Somber start to 2021 as 33,600 businesses dissolve, suspend operations

According to the Department of Business Registration under the Ministry of Planning and Investment, the first two months of the year saw 33,611 firms quit the market and around 18,100 new companies established.

The number of companies dissolved or suspending operations marked an 18.6 percent year-on-year increase, the department said. Of these, 21,636 firms have temporarily suspended operations, 8,380 have halted operations to complete dissolution procedures and more than 3,595 dissolved.

Those halting operations were in various sectors including retailing, lodging and catering services, tourism, and construction. They are reassessing their situation, watching the market and looking for new ideas and policies before making a final decision on whether or not they will shut down their business permanently, the department said.

It noted that the number of dissolved businesses, mostly in sectors like electricity, water, gas production and distribution, warehousing and mining, underwent a 28 percent year-on-year surge.

A textile factory in the northern Thai Nguyen Province, February 6, 2020. Photo by VnExpress/Ngoc Thanh.

The number of new companies, meanwhile, decreased 4 percent year-on-year, and that of those returning to the market down nearly 8 percent against the same period last year at around 11,000.

Businesses returning back to the market were mostly in sectors negatively hit by the Covid-19 pandemic, like art, entertainment and education, and lodging and catering services, mining, agriculture, forestry and fisheries.

Some less vulnerable sectors like electricity, water, cooking gas, medical and several social services saw a surge in the number of newcomers compared to the same period last year. This was also true of the real estate sector.

Explaining the situation, the department said that these firms wanted to take advantage of the foreign capital flowing in and the shift happening in production chains.