Check The China Lawyers Credentials to Avoid Fake Law Firms

As these Chinese market turned out to be a billion dollar market for the foreign businesses and offers many business opportunities, a growing number of fake law firms are emerging. The problem appears to be nationwide and fake law firms are mushrooming throughout China as well as abroad. Foreign business are losing their money by getting duped by a bogus law house. Some scammers reportedly are stealing a law firm’s entire Web page, then changing the contact information to redirect traffic elsewhere.

The growing problem of fictitious law firms in China

The most common incident related to the fake lawyers and law firms is they built a temporary website and after a foreign client paid them money for drafting a manufacturing agreement, registering trademark or forming a WFOE, they simply shut down the website and get away with the money. After a long wait, the foreign company realises that they have been cheated by a fraudulent law firm. The alarming thing is this type of incidents have become a common and regular practice in China.

Why it is difficult to crack down fictitious law firms in China

Cracking down on counterfeits can be difficult as a maximum number of fake law firms operate from outside China. Copying techniques have improved so much that some counterfeits website of the law firms now look just like the originals. Apart from this, the laxity from the Chinese authorities to curb the problem is also another factor behind the increasing number of fake law firms.

How to check the China lawyers credentials

There is a large number of phony legal firms in China to cheat unsuspecting overseas businesses. So it is really important investigate them more in-depth than just skimming through their website.

>>  Conduct due diligence before you appoint a China lawyer, especially if you will be paying upfront for something like a China company registration or a China trademark.

>>  Rather than try to spot a fake lawyer, why don’t you go to the official websites such as acla.org.cn or ibanet.org/China.aspx and hire one that you know Is licensed. Takes a bit of a mystery out of it, but it also takes out the risk.

>>  Call the relevant bar associations or lawyer licensing bureaus to confirm the lawyer(s) you are about to use are actually lawyers. Ask him for his bar number and jurisdiction. Then verify it with the state bar.

>>  Scammers are generally bad spellers and bad grammarians. So ask your law firm to submit a possible brief remedy of case and check how professionally they have drafted the solution on paper. More than a few misspellings combined with improper verb conjugation or singular-plural problems is typically a strong indicator.

Conclusion-

To guard your IP, a competent, experienced, trustworthy Chinese lawyer is indispensable. Hope you find a real lawyer using these suggestions and that you prosper in your case and in your life.

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How WFOE Allows Complete Control of all the Business Operations in China

Building up a business presence in China offers limitless opportunities, but the success of your business lies in the correct understanding of China’s complicated business and regulatory environment. Forming a company in China is much more complex, time-taking and expensive compared to forming a company domestically. But the good news is, if your WFOE has the proper documentation and goes through the right process, it will ultimately be approved and registered to conduct business in China.

As China has become the world’s top investment destination, market experts are of the opinion that WFOE has a huge potential in China. Global companies, in their quest for new markets, can get the best out of this country. A WFOE is a 100% autonomous, financial entity, bearing lawful obligation independently. It is also worthy to note that any foreign enterprise in China that does not engage in direct business activities is not regarded as WFOE, with no exception to branches that carries out operational activities and representative offices. A WFOE can only operate within its business scope as put forward in its business license. If it chooses to engage in a different exercise than the ones specified in its Scope of Business, it is imperative to gain approval from the local authorities.

 

A Wholly Foreign Owned Enterprise (‘WFOE’) is a common investment vehicle to do business in China. Some of the traits are:

>> It is a 100% foreign owned limited liability company so the registered capital of a WFOE should be pledged and contributed solely by the foreign investors.

>> Organization form of foreign capital enterprise is mostly limited liability company, also can be called as one person limited company.

>> The registered capital of a Wholly Foreign Owned Enterprise (WFOE) should be subscribed and contributed solely by the foreign investor(s) and it can also repatriate dividends back to the parent company or shareholders overseas.

>> Foreign companies are able to operate using Chinese Yuan (RMB), meaning that any invoices and costs could be tax-deductible.

 

The establishment process of a WFOE can vary somewhat depending on the chosen structure, namely a service WFOE, manufacturing WFOE or trading WFOE and its associated business scope. Foreign investors are not permitted to directly submit the application documents of incorporate a WFOE to the relevant authority in China. They must retain a PRC entity that is authorized or permitted by relevant authorities to act as a sponsor.

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