Business formations in Vietnam surge 36% m/m in May

The end of the social distancing orders, along with effective support programs from the Vietnamese government, have directly contributed to a surge of 36.1% month-on-month in new business formations to 10,728 in May, according to the General Statistics Office. 

Data: GSO. Chart: Hai Yen.

This month also witnessed sharp increases of 20.1% month-on-month in combined registered capital of VND112.7 trillion (US$4.83 billion) and 27% in the number of workers employede by new enterprises at 91.500.

However, the number of newly-established enterprises in Vietnam in the first five months of 2020 was 48,300 with registered capital of a combined VND557.9 trillion (US$23.91 billion), down 10.5% in number and 16.7% in registered capital year-on-year. Average registered capital per newly-established enterprise was VND11.5 billion (US$492,930) during this period, down 6.9% year-on-year.

Taking into account VND817.4 trillion (US$35.03 billion) of additional capital pumped by active enterprises, total registered capital injected into the economy in the January-May period was VND1,375.3 trillion (US$58.95 billion), down 17% year-on-year.  

Among economic sectors, only electricity, gas and water production and distribution, and the sector of agro-forestry-fishery saw increases in the number of fresh enterprises with 928 and 794, respectively, up 95% and 5.6% year-on-year.

Meanwhile, most of the newly-established enterprises are in the fields of wholesale, retail, automobile repair with 16,335 enterprises, down 7.3% year-on-year. New businesses in the construction sector totaled 6,440, down 9.8%; followed by manufacturing and processing (6,223, down 9.1%); science, technology, consultancy, design, advertising and others (4,403, down 1.8%), among others.

The government-run office informed that 21,700 enterprises resumed operations, an increase of 10.5% against the similar period last year, bringing the total number of newly-registered and reinstated enterprises in the five-month period to 70,000.

The GSO added that the number of laborers of newly-established enterprises between January and May was 407,200, down 24.2% against the same period last year.

During this period, the number of enterprises temporarily ceasing operations surged 36.4% year-on-year to 26,000.

Moreover, the number of enterprises which completed procedures for bankruptcy was down 4.8% to 6,100, of which 5,400 enterprises had a capital base of less than VND10 billion (US$429,700).