Years ago, a Canadian company called me in a panic. Chinese authorities had just raided their office, shut down their manufacturing facility, and detained their general manager for questioning.
The reason? They had followed "legal advice" from a business forum claiming that foreign companies could legally operate in China without a WFOE if they structured their business "properly" through Hong Kong. That advice was completely wrong and it cost them six months of operations, hundreds of thousands in back taxes, interest, and penalties, and massive legal fees. It nearly destroyed their business.
Fortunately, we were able to convince the Chinese authorities that the company had made a genuine mistake—not acted with intent—and no one went to jail. See Doing Business in China Without a WFOE: Will the Defendant Please Rise.
Every few months, someone contacts us because they followed "legal advice" they found online. The sources range from Reddit and LinkedIn to WeChat forums, or increasingly from AI chatbots. The advice sounded authoritative but was completely wrong.
We repeat our disclaimer so often it might as well be automated: "The purpose of this website is to provide general information only. It does not constitute or contain formal legal advice or a solicitation for legal services."
Despite these clear warnings, the allure of quick answers persists, sometimes leading people to misinterpret even our own content.
When Online Research Goes Wrong
1. Our Own Blog Gets Misquoted
Someone once emailed me saying that people on WeChat were claiming that our blog said foreigners had to submit a particular form to the Chinese government. We had never written any such thing, and it turned out that the form did not even exist. I looked at the forum and became convinced someone was pushing this fake form, then charging people $750 to fill it out and never filing it.
People skim posts, misinterpret nuance, or take general guidance as gospel. And the cost? Hundreds of thousands of dollars—and sometimes the loss of a business.
2. When I Almost Got It Wrong (and Fixed It the Right Way)
The dangers of unverified information aren't exclusive to business owners; even experienced lawyers can fall prey to relying too heavily on general online research.
When I moved to Spain for a year to work more closely with our Spain lawyers, I hired a top Spanish immigration attorney. In just one hour, she corrected the 10% of my research that was wrong—details that could have gotten me deported—and used a law school connection to skip a two-month wait at the consulate.
The lesson: experience and connections matter. Even experts need experts.
Why International Law Demands Legal Expertise and Experience
Navigating legalities in any country requires care. But crossing borders introduces exponentially greater complexity, especially in dynamic emerging markets like China, Mexico, Vietnam, or Colombia. This makes online advice particularly perilous.
Here's why:
1. Law Is Hyper-Local
What's legal for a manufacturer in Shenzhen may be prohibited for the same company in Qingdao. Mexico's federal laws seem clear until you hit state and municipal quirks. Vietnam's national rules get interpreted differently by each province.
In many emerging markets, hyper-local rules—and their enforcement—can make or break your strategy.
2. Law ≠ Enforcement
Even when national laws are clear, local enforcement often isn't.
- China: IP law is enforced 95% of the time. But that last 5%? If your IP is politically or strategically sensitive, you may find yourself outside the protection zone.
- Mexico: Local government officials may interpret environmental laws in ways federal authorities do not. A manufacturer lost $80,000 because it relied solely on national guidelines.
- Vietnam: One company's "compliant" employment contracts led to a $45,000 fine because local interpretations differed.
- Colombia: Corruption isn't dead—and informal local systems can derail even the most carefully researched strategies.
We routinely confirm legal interpretations with local government officials—not because we distrust the law, but because we trust reality. In some countries, we bring in local lawyers we know and trust to do the confirming.
3. Laws Get Lost in Translation
Google Translate doesn't know what matters in a contract. Even professionally translated laws can be misleading. They're often technically correct—but just enough to get you in trouble.
Even a high-quality translation of a law isn't enough—because legal decisions often hinge on local regulations, administrative interpretations, and unwritten practices. That's why our China lawyers work only from the original Chinese and frequently speak directly with government officials to clarify how a regulation is actually enforced. See Why English Translations Of Chinese Laws are Not a Good Idea.
4. Form Over Substance Still Wins
In many countries, the process matters more than the purpose.
