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How to check a foreign client before exporting: the checklist

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In short: before shipping to a new foreign client, carry out five checks, in this order: the company exists in the register of its country, the VAT number is valid on VIES, the name does not appear on sanctions lists, the contact details and IBAN are consistent with the registered office, and you have chosen a payment method suited to the risk (advance payment, letter of credit or credit insurance). On Veryfy, the foreign company check costs 14.90€ and combines the country register data with a search of sanctions lists.

What should you check before shipping to a new foreign client?

Five things, from the simplest to the most costly. The first three take a few minutes on official sources and are almost always free; the last two determine how much risk you really run.

  1. Existence: the company is registered in the company register of its country, with the name and registered office the client gave you.
  2. VAT number: the number is valid for intra-EU transactions (VIES).
  3. Sanctions: neither the company nor its owners appear on the European Union sanctions lists.
  4. Consistency of data: email domain, website, telephone and IBAN point to the same company.
  5. Payment: the payment method is proportionate to the risk and to the terms you grant.

For an Italian client the path is similar but uses different tools: you will find it in how to assess the creditworthiness of a new B2B client before granting credit terms.

How do I verify that the foreign company actually exists?

Search for the company in the company register of its country. For European Union countries there is a single gateway: the "Find a company" service of the European e-Justice portal, which is part of BRIS (the system interconnecting business registers, provided for by Directive 2012/17/EU). According to the portal, it covers limited companies and their branches registered in EU countries, Iceland, Liechtenstein and Norway, and collects data in real time from national registers.

What you can expect to find: name, registration number, registered office and, for many countries, the list of filed documents (articles of association, financial statements, legal representatives). The portal now allows you to request only the documents that national registers provide free of charge; for paid ones it refers you to the website of the national register, where you see the final price. Some documents arrive immediately, others by email, in some cases up to 14 days later.

Compare what you find with what the client has written to you: exact company name, legal form, address. A registered office different from the one on the invoice or in the email signature is a signal to clarify before shipping. For countries outside this perimeter (for example the United Kingdom and Switzerland) you need the national register: you will find dedicated guides below.

How do I verify the intra-EU VAT number on VIES?

Enter the country and number on the VIES service of the European Commission. The tool, the Commission explains, is a search engine (not a database): at the time of the search it queries the national VAT databases.

The same Commission page recommends keeping a record of every validation, in case of a tax audit: save the screenshot or receipt together with the order file. To verify Italian VAT numbers use the "Verifica partita IVA" service of the Agenzia delle Entrate (Italian Revenue Agency); to find the VAT number starting from the name, see how to find a company's VAT number from its name.

How do I check the European Union sanctions lists?

Search for the name and owners in the two official resources that the European Commission lists on its sanctions page.

The binding text is the one published in the Official Journal: the databases are consultation tools. Check the exact name and transliteration variants, and repeat the search on the owners and directors if you know them. If the client is a company based in a third country, the search of EU lists is only part of the check: the Veryfy foreign company check also searches the name on international sanctions lists, politically exposed persons and negative media.

Which fraud signals should I check in a new foreign client?

There is no database here: comparisons are needed. Four quick checks:

Do you want the register data and the sanctions search in one step? The foreign company check costs 14.90€ VAT included for Switzerland, Spain, France, Germany, the United Kingdom and Poland: name, identifiers, registered office, status of the business, date of incorporation, NACE sector and contacts if registered, summary financial statements if available, search of sanctions lists, politically exposed persons and negative media. No subscription, no registration.

How do I get paid by a foreign client?

Choose the instrument based on the risk you have just measured. The Agenzia ICE, in its course on risk management in international trade, states that there is no import-export transaction with zero risk and that non-payment is often perceived as the main risk; it indicates advance payment as the cover generally used and invites you to consider credit insurance.

For a comparison between a policy and pay-per-check verifications see trade credit insurance or pay-per-check verification.

What payment terms can I agree and what late-payment interest applies?

