The EU SME Centre has received several enquiries concerning business partners registered in Hong Kong but stating a mainland address in the contract. This is generally the case when the actual factory and the effective seat of the Chinese partner are in mainland China while registration of the company (for different reasons – administration and taxes mostly) took place in Hong Kong. In the cases at hand, only a business licence from Hong Kong could be provided by the Chinese partner while the contract was stamped with a company chop showing a similar company name but an address in mainland China. In such cases it can be very difficult to track and decide the right jurisdiction.

In such cases, contracts would probably be considered as null when brought before Chinese jurisdiction and, when not properly executed according to Hong Kong regulations, it will be void according to Hong Kong law, too. We therefore strongly suggest paying attention not only to the name of the company and registered seat on the first page when concluding a contract, but to the last page of the contract, too, which bears the signatures and company stamps, and investigate who is authorised to sign on behalf of the company.

In another recent case, one EU SME was invited to visit the offices in Zhuhai of a potential Chinese buyer; the business license provided by the Chinese buyer was of a company in Hong Kong SAR. The EU SME questioned this approach and insisted to have the business license of the Zhuhai-based company, to have legal certainty of which is the legal interlocutor of the company. The Zhuhai company did not respond anymore to the EU SME.

At the EU SME Centre, we have many resources guiding you on how to conduct background checks and preliminary due diligence.