Real estate business withdrawals increase
In the report sent to National Assembly delegates, the Ministry of Planning and Investment provided assessments of the number of businesses withdrawing from the market, classified by type and field of operation to have timely support solutions.
The Ministry of Planning and Investment said that in 2022, 143,198 enterprises nationwide withdrew from the market, an increase of 19.5% over the same period in 2021.
Some industries have a high number of businesses withdrawing, such as: Real estate business (up 42.4%); Finance, banking and insurance (up 35.4%); Science, technology; consulting, design services; advertising and other expertise (up 31.6%); Education and training (up 31.2%); Information and communication (up 28.5%); Processing and manufacturing industry (up 23.8%); Health and social assistance activities (up 19.9%); Construction (up 18.8%), etc.
Enterprises withdrawing from the market are mostly small-scale (from 0-10 billion VND), mainly in the service industry with 101,732 enterprises, accounting for 71% of the total number of enterprises withdrawing from the market, an increase of 19.6% compared to 2021.
In the first 5 months of 2023, 88,040 enterprises withdrew from the market, an increase of 22.6% over the same period in 2022. These enterprises mainly focused on the fields of real estate business (up 47.1%); Healthcare and social assistance activities (up 42%); Accommodation and catering services (up 32.8%); Warehousing and transportation (up 28.6%); Construction (up 25.5%),...
Reviewing data on business registration, the Ministry of Planning and Investment found that: Real estate business continues to be the sector under the most pressure and impact when the number of real estate businesses withdrawing from the market tends to increase sharply in 2022 (up 42.4% compared to 2021) and in the first 5 months of 2023 (up 47.1% compared to the same period in 2022).
"The number of businesses withdrawing from the market tends to increase faster than the number of businesses entering and re-entering the market," the Ministry of Planning and Investment noted.
The Government and ministries and sectors are drastically implementing synchronous solutions on accessing capital sources, supporting interest rates, finding markets, orders, etc. to promptly support businesses to overcome this period, especially in industries and sectors with an increasing number of businesses withdrawing from the market in recent times.
The reason why businesses have increasingly smaller capital
Many opinions say that the average registered capital of newly established enterprises has decreased compared to the same period in 2021, reflecting the great difficulties of the private sector and the economy.
The Ministry of Planning and Investment also acknowledged this reality and cited data showing that the average registered capital per enterprise in 2022 reached VND 10.7 billion, down 22.3% compared to 2021. The average registered capital per enterprise in the first 5 months of 2023 reached only VND 9.2 billion, down 24.1% compared to the same period in 2022, down 34.2% compared to the same period in 2021.
This is the lowest level in the first 5 months of the year since 2017.
In the first 5 months of 2023, this situation continued. The total registered capital of newly established enterprises reached VND 568,711 billion, only equal to more than 70% of the total capital in the same period in the years affected by the Covid-19 pandemic (in 2021, this figure was VND 778,327 billion and in 2022, it was VND 761,035 billion).
The reason, according to the Ministry of Planning and Investment, is due to the rapid, complex, and negative fluctuations of the world situation that have severely affected our country's economy from the second half of 2022, lasting into 2023. The financial and monetary markets have risks that negatively impact the safety of the system as well as the role of providing capital for the economy. High lending interest rates, the stock market has declined, the bond mobilization channel has almost frozen; the endurance of businesses has been eroded after a period of coping with the Covid-19 pandemic.
These factors combine to block the flow of money in the economy, directly affecting the production and business activities of enterprises.
In addition, most Vietnamese enterprises are small and medium-sized, newly established, with vulnerable financial situations and do not have collateral as required, making it difficult to access bank capital.
The Ministry of Planning and Investment assessed: The Vietnamese business community is facing continuous difficulties and challenges. Unpredictable fluctuations continuously erode the health of businesses, so businesses need to be supported to overcome difficult times, recover and develop stably.
First of all, support businesses, especially small and medium enterprises, to recover and develop production through solutions to stabilize the financial and monetary markets, remove capital difficulties, facilitate access to credit; promote the implementation of fiscal policies such as reducing taxes and fees, extending salary loan policies, supporting workers to rent houses to help businesses reduce costs, have money to maintain production and business and retain workers.
Second, promote institutional reform, cut administrative procedures and business conditions, especially make policy implementation by administrative agencies at all levels more convenient; resolve unclear, overlapping, and conflicting legal regulations between sectors and fields.
While the economy is still facing many difficulties and is difficult to predict, in addition to support from state management agencies, the Ministry of Planning and Investment believes that: Enterprises need to proactively have plans to respond to unexpected situations or unforeseen crises.
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