SEOUL: The number of newly established companies in South Korea has dropped for the third successive year in 2023, highlighting the ongoing challenges posed by a sluggish economic recovery. Data indicated that approximately 956,000 businesses were launched last year, marking a 4.2 percent decrease from the previous year.
According to Lao News Agency, Statistics Korea compiled the data, attributing the continued downward trend to a slower-than-expected economic recovery following the COVID-19 pandemic. The real estate sector saw the most significant decline, with the number of new entrants falling by 17.1 percent year-on-year. The transportation and warehouse sectors followed, experiencing a 9.9 percent drop.
The proportion of newly established companies out of all business entities reached 12.7 percent in 2023, the lowest level since relevant data collection began in 2011. The survival rate of companies also showed concern; only 64.9 percent of businesses created in 2021 survived through 2022.
Additionally, approximately 751,000 firms closed permanently in 2022, a 2.1 percent rise from the previous year. The real estate sector recorded the most significant number of closures, with 25,000 firms shutting down, reflecting a 14 percent decrease compared to the previous year.