How to verify Hong Kong Offshore Company
 

Keywords: contact information, company registration, shell company, physical presence, telephone number, address, Hong Kong, Mainland China
 

Many of you have come across Hong Kong-based companies that have address and contact info in mainland China only (mostly in Shenzhen or somewhere else in Guangdong Province), they are Hong Kong-base offshore company.

The reasons for people in southern China to set up companies in Hong Kong mainly are:

1) Hong Kong is tax heaven so many companies set up companies in Hong Kong to avoid tax;

2) Hong Kong has loose company registration regulation compared with mainland China so it is easy for many individual to set up a shell company there. The cost for setting up an offshore company in Hong Kong is around RMB10000.

The danger for dealing with an offshore/shell company in Hong Kong is that they don’t have a physical presence there in Hong Kong, in that case, if any dispute arises from the transaction, you will have nobody/entity to make remedy against in Hong Kong, meanwhile you are also not protected in mainland China as you are dealing with a company in Hong Kong.

So how can I tell if a Hong Kong-based company is an offshore company or a real Hong Kong company? Here are some clues:

1) Call their telephone number in Hong Kong to see if anyone answer it (be aware that the phone might be transferred to some place in China by virtual office service provider in Hong Kong);

2) Visit their address in Hong Kong if you can, that is always the best way to tell the shell company, make sure you visit them secretly as virtual office service provider also provide temporary office for those shell company.

3) Mostly they have a company account, but they open account in small foreign bank. State-run banks like Bank of China, Commercial and Industrial Bank of China, China Construction Bank, Agricultural Bank of China are very strict in opening company account. In mainland China, a company account in state-run banks are way safer if you are going to pursue your rights in mainland China.
 

Source: http://www.chinawhy.net/blog/Article.asp?id=38

 

 

 

 

 

 

 

 

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