The European Directive 2011/7/EU on late payment, according to the Commission's page, provides for payment of invoices within 60 days for transactions between businesses, unless otherwise expressly agreed and provided the agreement is not grossly unfair. The creditor is entitled to default interest, at least 8% above the ECB reference rate, and to a minimum of 40 euro as compensation for recovery costs. Member States may maintain or adopt rules more favourable to the creditor. The Commission has also started a review of the directive: check its updated status before writing your terms.

In Italy the directive is transposed by Legislative Decree 231/2002 (as amended by Legislative Decree 192/2012). According to a summary from a tax update website, between businesses the term is 30 days from receipt of the invoice, extendable to 60 with written agreement, and the flat-rate amount for recovery costs is 40 euro. With a foreign client the contract may be governed by a different law: state the payment terms, default interest rate and applicable law in your sales conditions, and have your adviser check the clause. If the client asks for long extensions, read client asks for payment at 90 days: how to protect yourself.

Table: risk, check, instrument

RiskCheckInstrument
The company does not exist or has a different nameName, registration number and registered office on the country's registere-Justice / BRIS for EU registers; national register; Veryfy foreign company check
Invalid VAT numberValidity for intra-EU transactions; keep proofVIES (European Commission)
Sanctioned counterpartySearch of name and owners in the EU listsEU Sanctions Map; Financial Sanctions Database; search of sanctions, PEPs and negative media in the Veryfy foreign check
Fraud (fake client, hijacked IBAN)Consistency of email domain, website, telephone and IBAN with the registered office; confirmation of changes through a known channelManual comparison with register data; internal procedure
Client that does not payChoice of payment method based on riskAdvance payment, letter of credit, credit insurance
Client that pays lateTerms and interest written into the sales conditionsDirective 2011/7/EU; Legislative Decree 231/2002

Country guides: where to look and how to read the register

Each register has a different name, language and data. These guides tell you where to search and how to read the result:

To choose which markets and which foreign clients to look at, start from the data: Italian exports, ISTAT data on client countries.

For accountants. If one of your clients asks whether it can trust a foreign buyer, the foreign company check at 14.90€ gives you, in a single document, the register data and the search of sanctions, PEPs and negative media, to be attached to the client file. It works without a subscription and without registration: you pay for the single check.

Sources

Veryfy is not affiliated with the institutions and bodies cited.

Frequently asked questions

How do I verify that a foreign company exists?

Search for it in the company register of its country. For EU countries you can start from the "Find a company" service of the European e-Justice portal (BRIS), which collects data in real time from national registers and also covers Iceland, Liechtenstein and Norway. Compare the name, registration number and registered office with what the client has written to you.

What does VIES tell me about a foreign client?

VIES queries the national VAT databases and tells you whether the VAT number is registered for intra-EU transactions. It does not return the name and address linked to the number: it can only confirm whether a name and address you provide match. An invalid number may not exist, may not be activated for intra-EU transactions, or may not yet be permanently registered. Keep proof of every validation.

Where do I check whether a foreign client is on the EU sanctions lists?

In the official resources of the European Commission: the EU Sanctions Map and the Financial Sanctions Database, the consolidated list managed by DG FISMA. The binding text is the one published in the Official Journal of the EU. The Veryfy foreign company check at 14.90€ also searches the name on international sanctions lists, politically exposed persons and negative media.

How do I protect myself against non-payment by a foreign client?

You can ask for payment in advance, use a letter of credit (issued by the bank, which guarantees the transaction) or insure the receivable. According to SACE, credit insurance protects against the client's bankruptcy, insolvency and prolonged default; the insurer may refuse clients considered too risky, and part of the receivable may remain uncovered.

What late-payment interest can I charge a European client?

Directive 2011/7/EU provides, for transactions between businesses, for payment within 60 days unless otherwise agreed, provided the agreement is not grossly unfair; default interest of at least 8 points above the ECB reference rate; and at least 40 euro as compensation for recovery costs. With a foreign client the contract may be governed by a different law: state the terms, the rate and the applicable law in your sales conditions.

How much does a foreign company check cost on Veryfy?

14.90€ VAT included, for Switzerland, Spain, France, Germany, the United Kingdom and Poland: data from the country's register, NACE sector and contacts if registered, summary financial statements if available, and a search of sanctions lists, politically exposed persons and negative media. No subscription and no registration.

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