31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Dec 29, 2020 / 08:24

Business formations in Vietnam down 2.3% in 2020 amid Covid-19 pandemic

A survey found that 81% of manufacturing and processing enterprises expected stability and even improvements in performance in the first quarter of 2021.

New business formations in December decreased by 18.4% month-on-month to 10,700, but the total number in 2020 remained encouraging at 134,900 amid the Covid-19 impacts, a slightly down of 2.3% year-on-year, according to the General Statistics Office. 

 Business registration process at Hanoi's Department of Planning and Investment. Photo: Pham Hung. 

This month witnessed a surge of 25.3% month-on-month in combined registered capital to VND356.8 trillion (US$15.45 billion) and a fall of 39% in the number of workers hired by new enterprises to 73,000.

The number of newly-established enterprises in Vietnam in 2020 was 134,900 with registered capital of a combined VND2,235.6 trillion (US$96.8 billion), down 2.3% in number but up 29.2% in registered capital year-on-year. Average registered capital per newborn enterprise was VND16.6 billion (US$719,000) during this period, up 32.3% year-on-year.

Taking into account VND3,341.9 trillion (US$144.7 billion) of additional capital pumped by active enterprises, total registered capital injected into the economy in 2020 was VND5,577.6 trillion (US$241.52 billion), up 39.3% year-on-year.  

The government-run office informed that 44,100 enterprises resumed operations in the period, an increase of 11.9% inter-annually, bringing the total number of newly-registered and reinstated enterprises in 2020 to 179,000, up 0.8%.

The GSO added that the number of laborers hired by newly-established enterprises this year was 1.04 million, down 16.9% against the same period last year.

During this period, the number of enterprises temporarily ceasing operations surged 62.2% year-on-year to 46,600.

Moreover, the number of enterprises which completed procedures for bankruptcy was up 3.7% to 17,500.

A survey on the business sentiment in the manufacturing and processing sector in the fourth quarter showed 40.6% of enterprises saw improvements in business performance compared to the previous quarter; 24.7% were facing difficulties and 34.7% said their businesses remained stable.

For the first quarter of 2021, 42.8% of the surveyed enterprises predicted a positive outlook for their operation compared to the fourth quarter of this year; 19% expected more difficulties and 38.2% saw stability.