer in China would cost you 500-750 Aud per hour. So how long before they have eaten up most of your contract value? 

The red stamp is something that if the manufacturer says no, be warned now by us, that's not a good sign. Something is wrong and needs more investigation. All businesses have one, and all know the stamp's importance. 

Also, when dealing with the manufacturers, it is vital to be vigilant and ensure the stamp is RED, with no other colours. This is another trick I have come across before. 

So why do you need a business stamp? There are a few reasons:

  1. To comply with Chinese regulations: In China, it is required to have certain types of documents stamped in order to be considered legally binding. This includes contracts, invoices, and other documents related to international trade. If two companies are trading inter-country in China, they would both ensure each party stamped contracts or invoices. So why not for foreign trade? 
  2. To protect your interests: Having a business stamp can help protect your interests in case of a dispute or disagreement with your Chinese manufacturer. Without a proper seal, it is virtually impossible to keep a manufacturer honest. You might get lucky without though it is much more manageable when you ensure this is part of your process. 
  3. To facilitate customs clearance: In some cases, having a correctly stamped document may be necessary to clear customs and ensure that your shipments are not held up or rejected.

The Risks of Not Getting Your Documents Stamped

But what happens if you don't get your documents stamped? The risks can be significant:

  1. Problems with customs: Without the necessary stamps, customs may hold or even reject your shipments, leading to delays and additional costs.
  2. It is hard enough to arbitrate in any country and costs so much money. The goal from We Assist Co perspective is to limit the opportunity for Risk, which is another way we do that. Ensuring Partners' stamps match bank accounts and invoices, and business names.
  3. Financial losses: If things go south with your Chinese manufacturer, you could be in for severe economic losses if you need the necessary documentation to back you up. If those documents are not Stamped, then you are in trouble. 

The Process of Getting Your Documents Stamped

So how do you get your documents stamped? It's a pretty straightforward process, but it's vital to ensure everything is in order before you start. Here's what you need to know:

  1. Ask the sales agent or company leader to stamp all contracts and invoices before you pay any invoices. If you don't read Chinese, contact your local Chinese Chamber of Commerce, consulate or local Chinese community groups to check your stamps. 
  2. Every Page must be stamped. When dealing with many pages, they fan the pages out and stamp the side of each Page in one go. And the Page that is signed must also be stamped. 
  3. Contact Austrade, I have personally dealt with them before when starting, and they have agents in China whom you can contact for assistance. 
  4. Bring your documents to the China Council for the Promotion of International Trade (CCPIT): The organisation responsible for reviewing and stamping papers related to international trade.
  5. Check the requirements for stamping: Different types of stamps may be required depending on the nature of your documents, so be sure to check with the CCPIT for the specific requirements of your situation.
  6. If you are working on Alibaba, they have customer service; you can always contact the platform directly to cross-check stamps and invoices. 

Please remember RED STAMPS only. 

Getting your documents stamped may seem like a small detail, but it's an important step when importing products from China. 

Don't let a simple oversight jeopardise your business - make sure you have all your documents adequately stamped and protected.

We hope this guide has helped you understand the importance of stamping your documents when importing from China. If you have any questions or need assistance with the process, don't hesitate to contact us at We Assist Co. Our team of experts is here to help you navigate the complexities of international trade and ensure a successful import process.

This is what they usually look like - Though I have seen some other shape. I would still check with local authorities that the names match.

Share

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