Featured Practical Resources: A Practical Checklist for Verifying an International Business Partner

Finding a potential buyer, supplier, distributor or investor is an important first step. However, before exchanging money, shipping goods or signing an exclusive agreement, both parties should verify that the proposed partner is genuine, capable and suitable.

This is particularly important in trade between the Netherlands and East Africa, where distance, different legal systems and unfamiliar commercial practices can make verification more difficult.

The following checklist can help businesses reduce the risk of fraud, non-payment, delivery failure and unsuitable partnerships.

1. Confirm the legal identity

Request the partner’s full registered business name, physical address, registration number and tax identification number.

Dutch companies can be checked through the Netherlands Chamber of Commerce, or KVK. East African companies should be verified through the appropriate national business-registration and revenue authorities.

Make sure that the company name appearing on invoices, contracts and bank accounts corresponds with the officially registered name.

A difference does not automatically indicate fraud, but it should be explained before proceeding.

2. Identify the owners and authorised representatives

Confirm who owns or controls the business and who is legally authorised to sign contracts.

Do not assume that the person communicating with you has authority to commit the company. Request written confirmation where necessary, particularly when dealing with large orders, exclusive distribution rights or investment proposals.

Check whether the owners, directors or representatives are subject to sanctions or significant legal restrictions.

3. Assess commercial capability

A registered company is not necessarily a capable company. Ask whether the prospective partner has the staff, facilities, technical knowledge and financial resources required to perform the proposed work.

Depending on the transaction, request:

• Product catalogues and technical specifications

• Photographs or videos of facilities

• Production or storage capacity

• Quality certificates

• Import or export licences

• Information about logistics arrangements

• Evidence of insurance

• Details of after-sales support

• Examples of previous projects

Where the order is important, consider arranging an independent physical inspection.

4. Verify references and trading history

Ask for references from customers, suppliers, banks, freight forwarders or professional advisers.

Contact the references independently. Do not rely exclusively on telephone numbers or email addresses supplied in a document without checking them through another source.

Useful questions include:

• How long have you worked with the company?

• Were deliveries completed on time?

• Did the products meet the agreed specifications?

• Were invoices paid as agreed?

• How did the company respond when problems occurred?

5. Examine financial reliability

For a substantial transaction, request recent financial statements, bank references or credit information where legally available.

Look for warning signs such as unexplained changes in ownership, frequent changes of address, unrealistic order volumes or requests to make payment to an unrelated individual or company.

Newly established businesses should not automatically be rejected, but the payment structure should reflect the higher level of uncertainty.

6. Confirm product and regulatory compliance

Before placing an order, determine which party is responsible for product registration, standards certification, labelling, customs documentation and import permits.

For products entering the European Union, requirements may include food-safety controls, maximum residue limits, traceability, packaging rules, sustainability information and due-diligence documentation.

For products entering an East African country, the importer may need national permits, conformity documents, certificates of origin and other customs documentation.

European buyers increasingly expect suppliers to demonstrate responsible conduct throughout their supply chains. The OECD recommends a risk-based due-diligence process covering business operations, supply chains and commercial relationships. OECD due-diligence guidance.

7. Start with a controlled transaction

Avoid committing immediately to a large order or long-term exclusive agreement. Begin with samples, a trial order or a clearly defined pilot project.

The first transaction can be used to evaluate:

• Product quality

• Delivery time

• Customs documentation

• Communication

• Unexpected costs

• Complaint handling

• Payment reliability

Scale the relationship only after the partner has demonstrated consistent performance.

8. Put the agreement in writing

A commercial agreement should clearly state:

• Products or services to be supplied

• Specifications and quality requirements

• Price and currency

• Payment conditions

• Delivery terms and Incoterms

• Inspection and acceptance procedures

• Insurance responsibilities

• Confidentiality and  intellectual-property protection

• Dispute-resolution procedures

• Duration and termination rights

For important transactions, ask a qualified legal adviser to review the agreement.

Warning signs that require further investigation

Proceed cautiously when a prospective partner:

• Uses only a personal email address

• Refuses to provide registration documents

• Demands urgent payment without adequate documentation

• Requests payment into an unrelated bank account

• Promises unusually high profits or unrealistic prices

• Avoids video meetings or physical inspections

• Provides information that cannot be independently confirmed

• Pressures you to sign an exclusive agreement immediately

One warning sign may have a reasonable explanation. Several warning signs together should be treated seriously.

Download and use the checklist

Businesses can convert the points in this article into a simple “yes, no or further action required” checklist. Assign every unresolved question to a responsible person and set a deadline before approving the transaction.

A promising commercial opportunity should proceed only when the partner’s identity, capability, compliance position, and payment arrangements have been verified.

Join the conversation

How do you verify an international buyer, supplier or distributor?

Share your experience in our discussion section, contribute an article, or submit a practical checklist or detailed document for review and possible publication.