Newly-established firms down in Q1

Wednesday, 2021-03-31 10:38:44
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The Hanoi Business Registration Office's staff solve legal procedures for businesses. (Photo: VNA)
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NDO/VNA – Vietnam had 29,300 newly-established enterprises with total registered capital of VND447.8 trillion (US$19.37 billion) in the first quarter of this year, according to the General Statistics Office (GSO).

These figures were down 1.4% in the number of newly registered enterprises but up 27.5% in the registered capital year on year. The higher capital was due to an increase of 36.8% in the number of enterprises with registered capital at over VND100 billion.

During the first quarter, 40,300 enterprises stopped business, a year-on-year increase of 15.6%. Of which, 23,800 were temporarily closed, up 28.2%, and 5,200 have permanently ceased to do business, a surge of 26.4%, while 11,300 others are completing dissolution procedures.

The majority of enterprises temporarily suspending their business and dissolving were small-scale and vulnerable businesses due to negative impacts, according to the GSO.

Meanwhile, 44,000 enterprises resumed their operation in the first three months of this year.

The GSO’s survey on business trends of the manufacturing and processing industry showed that many enterprises expected their production and business in the second quarter of 2021 to be better than the first quarter. Of which, 51% of surveyed businesses said that the business situation would be better than the first quarter while 34.1% of them said the business situation would be stable. About 14.9% of enterprises forecast more difficulties in doing business than the first quarter.

Foreign-invested enterprises in this industry are the most optimistic with 86.2% forecasting stable and better business performance in the second quarter. The ratios in non-State-owned enterprises and State-owned enterprises are 84.8% and 83.4%, respectively.

The survey also reported that 55.1% of enterprises believed that high competitiveness of domestic goods was the main factor affecting their production and business activities in the first quarter.

Other factors included low domestic market demand, difficulties in finance, lack of raw materials and human resources, high interest rates of loans, and outdated technology and equipment.

About 29.6% of enterprises said the business situation in the first quarter of 2021 was better than that in the fourth quarter of 2020 while 39% of them saw stable business situation. About 31.4% of businesses faced difficulties in production and business.