When Can a Business Dispute Become a Criminal Case in Vietnam?

Not every business dispute is purely a civil matter. In certain circumstances, a business dispute may be investigated as a criminal case. When does this happen?

When Can Business Disputes Between Partners Be Subject to Criminal Liability in Vietnam?

In business activities in Vietnam, disputes between partners are not uncommon. Many companies—especially foreign investors—often assume that such matters are purely civil or commercial disputes that can be resolved through negotiation, arbitration, or court proceedings.

However, in reality, some business disputes have been reviewed by investigation authorities from a criminal law perspective. This often surprises businesspeople when they receive a police invitation for questioning, and in some cases individuals may even face temporary detention or criminal prosecution.

So where is the boundary between a civil dispute and a criminal offense? When can a contract dispute, investment dispute, or capital contribution dispute be converted into a criminal case in Vietnam?

Understanding this distinction can help businesses and investors protect their rights from the very beginning.

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Business Disputes That Are Usually Handled Under Civil Law

In most situations, business disputes are resolved under the Vietnam Civil Code 2015 and the Commercial Law 2005. Common types of disputes include:

Commercial Contract Disputes

For example:

Failure to pay for goods on time
Delivery of goods not meeting agreed quality
Breach of contractual terms
Delays in project implementation

In such cases, the injured party may choose to:

Negotiate or mediate
File a lawsuit in court
Bring the dispute to commercial arbitration

Courts or arbitration tribunals may require the breaching party to compensate damages, pay contractual penalties, or continue performing contractual obligations.

The key point is that civil law aims to restore the parties’ rights and interests rather than punish them.

Disputes Over Capital Contribution, Shares, or Corporate Management

Common disputes between business partners may include:

Disputes over shareholding ratios
Disputes over management rights in a company
Disputes over profit distribution
Disputes over capital transfer

These matters are typically resolved under the Law on Enterprises 2020 and the company’s charter.

In most cases, such disputes remain civil or commercial in nature, not criminal offenses.

However, the situation may change if one party’s conduct shows signs of fraud, asset appropriation, or abuse of authority.

When Can a Business Dispute Become a Criminal Case?

A business dispute may be examined from a criminal law perspective if there are indications of crimes stipulated in the Vietnam Penal Code 2015 (amended in 2017).

In other words, the key issue is not whether a dispute exists, but the nature of the parties’ conduct.

When There Are Signs of Fraud or Asset Misappropriation

One of the most common situations is when one party is alleged to have intentionally appropriated the assets of the other party.

Several criminal offenses may be considered by investigation authorities, including:

1. Fraudulent Appropriation of Property

This offense may be considered if:

A person uses deceptive methods
Causes another party to trust them and transfer property
Then appropriates that property

Examples in business practice include:

Signing a contract while clearly knowing it cannot be fulfilled
Providing false information to obtain investment funds
Using forged documents to receive payments

2. Abuse of Trust to Appropriate Property

This offense may arise when:

A person legally receives property from a partner
Then uses the property for an improper purpose or fails to return it
Showing signs of appropriation

Examples include:

Receiving a deposit but failing to implement the project
Receiving investment funds and using them for personal purposes
Failing to repay money despite having the ability to do so

In practice, the line between a contractual breach and criminal appropriation can sometimes be very thin, and the interpretation of investigation authorities may significantly influence how a case is handled.

When There Are Signs of Abuse of Authority or Mismanagement of Assets

In certain situations involving companies or investment projects, disputes may be examined under other criminal offenses such as:

Abuse of Position or Authority to Appropriate Property

This may occur when a person:

Exploits their managerial position in a company
Uses their authority to appropriate company or partner assets

Illegal Use of Property

Examples may include:

Using company assets for personal purposes
Transferring company assets to unauthorized third parties

In such circumstances, an internal corporate dispute may escalate into a criminal case if investigation authorities identify serious violations.

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What Should Foreigners Do If They Are Invited to Work With the Police in Vietnam?

For foreigners doing business or investing in Vietnam, receiving a police invitation for questioning can be stressful.

It is important to understand that not every meeting with the police means criminal liability will follow. However, how you handle the situation at the early stage can significantly affect the entire case.

Stay Calm and Understand Your Rights

Under the Vietnam Criminal Procedure Code 2015, individuals who are invited for questioning or reported to authorities have basic rights, including:

The right to present statements and provide documents
The right to seek legal counsel and representation by a lawyer
The right not to be forced to give unlawful statements

For foreigners, having a lawyer who understands Vietnamese law and has experience working with investigation authorities is particularly important.

Seek Legal Advice as Early as Possible

Many businesspeople only contact a lawyer after a criminal case has already been initiated.

In practice, however, the initial investigation stage is often the most important time to:

Clarify the true nature of the dispute
Provide documents proving legitimate transactions
Prevent unnecessary legal misunderstandings

An appropriate legal strategy may help demonstrate that the matter is merely a civil dispute, or at least ensure that the rights of the involved parties are best protected during criminal proceedings.

DEDICA Law – Legal Support for Foreigners in Criminal Cases in Vietnam

Over the years, DEDICA Law has advised and represented foreign clients involved in criminal cases in Vietnam, including:

Foreigners under criminal investigation or prosecution
Foreign victims in criminal cases
Foreign entrepreneurs facing business disputes with potential criminal implications

DEDICA’s lawyers have previously worked at international law firms and multinational corporations, with experience in:

Working with investigation authorities
Providing criminal defense representation
Helping foreign clients navigate the Vietnamese legal system

Disclaimer: Each case has its own legal circumstances, and outcomes depend on many factors such as evidence, testimony, and the investigation process. Early consultation with a lawyer can help you accurately assess legal risks and determine an appropriate legal strategy.