- A China client shipped $5M in equipment assuming it would count toward its registered capital. It didn't—because they hadn't gotten prior approval to have it count that way. The only solution was to inject an additional $2 million into their China business.
- In Mexico, improper invoice formats (even when legit) can disqualify tax deductions. One company came to us after having lost $75,000.
- In Vietnam, a manufacturer filed permits in the wrong order. This "minor" error caused an 8-month delay and $200,000 in costs.
What's "legal" isn't always what works.
5. The One-Size-Fits-All Trap
The internet loves simple solutions to complex problems. Take China NNN Agreements—contracts we pioneered 20 years ago that are now pushed online as universal fixes. About half the companies asking for them don't actually need one. Sometimes no agreement works better, or there's a more cost-effective alternative.
Worse still, poorly drafted NNN Agreements can actively harm a company. We've seen contracts with clauses that make enforcement nearly impossible, or subtly undermine a foreign company's ability to protect its IP. We even suspect some Chinese 'lawyers,' hired by foreign companies, are secretly compensated by Chinese counterparts to deliberately draft agreements that favor the Chinese side. See China Contract Drafting Scams: From Bad to Much Worse.
But "the internet said so" still drives decisions—often creating more risk than protection.
And Then There's AI: The New Frontier of Legal Misinformation
AI might be your favorite research assistant—but it's a dangerously unreliable legal advisor.
Here's how AI often fails, with real-world consequences.
1. Hallucinated Legal Guidance
AI confidently fabricates laws, regulations, and cases that don't exist. Half the time, it interprets legal decisions backwards. We regularly see companies planning strategies based entirely on AI advice that's flat-out illegal.
2. Context Blindness
AI can't read between the lines. It doesn't know if your project is in a special economic zone, if your product is politically sensitive, if there's a narrow regulatory loophole you qualify for—or if you're asking the wrong question entirely. More often than not, it confidently answers what you asked, even when what you should have asked is something completely different.
One company asked AI about forming a logistics company in China. AI said yes, confidently and in detail. Our China lawyers immediately caught the problem: logistics is a restricted sector requiring Chinese partners and government approvals. They chose to scrap their China plans.
3. AI Doesn't Ask the Right Questions
A good lawyer interrogates your facts. AI doesn't.
A client followed AI's "perfect" advice for Vietnamese labor law—only to learn months later that their special economic zone had completely different rules.
4. Outdated Confidence
AI is only as current as its training data. But laws change—and fast.
Warning Signs of Bad Online Legal Advice
Before relying on any online legal information, watch for these red flags:
- Generic solutions for specific problems.
- No publication date or outdated content.
- Too-good-to-be-true simple fixes.
- Anonymous sources or unclear credentials.
- Universal strategies that supposedly work everywhere.
The Bottom Line: Use the Internet—But Know Its Limits
Online research is a great start. It's not a place to stop.
The internet is good for:
- Understanding general legal frameworks.
- Learning legal terminology.
- Identifying big-picture risks.
- Preparing for an informed discussion with your attorney.
Use lawyers for:
- Navigating local specifics.
- Interpreting the law's intent vs. practice.
- Making decisions involving money, risk, or compliance.
And yes, this applies even when the information seems credible—and yes, even if it sounds like it came from us or truly does. Remember: The information on this blog is for general educational purposes only and does not constitute legal advice.
Why Lawyers Need Lawyers
I've participated in at least a dozen international bankruptcy cases, and I'm working with one of our bankruptcy lawyers on one right now. That gives me better knowledge than 95% of lawyers who don't practice bankruptcy law. But compared to someone who does? I know less than 99.9%.
We've achieved terrific outcomes in international divorce and cross-border trust and estate litigation. But we'd never take a standard divorce or estate litigation case—because we're not qualified to handle them. Not because we can't read the law—but because the nuance, the strategy, and the judgment only come from deep specialization and extensive experience.
Even lawyers bring in experts outside their practice areas. Before your next international expansion, ask yourself: Is saving a few legal fees really worth risking your entire business?
Use online research to get educated. Use qualified lawyers to get protected.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
