Through this and the next three blog posts, we will introduce you to foreign web portals, where the financial reports of a foreign company can be reviewed.
Why do a background check on foreign companies?
It’s a good idea to double-check whether a new business partner is officially registered before deciding to work with them. If the company is a client of yours, you should review the foreign company’s financial statements. You’ll be able to avoid potential defaulters and fraudsters whose businesses don’t exist. Additionally, the ability to check foreign companies allows you to better understand your competition and potential business partners.
What is a balance sheet and what is an income statement?
Every year, every business, including sole proprietors, is required to prepare financial statements for the previous fiscal year. The Balance Sheet and Income Statement are the most important documents.
The Balance Sheet (a financial statement for a company) contains a lot of information about the company and shows its financial position on a particular day of the year. A balance sheet clearly shows the assets that the company manages. Long-term assets (fixed assets and long-term financial investments) are shown here, as well as current assets (receivables, cash, inventories, and investments) and other operating liabilities.
The profit or loss for the financial year or interim period for which it is compiled is shown on the Income Statement. It shows all of the company’s revenues and expenses, and the result is the business outcome, which can be expressed as a Profit or Loss.
How to do a background check on a foreign business partner?
You can use the VIES system to check the foreign partner’s company and tax number (VAT number validation). In the search field, type the country of the business partner, and in the field »VAT number«, type the tax number you want to check.
To check the financial statements of a foreign company, click on the country where your business partner has a company.
Please let us know if any of the information is out of date.
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