Life Cycle and Vitality of Vietnamese Enterprises: Formation, Temporary Suspension and Market Withdrawal

This paper examines how Vietnamese enterprises enter, pause and leave the market over the decade 2015–2024, a period that begins with the entry into force of the 2014 Law on Enterprises and ends with the post-pandemic adjustment. Using official secondary data from the General Statistics Office and the Business Registration Management Agency, we assemble an annual series of five registration flows: Newly established firms, firms returning to operation, registered temporary suspensions, firms that have ceased operation and are awaiting dissolution, and completed dissolutions. The analysis is descriptive and follows the logic of business demography statistics rather than an econometric model. Over the decade, 1.32 million enterprises were newly registered and 0.43 million returned from dormancy, while 1.16 million withdrawal events were recorded. The withdrawal-to-entry ratio fell from 0.70 in 2015 to 0.47 in 2017, then rose almost continuously to 0.85 in 2024. Three features stand out. First, the dominant form of exit has shifted from formal closure to temporary suspension, whose share in all withdrawal events rose from 19% to 51%. Second, the pool of dormant firms is no longer clearing: Since 2021, returns to operation have been smaller than the previous year's suspensions in every year except 2022. Third, new firms have become lighter, with registered employment per new firm falling from 15.5 to 6.4 workers. Formal dissolution remains slow, as roughly three firms join the dissolution queue for every one that completes the procedure. We argue that the headline record in firm creation hides a weakening in firm vitality, and that the policy agenda should move from counting registrations towards supporting survival, orderly exit and re-entry.