Real estate businesses retreating high
In the report sent to the National Assembly deputies, the Ministry of Planning and Investment made an assessment of the number of enterprises withdrawing from the market, classified by type and field of operation to have timely support solutions.
According to the Ministry of Planning and Investment, in 2022, the country has 143.198 enterprises withdrawing from the market, an increase of 19,5% over the same period in 2021.
In which, there are a number of industries with a high number of businesses withdrawing such as: Real estate business (up 42,4%); Finance, banking and insurance (up 35,4%); Science and technology; consulting and 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%),…
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, up 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. This number of enterprises mainly focused on the real estate business (increased by 47,1, first%); Health and social assistance activities (up 42%); Accommodation and catering services (up 32,8%); Transportation and warehousing (up 28,6%); Construction (up 25,5%),…
Reviewing the data on business registration, the Ministry of Planning and Investment found that: Real estate business continues to be the most pressured and affected sector 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% over the same period in 2022).
"Enterprises withdrawing from the market tend to increase faster than the number of enterprises entering and re-entering the market", the Ministry of Planning and Investment noted.
The Government and ministries and sectors are drastically implementing solutions in a synchronous manner in terms of accessing capital, supporting interest rates, searching for markets, orders, etc. to promptly support businesses to overcome this period, especially in industries and fields where business data has withdrawn from the increasing market in recent years.
The reason why businesses start up with smaller and smaller capital
Many people think that the average registered capital size of newly established enterprises decreased compared to the same period in 2021, reflecting great difficulties of the private sector and the economy.
The Ministry of Planning and Investment also acknowledged this fact and cited data showing that the average registered capital per enterprise in 2022 reached 10,7 billion VND, down 22,3% compared to 2021. The average registered capital per enterprise in the first 5 months of 2023 was only 9,2 billion VND, down 24,1% over the same period in 2022, down 34,2% over the same period in 2021.
This is the lowest level in the first five months of the year since 5.
For the first five months of 5, this situation continues. The total registered capital of newly established enterprises reached VND 2023 billion, just over 568.711% of the total capital of the same period in the years affected by the Covid-70 pandemic (this figure is VND 19 billion in 2021 and VND 778.327 billion in 2022).
The reason, according to the Ministry of Planning and Investment, is due to the rapid, complicated and negative fluctuations of the world situation, which heavily affect our economy from the second half of 2022, extending to 2023. The financial and monetary market has risks that negatively affect the safety of the system as well as the role of capital supply for the economy. Lending interest rates are high, the stock market declines, the bond mobilization channel is almost frozen; The endurance of businesses has been eroded after a period of resistance to the Covid-19 pandemic.
These factors combined to clog the cash flow in the economy, directly affecting the production and business activities of enterprises.
In addition, most Vietnamese enterprises are small and medium-sized, newly established, have a vulnerable financial situation, do not have collateral according to regulations, so it is difficult to access bank capital.
The Ministry of Planning and Investment assessed: The Vietnamese business community continuously faces difficulties and challenges. Unforeseeable fluctuations continuously erode the health of enterprises, so businesses need to be energized to overcome difficult times, recover and develop stably.
First of all, support enterprises, especially small and medium enterprises to recover and develop production through solutions to stabilize financial and monetary markets, remove difficulties in capital, and facilitate access to credit; to step up the implementation of fiscal policies such as reducing taxes and fees, extending the loan policy for salary payments, and supporting workers to rent houses to help businesses reduce costs, have money to maintain production and business, and retain employees.
Second, promote institutional reform, reduce administrative procedures, business conditions, especially the organization of policy implementation of the administrative apparatus at all levels must be more favorable; resolving legal provisions that are still not specific, overlapping and contradictory between sectors and fields.
While the economy is still facing many difficulties and unpredictable, in addition to the support from state management agencies, the Ministry of Planning and Investment said that: Enterprises need to proactively plan to respond to unexpected situations or unforeseen crises.
