Capital Size of the Enterprise sector in Vietnam

capital-size

Nationally, the average registered capital per enterprise has increased over the years, from VND 962 million in 2000 to VND 3.14 billion in 2006; equivalent to a 3.2 times increase. The average registered capital per enterprise was VND 8.1 billion in 2007 and was VND 8.7 billion in 2008. Generally, the average capital size per enterprise increased 9 times during the period of 2000 to 2008.

The average registered capital per enterprise varies among regions. According to reports from Departments of Planning and Investment in 2008, the Mekong River Delta region possessed the highest level of average registered capital (at VND 23.8 billion per enterprise), while the Northern Central region had the lowest level of average registered capital (at VND 5.45 billion). This was partly due to the establishment of some relatively large enterprises in the Mekong River Delta region in 2008. However, the amount of registered capital is self-declared by enterprises, and the law does not require enterprises to provide evidence of that capital figure. Therefore, statistical data on registered capital should be considered with some caution.

Average registered capital per enterprise, by region, in 2008

No. Region Average registered capital per enterprise

(VND billion)

1 Red River Delta 8.82
2 North eastern region 7.50
3 North western region 6.18
4 North Central region 5.45
5 South Central Coastal region 6.04
6 Highlands 9.92
7 South eastern region 6.63
8 Mekong Delta 23.80

From the regional perspective, the Southeast region has the highest number of registered enterprises (accounting for 39.78%), while the Red River Delta has the highest registered capital amount (accounting for 32.41%). The Northwest was the region having both the lowest number of registered enterprises and capital amount (accounting for 0.86% and 0.61%, respectively).

Percentage of registered enterprises and capital of regions in 2008

No Region % of registered enterprises % of registered capital
1 Red River Delta 32.04 32.41
2 North eastern region 4.69 4.04
3 North western region 0.86 0.61
4 North Central region 4.70 2.94
5 South Central Coastal region 7.01 4.86
6 Highlands 3.06 3.48
7 South eastern region 39.78 30.26
8 Mekong Delta 7.82 21.36

Source: Enterprise Information Center – Agency for Enterprise Development

Long An was the province with the highest average registered capital per enterprise (at VND 119.9 billion), and Tuyên Quang was the lowest with VND 2.21 billion. Localities which have average registered capital per enterprise of more than VND 10 billion include: Ninh Thuan (VND 14.34 billion), Ha Tinh (VND 12.46 bn), Hau Giang (VND 24.74 bn), Binh Phuoc (VND 11.35 bn), Lam Dong (VND 12.12 bn), Quang Ninh (VND 10.8 bn) and Ba Ria Vung Tau (VND 10.48 bn). In 2007, Ba Ria Vung Tau was the province with the highest registered capital per enterprise (at VND 18.63 bn), and Vinh Phuc was the lowest (VND 2.25 bn).

Among the different types of enterprise, shareholding companies have the highest amount of average registered capital, at VND 24.22 billion, while private companies display the lowest average level, of VND 1.05 billion (see table 8).

Average registered capital size in 2008 by types of enterprises

No Form of enterprise Average registered capital per enterprise (billion)
1 Private enterprise 1.046
2 Limited Liability Company with more than 2 members 3.109
3 Limited Liability Company with 1 member 5.402
5 Shareholding company 24.22

Source: Business Information Center, Agency for Enterprise Development.

Among 155,771 active enterprises at end-2007, the number of enterprises with capital from VND 1 to 5 billion accounted for the highest proportion (46.44%), and is the most common capital size of business in Vietnam. The number of Vietnamese enterprises which have capital size equal to the average level in the world (ie. greater than VND500 billion, or approximate US$27 million) is less than 1,000 (see table below ). By capital size, SMEs accounted for 84.66% of total businesses.

Number of enterprise classified, by capital size, as at end-2007

Capital size Number of enterprises Percentage (%)
Less than 0,5 million VND 18,646 11.97
From 0,5 million VND to 1 million VND 23,631 15.17
From 1 million VND to 5 million VND 72,342 46.44
From 5 million VND to 10 million VND 17,269 11.09
From 10 million VND to 50 million VND 16,353 10.50
From 50 million VND to 200 million VND 5,286 3.39
From 200 million VND to 500 million VND 1,355 0.87
From 500 million VND and above 889 0.57

Source: “The Real Situation of Enterprises”. Hanoi: 2006-2008, General Statistical Office.

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