Newly established businesses hit record high post pandemic

A total 15,001 new businesses were registered in Vietnam in April, up nearly 700 from March and surpassing the record monthly high of 14,866 a year ago, according to the General Statistics Office.

Dramatic increases in newly established enterprises were seen in Mekong Delta, Red River Delta, the north central region, and the central coastal region.

There were 7,034 enterprises reopening after the suspension period caused by the Covid-19 pandemic, up 63.6% from last month and 22.4% year-on-year.

Closed enterprises were at 10,400, down 11% year-on-year, but up substantially from the previous two months. However, April was the third month in a row when the number of newly established firms surpassed closures.

According to the Agency for Business Registration, the overall number of firms joining and returning to the market in April doubled the number of closures due to two main factors.

Firstly, businesses were excited about the new normal period following a volatile year, believing in the economy’s prospects in the coming quarters. The second factor was the government's policy to ease pandemic control measures, tourism reopening fully, and improved business climate transparency.

According to the GSO, 49,600 enterprises were registered in the first four months. Real estate, health, warehousing, retail, accommodation, and F&B were sectors with the largest increases in new businesses.

The total capital of newly established enterprises in the period reached VND635,300 billion ($27.67 billion). Of this, more than 89% of capital registrations were under VND10 billion ($435,000), while firms with over VND10 billion were less than 2%.

Meanwhile, 61,500 enterprises closed in the first four months. Most of them had limited capital, short operating duration, and opted for a short-term withdrawal. Retail, motorbike or automobile repair, construction, and processing were groups with the most businesses suspended.

The period saw 30,900 businesses reopened, bringing the total number of operating firms to 80,500, up 26.9% year-on-year.

According to Minister of Planning and Investment Nguyen Chi Dung, business registration was very positive. "The number of newly established firms and businesses reopened over the past four months reflects Vietnam’s recovery trend."