Enterprise registration status in Vietnam in the first half of 2023

In recent times, the global situation continues to be complicated, causing strong impacts and impacts on economic activities, investment and consumption on a global scale, including impacts on Vietnam. Domestically, production and business continued to face many difficulties and challenges. Timely policies and solutions have removed difficulties for the business community and investment environment in Vietnam. As a result, the business registration situation has shown more positive signals in the first half of 2023, although still facing many difficulties and challenges.

Enterprise registration status in Vietnam in the first half of 2023

In general, the above statistical data shows that while there is strong new entry and establishment, there are also some enterprises that decide to withdraw from the market or suspend business. The understanding and analysis of the business situation is important to understand and come up with policies to support, encourage business development and create favorable conditions for enterprises.

Based on statistical data on business registration in the first 6 months of 2023, Law Viet An statistics are as follows:

Enterprises entering and re-entering the market

The total number of enterprises entering and re-entering the market in the first 6 months of 2023 is 113,550 enterprises. This number decreased by 2.9% compared to the same period in 2022, but still 1.2 times higher than the average level of the period 2018-2022 (93,377 enterprises). This shows that despite a slight decrease, the market entry and re-entry status is still quite positive.

New established business

In the first 6 months of 2023, 75,874 new businesses were established. This number decreased by 0.5% compared to the same period in 2022, but still reached 1.1 times compared to the average level of the period 2017-2021 (67,371 enterprises). This shows that despite the slight decrease, there is still investment in new business.

The total registered capital of new enterprises is VND 707,457 billion, down 19.8% compared to the same period in 2022. This shows that the level of investment capital for new businesses has decreased during this time.

In the first 6 months of 2023, there were 25,187 turns of active enterprises registering to increase capital. This number decreased by 6.6% compared to the same period in 2022, and the additional registered capital was 958,658 billion VND, down 48.1% compared to the same period in 2022. This shows that the capital increase of operating enterprises has also decreased significantly during this time.

Statistics by industry, field, data show that the number of industries with newly established businesses is witnessing an uptrend and a decrease is equal. Specifically, there are 9/17 industries with an increase in the number of newly established enterprises compared to the same period in 2022, mainly in industries such as: Education and training, Employment services; tourism; rental of machinery, equipment, utensils and other supporting services, Arts, entertainment and recreation, Health and social assistance activities, Accommodation and catering services, Other service activities, Wholesale; retail; repair of cars, motorcycles, Science and technology; consulting and design services; advertising and other expertise, Information and communication.

The rest are industries with reduced number of new establishment, mainly focusing on industries such as: Real estate business, Agriculture, forestry and fishery, Finance, banking and insurance, Production and distribution, electricity, water, gas, Processing industry, manufacturing, Transportation and warehousing, Construction, Mining.

Most of the newly established enterprises are small-scale ( under 10 billion VND) with 69,590 enterprises, accounting for 91.7%. These enterprises are mainly in the Service sector with 57,008 enterprises, accounting for 75.1% of the total number of newly established enterprises. Meanwhile, the Industry and Construction group had 18,067 enterprises entering the market, accounting for 23.8% of the total number of newly established enterprises, and the Agriculture, forestry and fishery sector recorded 799 newly established enterprises, accounting for 1.1% of the total number of newly established enterprises.

The total number of registered employees of new enterprises in the first 6 months of 2023 was 509,870 employees, a decrease of 1% compared to the same period in 2022, indicating a slight decrease in the number of employees in new enterprises during this time.

Re-entering businesses

The total number of enterprises returning to operation is 37,676 enterprises. This number decreased by 7.4% compared to the same period in 2022, but still 1.4 times higher than the average level of the period 2018-2022 (26,006 enterprises). This shows that the investment market in Vietnam has made a significant recovery despite the severe consequences of the COVID-19 epidemic.

Among 17 fields, there are 7 fields with an increase in the number of businesses returning to operation compared to the same period in 2022, including: Health and social assistance activities, Finance, banking and insurance, Information and communication, Science and technology; consulting and design services; advertising and other expertise, Education and training, Mining, Real estate. The average increase of the listed sectors is about 4.2%, of which the Health sector has the strongest increase in the number of businesses returning to operation (14.7%) over the same period last year. This is a sign of a strong business recovery in the health sector after the pandemic.

However, in 10/17 other sectors, the number of businesses returning to operation decreased compared to the same period in 2022. Typical sectors among these include Accommodation and Catering Services, Employment Services; tourism; Arts, entertainment and recreation, Transportation and warehousing, Production and distribution, electricity, water, gas, Agriculture, forestry and fisheries, Construction. The average decrease of these sectors is 7.67%, a relatively high figure compared to the increase of the remaining sectors. However, the number of new establishment of businesses in some sectors of this group increased, so overall there was still positive development in the first half of 2023.

Businesses withdraw from the Vietnamese market

Based on the data on the situation of enterprises withdrawing from the market in the first 6 months of 2023, it can be seen that:

The total number of enterprises withdrawing from the market was 100,026 enterprises, an increase of 19.7% over the same period in the first 6 months of 2022. The majority of them (60.2%) were enterprises that chose to suspend their business for a short time to seek recovery opportunities.

Specifically, the number of enterprises temporarily suspending business is 60,172 enterprises, an increase of 18.2% over the same period in 2022. Of these, most of them have a short operating time (under 5 years) and most of them are concentrated in small scale (under 10 billion VND). This shows that start-ups, small and medium-sized enterprises are becoming relatively vulnerable to the weight of the global recession.

Among enterprises that decided to terminate operations, the number of enterprises waiting for dissolution procedures was 31,023, an increase of 28.9% over the same period in 2022. The number of dissolved enterprises was 8,831 enterprises, an increase of 2.8% compared to the same period in 2022. Dissolved enterprises mainly focus on capital scale of less than 10 billion dong, and also belong to the group of small and medium enterprises. Although there are certain incentives and supports from the Government, the focus on governance and business orientation of these enterprises needs to be improved in the coming time to minimize this situation.

In general, based on the data on the situation of enterprises withdrawing from the market in the first 6 months of 2023, we see a significant increase in the number of enterprises suspending business and waiting for dissolution procedures. New and small businesses tend to have more difficulty in the early stages of operations and are at high risk of facing exit from the market. Attention and support is needed to help businesses stabilize and develop sustainably.

The above is the enterprise registration status in Vietnam in the first half of 2023 based on data of the Business Registration Management Department compiled and statistics by Viet An Law.

If you need to register for investment, register a business, change investment registration, change business registration or have a need for legal advice on business, investment and related fields, please contact Viet An Law Firm for the fastest and most effective advice and support.