Resurgence of Enterprises in Vietnam in First 9 Months of 2024

In a promising development for Vietnam’s business landscape, the General Statistics Office (GSO) has reported that nearly 121,900 new enterprises were established in the first nine months of this year, bringing total registered capital to approximately 1.158 quadrillion VND (approx. US$46.7 billion). This marks a year-on-year increase of 3.4 percent in both the number of businesses and their registered capital, reflecting a steady growth trajectory amidst ongoing economic challenges.

Key highlights

• New enterprises and workforce: The newly registered businesses collectively accounted for 735,000 workers. However, this figure indicates a decline of 3.4 percent compared to the same period last year, suggesting that while entrepreneurship is on the rise, employment levels in new firms are struggling to keep pace.
• Average registered capital: The average registered capital for these new enterprises stood at approximately 9.5 billion VND, demonstrating a healthy influx of investment despite a slight downturn in overall capital contributions to the economy. The total added registered capital amounted to 2.31 quadrillion VND, which reflects a decrease of 6.1 percent from the previous year.
• Resumption of operations: A noteworthy trend is the resurgence of enterprises returning to operations, with over 61,100 companies resuming activities in the first nine months. This figure represents a substantial 25 percent increase compared to the same period in 2023. The combination of new enterprises and those reinstating operations totals 183,000, showcasing a year-on-year growth of 9.7 percent.

Challenges and concerns

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Despite the positive indicators, the business environment remains fraught with challenges. The January-September period saw 86,900 enterprises temporarily suspending operations, a significant year-on-year rise of 14.7 percent. Furthermore, nearly 61,500 companies are currently in the process of dissolution, marking a 33.4 percent increase, while 15,400 enterprises officially ceased operations, up 18.9 percent from last year.

In September alone, Vietnam recorded 11,200 newly established enterprises with a registered capital of 92.8 trillion VND. However, this represents a month-on-month decline of 16.3 percent in the number of businesses and a 25.5 percent drop in registered capital, signaling potential volatility in the market.

Government support initiatives

In response to these mixed signals, the Ministry of Planning and Investment is taking proactive measures to support businesses. The government plans to implement effective policies aimed at bolstering both enterprises and the general public. Key initiatives include promoting domestic consumption and launching campaigns that encourage citizens to prioritize using locally produced goods.

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Moreover, efforts to attract both domestic and international tourists are expected to further stimulate economic activity, providing much-needed relief to the struggling import-export sector and enhancing overall business prospects in Vietnam.

Conclusion

The latest figures on enterprise activity in Vietnam present a cautiously optimistic outlook for the business sector. While the establishment of new enterprises and the return of previously suspended businesses indicate a resilient entrepreneurial spirit, the increase in business closures and suspensions highlights the need for continued government intervention and support. As Vietnam navigates its economic recovery, the focus on enhancing domestic consumption and attracting tourism will be critical in sustaining this momentum and fostering a robust business environment.

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