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Record number of new companies indicates instability
A record number of new companies were established last year, but a representative of the Development Fund said this trend hints at instability in the business environment.
"It shows that new companies must constantly be launched to make an effort in another field,” Heido Vitsur, an economics expert for the institution, told ERR radio. “There would be no need to found so many companies if they could gain stability and began growing."
"Furthermore, the bulk of new companies are leaning toward trade and that indicates that they are largely single-transaction businesses because the number of retail stores isn't growing much," he said.
Last year, 15,259 companies were established. The previous record dated from 2006, when 12,157 new companies were registered, write ERR News.
Enterprise Estonia start-ups director, Dmitri Burnashev, said the increase was largely due to a commercial law change last year, by which founders of limited companies no longer have to contribute 2,500 euros in share capital if the business sector does not require capital investments.
"We have seen that people are more often discovering entrepreneurship as one way of self-realization," he said.
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