Overseas investments can be very lucrative but only if you know what you are getting into – and how to look for warning signs of fraud. With up-and-coming economies, China and India are two popular places for worldwide investing and in many cases, the deals are made honestly on both sides. Like any good thing where there is money to be made, scammers in China and India lurk, just waiting for a chance to pull the wool over investors’ eyes. And criminals are doing so successfully on an very frequent basis.
Don’t be a victim of fraud. Protect yourself by understanding the full scope of financial investment in India and China, either as an individual or business. Make not mistake, where there is risk there is potential reward, but those who do their research and due diligence have a better chance at success.
Understanding India and China. In December, Indian diplomat Devyani Khobragade was strip-searched in New York after being accused of visa fraud and lying about the amount paid to a housekeeper. The manner of arrest sent Indian people into an uproar and was just the latest example of strained relations between the Asian nation and the U.S. Chinese relations are also tense. Despite the Obama administration’s attempts to strengthen Chinese ties, a feud with Japan over a remote island chain has stalled talks with the U.S. You do not need to know every minor detail when it comes to politics in each country, but you should be aware of the issues that could impact your investments. It is always good to remember that Americans are not always viewed in the best light, particularly on the political level.
Assuming things in China and India work as they do at home can be a costly mistake. Even in the U.S. or U.K., transparency is not always a given. It ofen takes significant research and investigation to verify a business even within your own borders. Now, consider two huge markets and countries on the other side of the globe, with a different language and culture, and huge populations and limited public records, and you can see the risk. Without the help of a trained professional, an investment is a shot in the dark.
So what is the risk, really? What’s the worst that can happen? Great question and the obvious answer is bankruptcy, serious financial loss, damage to your personal or company reputation, and even jail time. The most common of course is the loss or theft of your investment, large or small, or even identity theft or theft of your company data and trade secrets. The possibilities for fraud are endless!
Criminals are increasingly using professional looking websites to scam victims, Linkedin accounts to connect with victims, and some fake companies are even listed on the Chinese and New York Stock Exchange. In many cases, if you don’t have a trained China private investigator or India private investigator on the ground in Beijing or New Delhi or where you need evidence, you will have no way to know for certain who you’re dealing with. Does the factory or supplier really exist? Is the office truly at the given address? What is the company’s reputation in the country? Has there been any history of fraud? What about assets? Does the company have sufficient funds? These are often the questions for a private investigator.
Enlist the help of professional. You may be an expert when it comes to your own finances or business, but that doesn’t mean you know the ins and outs of investment in China or India. Just as you’d hire a lawyer to handle any legal matters, you should hire a professional international due diligence agency to vet any upcoming investment actions. These experts will know exactly what warning signs to look for and can help you invest with confidence. Think of the service as a wise insurance policy.
Start small. If you are approached by someone in China or India with a deal that requires a lot of upfront cash and promises a quick return, beware. In fact, it is best to choose your own investments overseas after much research. A person or company who approaches you is suspect. If you engage with what they are selling, you are already on their terms – not your own. Decide instead where you would like to invest your money and resources and then request a global asset search or expert due diligence.
All overseas investments come with a higher risk for fraud, but you can protect yourself with some savvy upfront actions. Investing in India or China can make you a lot on returns if you go into the process wisely and with professional help. Take advantage of your options, and verify!
© 2014 Wymoo International
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