Number of firms exiting the market increases in January
Production and business has remained difficult as there was a rising number of firms exiting the market in the first month of this year, four times higher than those newly established in the same period.
According to the Agency for Business Registration report under the Ministry of Planning and Investment, about 10,800 enterprises were founded in January with a total registered capital of VND99.1 trillion (US$4.2 billion). The total number of employees of nearly 68,600, represents a rise of 0.7 per cent but a decrease of 7.5 per cent and 5.2 per cent, respectively, against the previous month.
Compared to the same period last year, the number of newly registered enterprises dropped by 16.6 per cent, the registered capital by 48.5 per cent and the number of employees by 11 per cent.
The average registered capital was just VND9.1 trillion in January, 8.2 per cent lower than the previous month and 38.2 per cent lower than the same period of 2022.
Together with VND279 trillion in additional capital of 4,500 enterprises, a total of VND378 trillion was registered to be poured into the economy in January, 29.5 per cent lower than the same period last year.
January also saw the resumption of operations of 15,100 enterprises, a rise of 146.8 per cent against December but falling by 21.2 per cent against the same period last year.
Most newly registered enterprises operated in industry and construction (2,540 firms) and services (8,178 firms).
The agency said that the decreases were attributed to the short working time in January as the two major holidays (New Year and Lunar New Year) that fell in the month.
The production and business situation also remained difficult.
Statistics showed that nearly 35,000 enterprises registered to temporarily halt operation in January, up 19.2 per cent over the same period last year. In addition, more than 6,800 enterprises temporarily halted operation for dissolution procedures, down 3.4 per cent and more than 2,000 others completed procedures for dissolution, up 0.6 per cent.
Altogether, nearly 43,900 enterprises quit the market in the first month of this year, up 14.4 per cent over the same period last year and much higher than the number of newly registered enterprises.
The agency said that this reflected the fact that the business situation remained in difficulty.
The four quarter of last year was the time when firms were in a lot of difficulties due to the shortage of orders and the exhaustion of capital flow after nearly three years struggling with the COVID-19 pandemic.