Growth of both new and defunct businesses

09:45 | 06/09/2017 Economy- Society

(VEN) - According to the Ministry of Planning and Investment’s recently released report on business registration in the first seven months of 2017, the number of newly established and temporarily suspended or dissolved enterprises increased compared to the same period last year.

growth of both new and defunct businesses

Data from the Ministry of Planning and Investment’s Agency for Business Registration (ABR) showed that in the first seven months of this year, 72,953 enterprises totaling almost VND690.74 trillion in registered capital were founded, up 13.8 percent in volume and 39 percent in value compared to the same time in 2016. All regions in the country experienced growth in the number and value of newly registered enterprises: the northern midland and mountainous region with 3,099 enterprises, up 26.5 percent; the Central Highlands with 1,866 enterprises, up 21.3 percent; the Red River Delta with 22,304 enterprises, up 15.4 percent; the Mekong Delta with 5,175 enterprises, up 14.1 percent; the southeastern region with 30,579 enterprises, up 11 percent; the north central and central coastal region with 9,933 enterprises, up 10.9 percent.

In the first seven months of 2017, 17,502 enterprises in different localities and sectors re-opened after suspending activities, up 4.8 percent from the same period of 2016. Meanwhile, 15,866 enterprises registered a temporary halt to business, up 16.2 percent, and enterprises awaiting dissolution totaled 27,408, up 21.5 percent.

The businesses suspending their operations and those awaiting dissolution are found in most sectors and regions. The fields of wholesale, retail, and repair of automobiles and motorbikes, for example, saw 6,274 enterprises registering a temporary halt (up 14.7 percent from the same period of 2016) and 27,408 enterprises awaiting dissolution (up 14.5 percent).

According to the Ministry of Planning and Investment, 92.4 percent of all businesses dissolved in the first seven months of 2017 are super small with registered capital of less than VND10 billion each.

Looking at the business picture of the first seven months of this year, economists assessed that newly established enterprises increased in quantity, scale and value, and the business environment has improved. While the growth in the number of enterprises suspending operations or shutting down is attributed to their limited size and capital, economists assess that difficulties remain ahead of other businesses, too, in terms of preferential market and capital access. They say specific policies for those businesses need to be adopted in the near future.

Chu Huynh