by Sophie Mao
While discussing how to protect yourself against trade fraud, one of our clients said: “I prefer dealing with a Hong Kong company. It is safer, at least.” However, among all frauds I have heard about, half of the victims sent money to a Hong Kong account.
Safe or not depends on what kind of Hong Kong company it is. Typically speaking, a traditional Hong Kong company is set up by business people who base their company mainly in Hong Kong. However, virtual offices are permitted for a Hong Kong company and little capital is needed. There are two kinds of Hong Kong companies.
The first type is set up by business people in other jurisdictions, for the benefit of convenience, such as free flow of funds or nearly unlimited business activities. For example, many factories in Mainland China set up a Hong Kong company to do international trade. However, another situation is that a Hong Kong company is set up by a fraud. The only purpose of the so-called Hong Kong company is to scam!
Dealing with a Hong Kong company is not a guarantee. If you are dealing with a Hong Kong company, you may pay a visit to its office, or pay someone to do so. Do not make a full payment until the goods are to your satisfaction. These are useful ways to effectively protect yourself.