Report on business registration and FDI in July/2024 (Part 1)

I. Report on the business registration situation in July and the first 7 months of 2024 nationwide

In July 2024, the business registration situation in Vietnam had notable changes, specifically:

1. New registration:

There are 9/17 industries recording an increase in the number of newly established companies compared to the same period in 2023. Specifically:

9/17 Industries Witness An Increase in Newly Established Companies Compared To Same Period 2023

• Warehouse transportation increased by 20.4%;
• Wholesale, retail and repair of cars and motorbikes increased by 14.0%;
• Production and distribution of electricity, water and gas increased by 12.5%;
• Arts, entertainment and recreation increased by 10.3%;
• Information and communication increased by 8.6%;
• Processing and manufacturing industry increased by 8.5%;
• Other service activities increased by 4.7%;
• Real estate business increased by 2.5%;
• Construction increased by 1.1%.

In contrast, the remaining industries will see a decrease in the number of newly established companies compared to the same period in 2023, including:

Industries Witness A Decrease in Newly Established Companies Compared To The Same Period in 2023

• Agriculture, forestry and fisheries decreased by 2.8%;
• Education and training decreased by 3.4%;
• Science, technology, consulting services, design, advertising and other expertise decreased by 4.3%;
• Finance, banking and insurance decreased by 4.4%;
• Employment services, tourism, rental of machinery, equipment, appliances and other support services decreased by 8.0%;
• Health and social assistance activities decreased by 9.9%;
• Accommodation and food services decreased by 10.7%; and
• Mining decreased by 14.5%…

In all 6 regions nationwide, the number of registered companies increased compared to the same period in 2023. Specifically:

Newly Business Registrations Increase Compared To The Same Period in 2023

• The Northern Midlands and Mountains recorded 4,990 companies, increased by 11.2%;
• The Southeast reached 40,382 companies, increased by 9.4%;
• The Mekong Delta has 6,931 companies, increased by 7.3%;
• The Red River Delta reached 29,611 companies, increased by 3.4%;
• The Central Highlands recorded 2,401 companies, increased by 2.3%; and
• The North Central and Central Coast reached 10,902 companies, increased by 1.2%.

2. Resumption of Operations:

After the temporary shutdown, 7,024 companies returned to operation recorded in July 2024.

The whole country has nearly 44,273 companies returning to operation in the first 7 months of 2024 (up 4.7% over the same period in 2023).

3. Withdrawing from the market:

Also in July 2024, the country recorded 15,602 companies leaving the market, an increase of 13.7% over the same period in 2023, including:

Businesses Withdraw From The Market in July/2024

• 6,837 companies registered to temporarily suspend business for a limited time, up 26.2% over the previous month and down 0.7% over the same period in 2023;
• 7,035 companies ceased operations and are awaiting dissolution procedures, up 30.2% over the previous month and up 33.8% over the same period in 2023;
• 1,730 companies completed dissolution and terminated their existence, down 22.4% over the previous month and up 9.4% over the same period in 2023.

Nationwide, in the first 7 months of 2024, 125,456 companies withdrew from the market, a 10.7% increase over the same period in 2023. The majority of these companies chose to temporarily suspend business operations in the short term (62.2%) and were primarily concentrated in January 2024 (43%). Specifically:

Businesses Withdraw Nationwide in the First 7 Months of 2024

• The number of companies temporarily suspending business is 78,002, a 16.7% increase over the same period in 2023.
• The number of companies waiting for dissolution procedures is 35,531, down 1.5% over the same period in 2023.
• The number of dissolved companies is 11,923, a 14.5% increase over the same period in 2023.

4. Conclusion

In the context of ongoing economic challenges, the company registration situation in Vietnam in July 2024 presents a complex picture. Although the number of new companies and returning companies shows an upward trend, along with the recovery of certain industries, the number of companies leaving the market has also significantly increased, particularly among small companies with a short operational history. These fluctuations reflect the challenges and opportunities within the current business environment, necessitating flexibility in companies’ operational policies to adapt to the constant changes in today’s economy.

To learn more about the Report on business registration and FDI in July/2024 (part 2), check out for more details to understand the Foreign Direct Investment in Vietnam in July/2024 landscape: [Part 2]

Are businesses considering setting up business in Vietnam? PLF Law Firm offers comprehensive business consulting services on Doing Business to guide you through business registration and the Foreign Direct Investment (FDI) process in Vietnam.

With our expertise and local knowledge, PLF Lawyers can help businesses navigate the regulatory landscape, establish a strong corporate presence, and capitalize on the country’s thriving economy.

Contact PLF Law Firm today via email at inquiry@plf.vn or +84913 902 906 or Zalo | Viber | WhatsApp to receive a free 30-Initial Minute Consultation.

References:

Statistics on Business Registration in 2024

Trends in Business Registration in July and First Seven Months of 2024

Report on Business Registration July and First Seven Months of 2024

Time of writing: 28/08/2024

PLF Law Firm