The number of enterprises resuming operation in the capital city surged by 51% year-on-year to 644 in May, the municipal Statistics Office revealed in its monthly report.

“Local authorities’ supportive measures for the business community remained a key factor leading to high rate of enterprises resuming activities,” stated the agency.

Production at Garment 10 Company. Photo: Kinhtedothi

In May, the city licensed 2,238 new enterprises with a combined registered capital of VND42.3 trillion (US$1.84 billion), representing increases of 8% in number and 69% in capital value year-on-year, respectively.

For the five-month period, nearly 11,000 new enterprises were established with registered capital of VND132 trillion (US$5.74 billion), up 11% year-on-year in number but down 7% in the capital.

While the number of enterprises temporarily suspending operation rose by 22% year-on-year to nearly 7,000, the number of those that have returned to operation increased by 95% year-on-year to 5,400.

Along with drastic measures against the pandemic, Hanoi has been further improving online business registration to ensure that all enterprises registered for establishment via the Internet, prioritizing fields with high potential for development, including manufacturing and processing, electricity production, and distribution.

In a recent press release issued by the Hanoi People’s Committee, the city also aims at accelerating the disbursement of public funds, addressing concerns of businesses affected by the pandemic, and pushing for the construction of new industrial clusters.

The city’s authorities have assigned the Department of Taxation to provide instruction for business households and enterprises to apply for deferral of payment of taxes and land rental fees.

Facing pressure to keep balanced working capital

Vietnam in the first five-month period has nearly 55,800 newly established enterprises with registered capital of VND778.3 trillion (US$33.83 billion), up 15.4% in number and 39.5% in the capital.

Taking into consideration 22,600 enterprises resuming operation during the period, the total of newly founded and reinstated enterprises stood at 78,300 during the period.

However, the difficult market situation led to around 59,800 enterprises temporarily leaving the market or processing their dissolution, an increase of 23% year-on-year.

This resulted in an average of 12,000 enterprises suspending operation per month, or 400 in a day.

A recent study from the Private Economic Development Research Board (Board IV) noted the majority of enterprises are under pressure to keep a balanced working capital.

“The situation only gets worse as the pandemic continues to persist,” it added.

In Bac Giang, one of Vietnam’s major Covid-19 epicenter, four industrial parks were forced to suspend operation since May 18. So far, the Management Board of Bac Giang Industrial Parks has only allowed nine enterprises to restore business activities.