Ratio of enterprises entering the market to the number of enterprises withdrawing from the market. Graphics: Thanh Huyen

Enterprises entering and re-entering the market are still slow. Updated data from the Department of Business Registration Management (Ministry of Planning and Investment) for the past 11 months continues to record this situation. The excitement in business activities has not returned.

The ratio of new businesses entering the market to the number of businesses leaving the market, although it has increased compared to the beginning of the year, is still around 1.2. Compared to the ratio of 3.6 in 2019 (the year before the pandemic) or the ratio of 2.3-2.4 in 2021-2022 - the time when the pandemic peaked in Vietnam, the growth rate of the number of businesses in Vietnam is very low.

Putting this rate next to the still very low growth rate of private investment capital in the first three quarters of the year (only increasing by 7.1%, less than half the increase of the period 2015-2019), we can see that the speed and method of recovery and return of the private economic sector continue to need to be prioritized in the Government's efforts to remove institutional bottlenecks.

The difficulties of businesses at this time are not only unpredictable signals appearing more and more from the world market, about the gloom of the domestic production sector.

There are also difficulties from concerns about the possibility of disruption, delay, or even work stagnation due to changes in the process of restructuring and streamlining the apparatus.

In the past 11 months, the country recorded 218,522 enterprises entering and re-entering the market, of which 147,244 were newly registered, down 0.52% over the same period in 2023. The capital and number of registered employees of newly established enterprises also decreased.

Business registration situation in the first 11 months of 2024. Source: General Statistics Office

These enterprises are mostly small in scale (under 10 billion VND), operating mainly in the service sector (accounting for 75.63% of the total number of newly established enterprises). The industrial, construction and agricultural sectors recorded a decrease compared to the same period.

During the same period, 173,179 businesses withdrew from the market, although half of them chose to temporarily suspend operations in the short term. Notably, the number of dissolved businesses increased by 19.8% compared to the same period in 2023, occurring in 14 out of 17 main business sectors. These are businesses that have completely ceased to exist in the market.

In particular, November data showed a significant decrease in the number of new enterprises, such as a decrease of 22.65% in the number of newly registered enterprises and a decrease of 27.16% in registered capital compared to the same period in 2023; a decrease of 10.9% in the number of returning enterprises compared to October 2024.

If this situation does not improve, the goals of reaching 1.5 million operating enterprises by 2025 or even 2 million enterprises by 2030 will become increasingly difficult. That is not to mention the higher goals of competitiveness, the participation of Vietnamese enterprises and brands in the global value chain...

Over the past 11 months, the country recorded 218,522 enterprises entering and re-entering the market .

However, when analyzing the above figures, besides concerns about the decline in quantity and the loss of strength, economic experts are seeing opportunities opening up from the changes, even laying the foundation for a breakthrough in productivity and quality of the business sector.

The strong and drastic shift from process-based management to goal-based management, protection, creating space and trust for civil servants to implement, as well as establishing an efficient and streamlined apparatus... will certainly create a better business environment, more favorable for creativity, innovation, the emergence and development of new business plans and models.

Of course, changes can cause disruptions, requiring review, screening, and elimination of regulations and practices based on old thinking. However, economic experts expect that the principle that needs to be agreed upon is that reforms and changes should not hinder the activities of people and businesses. Reforms and changes must make procedures faster and more convenient, so that practical requirements and demands can be resolved faster and more effectively.

25 years ago, with the mindset of allowing businesses to do what the law does not prohibit, reflected in the Enterprise Law and the system of guiding documents, changing the way the State treats businesses, Vietnam has achieved a breakthrough in the number of businesses, forming a private business community.

Currently, the reform thinking is for the State to return to its rightful position of creating, encouraging, supporting development, and creating opportunities for businesses to have a turning point in their existing development. The problem is that business confidence will depend on practical actions and consensus at all levels.