More and more businesses declare death

Nov 26th at 21:19

26-11-2012 21:19:19+07:00

Competent agencies have noted the increasingly high number of businesses which come to follow the formalities to close the tax codes and get dissolved or bankrupt.

There has been no official statistics about the number of enterprises which have got bankrupted or dissolved, because a lot of dead businesses have not followed necessary procedures to declare their deaths. However, economists affirmed that the number is very high.

Birth on decrease, death on rise

The Business Registration Office of the Hung Yen provincial planning and investment department has been quiet these days. When reporters came there, they saw only some officers working. Only some people came to make procedures to set up new businesses until the end of the morning of the working day.

Doan Thi Tam, Head of the Business Registration Office, said people come to the office not only to make business registration, but also to make the procedures to close tax codes and declare bankruptcy.

However, Tam said, a lot of dead businesses have not declared their bankruptcy, for some reasons. They fear that banks would come to distrain their assets, or other creditors would try to prevent them from selling products to get money for debt payment.

According to the Hung Yen provincial planning and investment department, from January 1, 2012 to November 21, 2012, there were 463 newly set up businesses, a sharp fall of 21.39 percent in comparison with the same period of the last year.

Meanwhile, 34 enterprises followed the formalities for the bankruptcy declaration, increasing by 112.5 percent. Eight enterprises reportedly shut down their branches, representative offices and business points, up by 14.28 percent.

According to the Quang Ninh provincial Business Registration Division, 882 enterprises have registered their business so far this year, a decrease of 27.6 percent in comparison with the same period of the last year.

The total registered investment capital of the businesses was 4775 billion dong, a decrease of 141 percent, while 2121 businesses declared changes in the business fields, while hundreds of businesses have declared their operation ending.

In Mong Cai City alone, the reports from over 100 import-export companies show they are in big difficulties. It is estimated that 30 percent of them have declared bankruptcy or have stopped operation.

The other 50 percent of businesses have been taking losses and operating at moderate levels because the government has tightened the control over the business of temporarily importing for re-export later.

A lot of businesses have had their accounts blocked by the Chinese authorities, which makes it unable to receive payment from Chinese partners. As a result, they have to borrow money from banks to pay for transport fee and container storage.

“If the situation cannot be improved, up to 50 percent of businesses in Mong Cai would go bankrupt in the time to come,” said the director of an import-export company in Mong Cai.

Three ways that leads businesses to death

Vu Tien Loc, in an interview given to local newspapers, estimated that some 50,000 businesses have stopped their operation so far this year.

If counting on the enterprises which shut down in 2011, one would see that 100,000 businesses have got dissolved over the last two years, which is equal to 50 percent of the number of shut businesses over the last 20 years, since the day the Enterprise Law took effects.

According to Bui Huy Cuong, Deputy Director of the Hung Yen Investment Promotion Center, the low market demand, the inaccessibility to bank loans and the big stocks are the three biggest problems for enterprises.

vietnamnet