Growth in number of new firms in CR fastest since 2009 in H1

​A total of 12,847 Czech companies were set up and 2,725 companies were dissolved in the first half of 2014, with the ratio of newly set up firms to dissolved ones of 4.7 being the highest since 2009, according to an analysis released by company CRIF - Czech Credit Bureau.
 

​This year's development indicates that the growth in the number of companies has accelerated again since 2011, CRIF analysts Vera Kamenickova said.

The number of companies increased in all the main sectors in the first half of this year, according to the analysis, based on data of portal on company information cribis.cz.

The highest number of companies was established in the segment of scientific and technological activities.

This sector includes legal and accounting activities, tax consultancy, architectural activities, research and development, and advertising, for example. It has long ranked first in terms of the number of newly set up firms.

The second-highest number of new companies was established in the sector of accommodation and catering services.

In contrast, entrepreneurs established the lowest number of businesses in transport, a sector in which the ratio of new companies to dissolved ones was 2.8.

In terms of regions, Prague ranked first with almost seven new companies to one dissolved, followed by Liberecky region, north Bohemia, with the ratio at 5.3. The lowest ratio (1.7) was recorded in Jihocesky region, south Bohemia.

"Compared with 2013, the number of newly established companies per one dissolved company increased in all regions in the first half of 2014 compared with 2013, with the exception of Jihocesky region," Kamenickova said.

"The highest increase was recorded in the Moravskoslezsky, Jihomoravsky and Liberecky regions," she added.

A half of the companies, which were dissolved in the first half of this year, had operated on the market for more than 15 years, which is the same share as in 2013.

Almost one-fifth of the dissolved companies were in operation for 11 to 15 years. The share of this group of companies on the total number of dissolved companies slightly decreased.

The share of companies established 11 and fewer years ago on the total number of dissolved companies slightly increased.

But the share of the youngest companies, on the market for zero to five years, has decreased and was the lowest since 2011.

Bankruptcies accounted for 24 percent of company closures in the first half of this year.

The highest share of bankruptcies (45 percent) was recorded in Liberecky region, followed by Olomoucky region (34 percent).

The share of bankruptcies on company closures was higher than 30 percent also in regions Stredocesky, Plzensky and Moravskoslezsky.

The share was the lowest in regions Karlovarsky (10 percent) and Jihocesky (12 percent). It was below 20 percent also in the Ustecky and Pardubicky regions.