Business closures on the rise
Business closures on the rise
The number of enterprises going bust or being dissolved nationwide increased 20.2% year-on-year to nearly 89,300 this year, according to the Business Registration Management Agency under the Ministry of Planning and Investment.
Of the total, more than 28,700 enterprises have registered for temporary suspension, 43,700 firms are awaiting dissolution and over 16,800 others have completed the procedures for disbandment.
The real estate sector reported the highest growth in the number of enterprises registering for temporary suspension, at 598 enterprises, surging 36.8% year-on-year. The finance, banking and insurance sector came in second with 265 firms, rising 25%, followed by firms producing and distributing electricity, water and gas; providers of job and tourism services; and manufacturing and processing companies, up 19.4%, 14.6% and 10.8%, respectively.
Meanwhile, among the firms awaiting dissolution, more than 17,700 firms had their business registration certificates revoked, nearly 14,500 firms announced their dissolution and 11,500 others underwent dissolution procedures.
Most of them were in the wholesale, retail and automobile and motorbike repair sectors, at nearly 16,000 units, accounting for 36.6%. They were followed by those in the construction and manufacturing and processing sectors, making up 13.9% and 12.3%, respectively.
Of the total businesses that completed procedures for disbandment, those operating in the real estate sector accounted for the largest proportion, at 686 units, followed by those in the healthcare and community support and finance, banking and insurance sectors.
The Business Registration Management Agency also noted that more than 46,800 enterprises are no longer operating at their registered addresses, rocketing 43.4% over last year. These firms mainly specialized in the wholesale, retail and automobile and motorcycle repair; construction; and manufacturing and processing sectors.
According to the Vietnam Chamber of Commerce and Industry (VCCI), the local business environment has been significantly improved but still has shortcomings. In the third quarter of the year alone, 333 enterprises sent proposals on regulation clarifications and policy amendments to the VCCI.
Although the Government has asked the ministries and agencies to abolish business conditions, these conditions remain a great hindrance to enterprises. Up to 18% of firms reported that they had to spend more than a month completing procedures related to production and business.
At a seminar on Vietnam’s competitiveness, held by the Central Institute for Economic Management (CIEM) in HCMC in late October, experts agreed that the ministries and agencies had cut multiple unreasonable business conditions but the overall abolishment remains ineffective.
Nguyen Thi Minh Thao, head of the CIEM’s Business Environment and Competitiveness Committee, stated that business conditions that enhance the power of State management agencies have yet to be cut.
