How to Determine If a Foreign Company Is Legit

Whether you are a manufacturer, customs broker, exporter, importer, logistics expert or warehouse specialist, at some point you will receive an inquiry from an overseas company that expresses interest and asks you to do something big. It could be any of these scenarios:

• "Can you warehouse my product in your facility?"
• "I'd like to buy 50,000 of your 'be cool' signs."
• "We are preparing to export 50 container loads of decorative ceramic planters throughout the year and need a customs broker. Can you assist?"

These all sound intriguing and ripe with opportunity, but how do you know if the foreign company is legitimate? Short of jumping on a plane and visiting in person, here are seven ways to find out.

Ask the Foreign Company for References

You want three references of businesses that are located in a foreign country where the inquirer operates. Request a company name, address, contact name, email address, telephone number, and Skype ID. If the foreign company is not legit, it won't respond. If it only provides one reference, that is cause for concern. Obviously, if it's a start-up, it will have very few references to furnish, but it should tell you this right at the outset.

Communicate With an American Embassy or Consulate General

Let's say your inquiry comes from St. Petersburg, Russia. Go to the Consulate General of the United States St. Petersburg, Russia and ask about the company-how long has it been in business, reputation, size of the company (employees and revenues), etc.

Explain in great detail why you are contacting them and why you need their help. You might even go so far as to ask if they would like an update after discussions progress. This is a precaution in case something goes wrong because then you have support-possibly even on the ground to guide you along the way. (For information on U.S. embassies and consulates, visit: https://www.usembassy.gov/.)

Check Industry Sources, Including Big Banks, Law Firms and Accounting Firms

If you bank with J.P. Morgan Chase, for example, reach out to the bank to discover what it can find out about your inquiry on your behalf. If nothing comes up, that's a red flag. On the other hand, should the bank have information showing a history of transactions over a long period of time, that's a positive sign-proceed with caution and hope for the best.

Do a Google Search

If nothing pops up, that's a problem, especially if you never receive any references. Even if you find the foreign company on the Internet, go through steps No. 1 through 3 to verify and check the legitimacy of the firm. Further, does the foreign company have merely a free blog that is used as a website or does it have a strong online presence: website, blog, Twitter, Facebook, LinkedIn and Google+ accounts that are all active? The more current they are, the greater the chance the firm will be legit.

Conduct a WHOIS Network Solutions Search on Their Domain Name

If it is shown, that's a good sign, but if it's not, it's cause for concern. Check Network Solutions' WHOIS search for domain registration information.

Call the Overseas Company

It sounds so old-fashioned to pick up the phone and call someone, but you'd be surprised at how fast you can determine whether someone is on the up-and-up just by whether he/she answers the phone or even if the number is in service. Give it a try. You have nothing to lose other than a bit of your time and the cost of the call.

Look at Websites Where Countries Are Listed With Limited or No U.S. Visa Services

That should give you an indication that a particular country is temporarily not your best choice to do business with regardless of whether a firm is legit or not. 

One last detail that is often overlooked and factors into the solvency part of your inquiry is how financially sound is the foreign company? That's a different question that requires a separate article, which is coming soon. Watch for it. Meanwhile, to minimize your risks, collect fees in advance for your work via a bank wire transfer.