Every few months, one of my law firm's international lawyers
has to tell a client that the company or the IP the client thought
it had somewhere in the world does not exist.
About a decade ago — before China
got so much better at spotting such things — we were
retained to help a U.S. company whose China general manager had
stolen funds from its China subsidiary. Our investigation quickly
revealed there was no China subsidiary. No China entity had ever
been formed even though the China operations were manufacturing
hundreds of millions of dollars of product a year, with around 100
"employees." The general manager had lied about having
formed a WFOE, no China taxes had ever been paid, and
every "employee" had been working illegally.
