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Is it safe to pay a Chinese supplier's Hong Kong account, or one in a different name?

Last updated: · By Sarah Liu, Thornfield Resources

Short answer: paying a Hong Kong company for goods made in mainland China is common and not a red flag by itself. The risk is paying a company that is not the one you contract with. Pay only a company account (never a personal one), make the account holder a named party to your contract or get a sealed letter from your contracting company authorising the payment, and check that the Hong Kong company really is linked to the factory. If none of that is possible, do not pay.

Why do Chinese suppliers ask to be paid in Hong Kong?

Many mainland manufacturers set up a Hong Kong company to receive foreign currency, run a showroom or deal with overseas customers, and many Hong Kong exporters are trading companies working with mainland factories. QualityInspection.org, a long-running sourcing site, calls a Hong Kong company name with a mainland office address "weird but very common, and not a red flag in itself".

The problem is legal, not cultural. If your contract is with a mainland company and you pay a separate Hong Kong company, each can say the other is responsible. A claim against a Hong Kong trading company with no assets is worth little, while the factory that holds your goods and moulds may owe you nothing on paper.

Which accounts are acceptable and which are not?

Account you are asked to payRiskWhat to do
Mainland company, same legal name as your contractLowestCheck the name character by character against the business licence
Hong Kong company that is itself your contracting partyModerateCheck it exists, how old it is, and whether it is linked to the factory
Hong Kong company, but your contract is with a mainland companyHigh until fixedMake it a party to the contract, or get a sealed authorisation from the mainland company, and confirm the link
An individual's personal accountVery highDo not pay. A business supplier has no good reason to be paid personally
A company in a third country you have never heard ofVery highDo not pay until you have independent confirmation

How do I check that the Hong Kong company is linked to the factory?

  1. Ask the supplier to explain the link in writing: is the Hong Kong company the export arm, a shareholder of the factory, or an independent trader?
  2. Search the Hong Kong Companies Registry to confirm the company exists, is live and when it was set up. A company set up a few weeks ago deserves more questions.
  3. Check China's official register (gsxt.gov.cn) for the mainland factory's shareholders. If the Hong Kong company owns part of the factory, it will appear there.
  4. Get a sealed authorisation: a letter on the mainland company's letterhead, with its company seal (公章), instructing you to pay the named Hong Kong account for a named invoice.
  5. Write it into the contract: list the bank account holder and account in the contract, and make both companies responsible for delivery.

The mismatch between the contract name and the account name is exactly what invoice fraudsters exploit, so a supplier with a genuine structure will not mind these questions. See also what to do when a supplier changes bank details.

Invoice name and bank name don't match?We check both companies, how they are connected, and whether the account belongs to the right one, in Chinese.
Full Supplier Check · £450

Is paying the mainland factory directly better?

For legal leverage, usually yes. A contract signed and sealed by a mainland company with assets, paid to that company's mainland account, gives you the clearest claim if something goes wrong, because a Chinese court can act against the assets of the company it is sued. Some smaller factories cannot easily receive foreign currency, which is one honest reason they use a Hong Kong or trading company. In that case, the safeguards above matter more.

Common questions

Is it safe to pay a Chinese supplier's Hong Kong account?

It can be, if the Hong Kong company is your contracting party or is authorised in writing by it, exists on the Hong Kong register and is genuinely linked to the factory. It is unsafe if none of those can be shown.

The invoice is from one company and the bank account is in another name. Should I pay?

Not until you have a sealed letter from the invoicing company authorising that account, and you have confirmed it by phone on a number you already had. Different names are the most common sign of payment fraud.

Why would a supplier ask me to pay a personal account?

Sometimes to avoid tax or currency controls, sometimes because it is a scam. Either way, you would have no claim against the company. Do not pay a personal account for business goods.

Can Thornfield check the Hong Kong company too?

Yes. The Full Supplier Check covers the mainland company and the Hong Kong company you are asked to pay, and the link between them where public records show it.

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