What does zero social insurance employees mean in a China company report?
Question
I checked the corporate credit report of a daily necessities supplier in Yiwu, Zhejiang, and found that their social security contributors showed zero. But the other party claimed to have more than 50 employees and two production lines. This data contradiction makes me very uneasy and I don't know how to understand it.
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The number of people in social security is zero, which does not necessarily mean that of a shell company, but it is definitely a high-risk enterprise. I have contacted many China suppliers and have many China friends. Some small and micro enterprises do pay social security through third-party labor dispatch, so the industrial and commercial registration shows zero. But more often, this company is a small and micro enterprise with few real employees, perhaps just an intermediary company.
If it is verified that a company has more than 50 actual employees (non-third-party labor dispatchers), but the number of social security contributors is 0, the following problems will generally arise:1. The company's personnel are highly mobile, mainly temporary workers, and its production capacity and stability are huge. The risk of sex is huge. 2. This company is reluctant to purchase social security for employees and has low social responsibility. 3. This company has low profitability and will bear huge costs to purchase social security for employees.
In either case, I will not give priority to a China company with zero social security.
if a company shows zero employees on social insurance in China, it's most likely a tiny company or a middleman/trading company. Traders love to present the factories they work with as their own factories. That's really common in China, and a lot of real factories will happily play along. It's a pretty normal, mutually beneficial setup between traders and factories.
Usually, trading companies know the import/export process better, while real factories have the price advantage.
The key is what you prioritize and how much risk you're willing to take. If you're okay taking on more risk and just want someone to make things easy and handle the shipment for you, a trader might be a good choice. If you want lower supplier prices and lower risk in the partnership, then definitely go with a real factory that has more than 10 people on social insurance.
People Also Ask
How to verify the number of social security people in China companies?
There are two main ways: log in to China's National Social Insurance Public Service Platform to make inquiries or contact a third-party verification platform to make inquiries.CheckChinaCompany's services include this item.
What should I pay attention to when working with a China company with zero social security?
Try to keep the prepayment ratio low, do not make large sums at one time, and give priority to third-party guaranteed transactions. Require the other party to provide office space photos, business contracts, and tax records to prove the true business status. It is also necessary to check clearly the records of breach of trust, execution, and judicial proceedings, and clearly write out the liability clauses for breach of contract in contract terms to reduce the probability of stepping into a trap.
If the number of people in social security is 0, does it have to be a shell company?
It may not be directly determined that it is a shell company. There are a few reasonable circumstances, such as having just registered and not yet hired full-time employees, and all business is outsourced. However, when social security is zero in the long term, we must be highly vigilant. The typical feature of many shell companies is that the number of people participating in social security is zero. It is best to make a comprehensive judgment based on address, tax payment, and litigation information, rather than just looking at this one indicator.