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Enterprise numbers on rise as new laws kick in

Released at: 15:48, 31/12/2015

Enterprise numbers on rise as new laws kick in

New enterprise and investment laws behind increasing number of businesses being established.

by Hung Nguyen

The number of new enterprises being established reached a record high in 2015, reaching 94,700, according to the Agency of Business Registration (ABR) under the Ministry of Planning and Investment (MPI). “Businesses have been opening in ever-increasing numbers for the last decade,” said Mr. Bui Anh Tuan, Deputy Director of ABR.

Since the Law on Enterprises 2014 and the Law on Investment 2014 took effect on July 1 the number of new enterprises stood at 6,900 in July, 9,300 in August, 7,000 in September, 9,200 in October, 9,300 in November, and 7,900 in December.

More importantly, VND601.52 trillion ($26.74 billion) in investment came into the economy in 2015 from these new enterprises, while VND851.02 trillion ($37.84 billion) came in additional capital at existing enterprises, for a total of VND1,452.5 trillion ($64.59 billion).

Mr. Nguyen Dinh Cung, Director of the Central Institute for Economic Management (CIEM), said the Law on Enterprises and the Law on Investment have given more independence to enterprises and cut administrative procedures, making it more straightforward to open a business.

The number of enterprises closing or temporarily ceasing operations, meanwhile, remains high, with ABR figures showing that 9,500 enterprises completed documents for closure in 2015, a decline of just 0.4 per against 2015. The number of enterprises temporarily ceasing operations stood at 71,400, an increase of 22.4 per cent against 2014.

Mr. Nguyen Bich Lam, Director of the General Statistic Office, said that new enterprises being established and others closing their doors is a common occurrence in a market economy. Economist Pham Chi Lan said that Vietnamese enterprises, especially small and medium-sized enterprises, continue to face a host of difficulties and this raises questions over the effectiveness of support policies. Given the ASEAN Economic Community is on its way, she added, Vietnamese enterprises will find it harder to compete with regional counterparts. Foreign enterprises in Vietnam only look at the advantages the country provides in cheap labor and market demand but not do pay any attention to the development of local enterprises. She therefore suggested a rethink on support policies so that they strengthen the local business community.

Enterprises Closing or Suspending Business Operations, 2011-2015











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