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Record number of company closings in 2020 in the Czech Republic

In 2020, a record number of company closings in the Czech Republic are expected since 1993. More than 16,000 firms and enterprises are expected to close by the end of the year. The coronavirus pandemic has also affected the number of startups, which will be only about 27,000, which is the worst result in five to six years in the country.

Data for November 2020 shows that 2,261 firms were created in the Czech Republic and 1,334 firms closed. In 11 months of this year, 24,500 companies were created in the Czech Republic, and 14,500 of them disappeared.

According to analyst Vera Kamenichkova, the number of disappeared companies has been growing for a long time. Until 2016, the bar for the number of closed firms was kept below 10,000, and last year it exceeded 15,000.

Record number of company closings

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The number of new firms has been declining for some time

The number of new firms has been declining for some time. It reached its peak already in 2017, and has been gradually decreasing since then.

“The trend in start-ups will not change this year, but the decline will be faster than in previous years. Compared to 2019, one tenth fewer companies will be created, and compared to 2017, even 17% fewer,” Kamenichkova said.

Overall, according to CRIF, this year the Czech Republic will have the smallest number of companies since 2003. This is due, on the one hand, to the continuing decline in the number of new companies, on the other, to the growth in the number of closed firms.

The number of personal bankruptcies is also growing

The same trend can be seen in the case of personal bankruptcies. In the Czech Republic, 2102 bankruptcies were declared in July this year, which is 1176 more than in June. At the same time, this is the highest figure since 2008. Personal bankruptcy filings increased from 441 to 2653, also a record number.

Firms in numbers

In November, the largest number of commercial enterprises was established in Prague (1087), in the South Moravian Region (266), in the Moravian-Slez Region and in the Central Bohemian Region (175). In contrast, the smallest number of companies was established in Karlovy Vary (29), Vysočina and Pardubice (50 each).

Most of them also disappeared in Prague (653), in the South Moravian region (120) and in the Central Bohemian region (106).