Figures from the General Statistics Office (GSO) showed that nearly 37,600 new firms were established in Vietnam, with registered capital of a combined 445.2 trillion VND (19.1 billion USD) in the first four months of this year, down 13.2 percent in number.

In April, the country had more than 4,000 companies stopping operations, increasing 68 percent from the previous month. The number of dissolved enterprises totalled over 3,000. The number of dissolved firms or those halting operations was up to 42,000.

Businesses have to review their targets, strategies and activities to affirm their position and establish new supply chains. (Photo cafef.vn)

The reason was due to the COVID-19 pandemic, causing a downturn for both the global economy and Vietnam. This has made firms face difficulties and had to go bankrupt.

GSO General Director Nguyen Bich Lam said the target of having one million new businesses in 2020 was extremely hard and even impossible.

Lam said though the number of companies resuming operations increased by 2.1 percent in the period, the number was much lower than that of the same period last year. If the country could maintain last year's record growth rate of more than 138,000, the total number of businesses is expected to reach 900,000 this year.

However, economist Nguyen Minh Phong has a more positive view, saying that the COVID-19 pandemic would pose a big challenge for the set target, but there is still the potential to complete it.

The country now has 5-7 million household businesses which have scale and effectiveness similar to small-and-medium sized enterprises (SMEs). In addition, the Ministry of Finance submitted a proposal to the National Assembly to approve new policies to give financial supports for SMEs as well as new firms established from household businesses. Accordingly, there would be policies for corporate income tax reductions or exemptions for such firms.

Phong expected that the number of new enterprises in Vietnam would see a breakthrough this year thanks to the support policies.

“Although it is not really sure, but with many expectations, we will strive to achieve the goal of one million businesses. From 2021, we believe that there will be new breakthroughs,” Phong added.

He said there would be new changes in the market in a state of “new normal”, including requirements of improving product quality, the interruption of traditional supply chains to open new business opportunities, new sectors and new partners. Especially, there would be new modern business methods based on e-commerce platforms.

Businesses therefore have to review their targets and strategies as well as activities to affirm their position and establish new supply chains.

“Firms should pay attention to upgrading technologies to improve quality and competitiveness. They should have scenarios for different situations in the future," he added./.