The number of businesses halting operations declined 5.3% to 22,700 in the first five months of this year, with many waiting for opportunities to return the market, said Deputy Minister of Planning and Investment Dang Huy Dong.
Poorly-performing and less-competitive enterprises are likely to cease operations, dissolve or go bankrupt. This, to some extent, will help constantly restructure the economy, purify the business environment and create a basic foundation to increase national competitiveness and sustainable development, he said.
From January-May, the country had about 36,000 start-up businesses with total registered capital of nearly VND220 trillion (US$10.1 billion), up 15.5% in volume and 26.3% in capital over the same period last year. Close to 7,404 enterprises resumed operations in the first five months of this year, a year-on-year increase of 5.9%.
Compared to countries in the region and the world, the number of Vietnamese firms withdrawing from the market is within normal range and not concerning, Dong said, adding that looking at the flow of businesses joining and withdrawing from the market will offer a more comprehensive evaluation of the business panorama.
According to 2011 statistics from the European Council, the number of businesses leaving the market exceeded that of start-up businesses and the ratio of active firms after five years was 46%. Meanwhile, in Vietnam, about 550,000 or 66% of the 830,000 start-up businesses remain active.
The Deputy Minister said the market economy only nurtures healthy and creative initiatives, which is an objective rule.
Business registration and tax agencies have been working together to exchange information and closely monitor business activities and the State management agencies will continue to facilitate business expansion, he added.