In 2022, the economy witnessed 143,198 enterprises leaving the market, a 19.5 percent increase over 2021.

The business fields that had the highest numbers of departed enterprises included real estate trade (+ 42.4 percent), finance, banking and insurance (+ 35.4 percent); science and technology; consultancy, designing; advertising and others (+ 31.6 percent); education and training (+ 31.2 percent); information and telecommunications (+ 28.5 percent); manufacturing and processing (+ 23.8 percent); healthcare and social assistance activities ($19.9 percent) and construction (+ 18.8 percent).

The enterprises departing the market were mostly small with capital of between zero and VND10 billion, operating in the service sector (101,732 enterprises), accounting for 71 percent of total left enterprises, an increase of 19.6 percent over 2021.

In the first five months of 2023, 88,040 enterprises left the market, up 22.6 percent compared with the same period in 2022. The enterprises mostly operated in the fields of real estate (+ 47.1 percent); healthcare and social assistance activities (+ 42 percent); accommodation and eatery service (+ 32.8 percent); transport and warehouse (+ 28.6 percent) and construction (+2 5.5 percent).

Reporting on business registration, MPI noted that real estate trading continued to be the most affected business field with the number of real estate firms leaving the market on the sharp rise in 2022 (+ 42.4 percent over 2021) and the first five months 2023 (+ 47.1 percent over 2022).

“The number of enterprises leaving the market tends to increase more rapidly than the number of enterprises joining and rejoining the market,” MPI concluded.

Analysts noted that the decrease in the average capital of newly registered businesses compared with 2021 reflected difficulties being faced by the private sector.

The MPI admitted the fact, citing statistics to show that the average registered capital per one business in 2022 was VND10.7 billion, down 22.3 percent compared with 2021. Meanwhile, the average registered capital in the first five months of 2023 was VND9.2 billion only, down 24.1 percent year on year, and 34.2 percent compared with the same period of 2021.

In the first five months of 2023, the total registered capital of newly-established firms was VND568.711 trillion, equivalent to 70 percent of the total capital of the Covid-19-hit years VND778.327 trillion in 2021 and VND761.035 trillion in 2022).

The ministry attributed this to the negative impacts of the global situation like high lending interest rate, the decline of the stock market and enterprises’ eroded resilience after struggling with Covid-19.

Luong Bang