76% of new firms are service providers

Ban Mai

Among the new firms, 477 are private entities, about 1,290 joint stock companies and roughly 10,100 limited liability companies. Total registered capital of these companies was about VND55.2 trillion. Compared to the same period in 2012, the number of new firms rose by 353 or 3.1% while their total capital fell by 25.5%.

Companies in the manufacturing-construction sectors account for 23.2% of the total number of new startups. The registered capital of a manufacturing entity averages out at VND3.8 billion, only equivalent to 36.8% of that of a company in the construction sector but 95% of that of a service provider.

Regarding the high proportion of service companies among the new market players, a trade expert noticed many entrepreneurs are inclined to choose the service industry to resume business after a long time struggling with difficulties and bankruptcy, as investment for the service business is generally lower than in other sectors.

Multiple companies that are exhausted and bankrupt due to tough business conditions over the past time just have little accumulated capital left, and this is why they have shifted to the service industry, the expert explained.

About 8,300 entities halted operation in January-May, representing 59.3% of the total number of new firms in the same period, the statistics office reported.