Recently one of our UAE clients lost more than 52000 USD in China due to the disappear of his supplier, which is checked out to be a very small offshore trade company from HK. This is the fifth case we have handled this year. In this case, the scammer is from a city in Anhui, he used an offshore trade company to receive money from the client, then use a 'created' fake factory in Shandong to do business. We checked out that their factory did not exist in China and they disappeared after they received the money from the clients worldwide.
Why should we be careful when dealing with offshore trade companies in China?
1.It's easy to register a HK offshore company in China.
You only need several hundred of USD to register a smallest offshore trade company in Hongkong at present.
It is reported that there are more than 200000 offshore trade companies in Mainland China at present. Most of the offshore companies are registered in Hongkong, BVI, Cayman Islands, MIUE, Bahamas, Seychelles, Panama, Mauritius etc.
2.It's difficult to trace and take legal action against them when come to a trade dispute.
As you know, China is far away from most of the offshore registration areas, the more important thing is that their laws and regulations for the same crime might be different. It is quite for the lawyers to collect business proof and take actions against them in such cases in China.
3.Most of the offshore trade companies pretend to be a big factory online but actually not.
As far as we know, at least 75% of the offshore company bosses in Mainland China are individuals and they are working alone but they normally created an impressive website and pretended to be a real big factory or a group company online in China. They will take the client to a factory that has nothing to do with them in China (partners only). It is very difficult for the foreign clients to verify their real export license and business license if they know nothing about Chinese.
The best way to stop you from future trouble is simply to book a local professional Company Verification or Factory Inspection service in China. You are free to ask us any question concerning safe and smooth business in China !
