Vietnam’s business registration status in the first half of 2021

Enterprises are stopping their businesses

The new wave of COVID-19 in late April has made an impact on the business activities of Vietnam. Social distancing and restricting solutions have been placed in different provinces and cities throughout the country, affecting people’s lives. Investors are also getting more cautious when deciding on the business registration of enterprises.

A report by the General Statistics Office (GSO) on June 29 showed that in the first six months of 2021, Vietnam had 70,200 enterprises that were either suspending business temporarily, suspending business due to pending dissolution procedure, or completing business dissolution procedure. This amount increased by 24.9 percent when compared to the same period in 2020.

Of the 70,200 enterprises, there are 35,600 units temporarily suspending business, which increased by 22.1 percent over the same period last year. 24.700 units stopped operation and are in the process of finishing dissolution procedure, increased by 25.7 percent compared to 2020. Companies that completed the dissolution procedure were 9,900 units, up 33.8 percent. On average, each month, 11.700 businesses are withdrawing from the market.

On the contrary, new records were set

Also, in the first six months of this year, Vietnam had nearly 67,100 newly registered enterprises, with a total registered capital of 942,600 billion VND. The total number of registered employees was 484,300 employees. The number of enterprises increased by 8.1 percent, registered capital up 34.3 percent, and the number of employees down 4.5 percent compared to the same period in 2020. The average registered capital of a newly established enterprise in these six months reached 14.1 billion VND, increased by 24.2 percent compared to 2020.

In addition, there were 26,100 companies returned to operation, up 3.9 percent over the same period last year, bringing the total number of newly-established and returning to operation enterprises in the first half of 2021 to 93,200 units. Thus, on average, each month, there are 15,500 new businesses established or return to operation.

The number of newly registered businesses was recorded as the highest so far, surpassing the milestone of 66,958 enterprises in the first six months of 2019. In the context of the new outbreak of COVID-19, this number of registered businesses can be considered a special record, demonstrating the community’s efforts and entrepreneurial spirit. Many new business opportunities have appeared and will appear.

GSO conducted a survey on the business trends of enterprises in the processing and manufacturing industry in the second quarter of 2021. The results showed that 30.5 percent of enterprises said that the business situation was better than in the first quarter. 37.7 percent of enterprises said that the situation was stable, and 31.8 percent claimed there were difficulties. It is expected that in the third quarter, 77.8 percent of enterprises will assess the business trend as stable and better.

The total registered capital added to the economy in the first six months of 2021 is also the highest ever compared to the same period in previous years, with 2,095,163 billion VND. The average registered capital per enterprise in the first six months of 2021 reached 14.1 billion VND, up 24.2% over the same period in 2020. Besides, in this period, there were 23,708 enterprises registered to increase capital. That is a positive signal, showing that production and business activities have a good chance of recovering compared to last year.

The Vietnamese Government has decided on making pandemic prevention a fundamental factor, a must-do to develop the socio-economy, creating an optimism of a continued business environment, where enterprises can be in operation as always. Vietnam has been the only country in the world that has been upgraded to positive by three credit rating agencies, including Moody’s, S&P, and Fitch. That is a positive factor that helps guarantee Vietnam’s business environment.

Compiled by VietnamCredit