Vietnam logged 8,740 newly-established enterprises with total registered capital of 122.8 trillion dong ($5.3 billion) last month, according to the General Statistics Office (GSO).

These figures were sharply down by 22.8 per cent and 25.3 per cent in the number of newly registered enterprises and the registered capital respectively from the previous month.

The significant decrease comes amid complicated changes resulting from the deepening Covid-19 pandemic, fuelled by the rapid spread of the Delta variant of the novel coronavirus.

Despite a sharp decrease in July, the number of newly established enterprises in the first seven months of this year still increased by 0.8 per cent year-on-year, at 75,800 enterprises. As a result, more than one quadrillion dong is set to be added to the economy in the near future.

The country also had nearly 26,600 firms registering to increase their capital by a total of 1.36 quadrillion dong.

In addition, 29,600 enterprises returned to operation, up 3.6 per cent year-on-year, bringing the total number of newly established enterprises and those returning to operation in the seven-month period to 105,400. On average, nearly 15,100 businesses were newly established or returned to operation each month.

However, the number of enterprises halting their business or waiting for dissolution also increased significantly by 25.5 per cent year-on-year, at 79,700 enterprises.

Of these, nearly 40,300 firms halted business, representing a 23 per cent year-on-year increase; 28,000 enterprises stopped operating and were waiting for dissolution procedures, up 28.6 per cent. Another 11,400 companies completed dissolution procedures, up 27.4 per cent.

Thus, on average, nearly 11,400 businesses withdrew from the market a month.

According to the GSO, the complicated situation caused by the Covid-19 pandemic and implementation of social distancing in 20 localities have affected business registrations in the first seven months of 2021.

The number of newly established enterprises in the period decreased in sectors such as electricity, gas, water production and distribution (63.7 per cent), accommodation and food services (10.7 per cent), employment services, tourism, rental of machinery and equipment, furniture and other support services (10.5 per cent) and construction (3.7 per cent).

Central Institute for Economic Management deputy director Phan Duc Hieu pointed out that the pandemic has had a strong impact on the goods supply and demand chain, impacting business opportunities, causing the number of enterprises entering the market to decrease sharply.

In the context of the many difficulties and challenges due to Covid-19, the government has issued policies to support businesses as well as directed ministries and localities to provide them with favourable conditions.

Voicing confidence in the government’s pandemic response, Hieu said production and business activities would return to their former vibrant states, and newly established enterprises would increase again once Covid-19 is controlled.

VIET NAM NEWS/ASIA NEWS NETWORK