ECONOMY

Businesses blooming again

New corporate registrations outnumbered departures by far in the year’s first eight months

businesses-blooming-again

The number of enterprises set up in January-August 2021 came close to pre-pandemic levels, while that of businesses exiting the registers dropped by almost 50% compared to the same period last year.

Even though the country is in its second year of the coronavirus pandemic, it has maintained a positive balance of new entries and exits in the corporate registers, which shows the strength and stamina of the economy; it also reveals there are opportunities to be found in the local business scene and that the corporate support measures against the effects of the pandemic have served as a very efficient safety net.

According to the database of the General Commercial Register (GEMH), in the period from January 1 to August 31 the number of new companies came to 25,311, up from 24,853 in the same period in 2020, while in the first eight months of 2019 they had come to 25,778.

At the same time there was a 46.5% decline in GEMH deregistrations: In the year to end-August they amounted to 5,385, down from 10,070 in the same period in 2020 and 11,778 in 2019.

The trend recorded by the GEMH database matches that by the Hellenic Statistical Authority (ELSTAT), even though there are some notable disparities in the absolute figures. This is to a great extent attributed to the fact that GEMH records the creation of an enterprise (once a business is registered in it) and not necessarily the actual start of the company’s operation, which could be significantly delayed due to the bureaucratic procedures required for licensing, even if a corporation has been set up years earlier.

The key question is whether the rising trend in registrations continues when the support measures are further reduced, and what the impact of any new restrictions could be, even if there isn’t a full lockdown.

For example, as of September 13, indoor food service establishments will only allow vaccinated patrons or those who have recovered from Covid-19 in the last six months, which reduces the number of potential customers.