Vietnam’s Ministry of Planning and Investment reports that almost 64,000 companies have either suspended or dissolved their operations this year, an 11% increase over 2019.
The ministry's Business Registration Management Department (BRMD) said that approximately 33,000 of these companies have registered to temporarily suspend operations, a 40% increase year-on-year, when compared to 2019, and the highest number since 2015.
Most of the companies that have suspended or dissolved their operations are considered Small and Medium Size Enterprises (SME’s) with capital of $430,000 or less, and had been in operation for less than five years.
The sectors with the highest rate of closures have been companies in catering services, entertainment, hotels and lodging and real estate.
According to BRMD statistics, 8,940 enterprises have gone out of business at this time, and 21,800 enterprises are awaiting the completion of dissolution procedures. The three largest categories for companies that are being dissolved are construction, retail, processing and wholesale businesses.
The BRMD also reported that for the period of January 1 through July 31, 75,000 new enterprises were established, which is the lowest number in the last five years.
According to the BRMD, their analysts believe that when analyzing data from the beginning of the year with August data, the negative impact of the Covid-19 epidemic is slowing down, although their analysis was done before the current Covid-19 outbreak in Da Nang took effect.