Business formation jumps in January, but closures highlight lingering strain

Business formation jumps in January, but closures highlight lingering strain

Nearly 24,200 new businesses were established nationwide in January, up 40.9 per cent from December.

A factory of SUNJIN AT&C VINA Co in Huế. — VNA/VNS Photo

Việt Nam’s business landscape opened the year on a stronger footing, with a sharp rise in new and returning firms in January pointing to improving confidence as the economy recovers, even as elevated temporary closures reflect continued cost and demand pressures.

Nearly 24,200 new businesses were established nationwide in January, up 40.9 per cent from December, according to the National Statistics Office under the Ministry of Finance. Total registered capital reached VNĐ180.9 trillion, up 9 per cent, while registered employment rose 7.5 per cent to about 108,200 workers.

Despite the increase in business formation, average registered capital per new firm fell to VNĐ7.5 billion, down 22.6 per cent from the previous month and 15.2 per cent from a year earlier. Additional capital injected by existing firms totalled VNĐ358.1 trillion, a decline of 2.5 per cent from January 2025.

More than 24,500 businesses resumed operations during the month, up 146.2 per cent month on month and 7.6 per cent year on year, bringing the total number of newly established and reactivated firms to nearly 48,700, an increase of 45.6 per cent year on year, the statistics office said.

By sector, new registrations rose across the board. Agriculture, forestry and fisheries recorded 304 new firms, up 169 per cent from a year earlier, while industrial and construction businesses jumped 115.4 per cent to 5,480. The services sector added nearly 18,400 new firms, an increase of 129.9 per cent.

However, signs of strain persisted. Almost 54,300 businesses registered temporary suspensions in January, 11.8 times more than the previous month and 2.8 per cent higher than a year earlier. More than 7,300 firms ceased operations while awaiting dissolution procedures, and 4,609 completed dissolution, the data showed.

The figures point to a recovery in business activity supported by a stable macroeconomic environment, but also underscore the limited resilience of many firms, particularly small and medium-sized enterprises, amid rising input costs, financing constraints and uneven market demand. 

Bizhub