Number of companies shutting down in 1H drops from the highest in 25 years

The number of companies closing doors in Macau in the first half of this year (1H) has dropped significantly year-on-year compared to 2024, the Statistics and Census Service (DSEC) noted in a recent statistics release.

Still, the figure reached in the first half of 2025 (469) is the second-highest in a decade after last year’s record of 593 companies ending their business in the first six months of the year.

It is also worth noting that, contrary to pre-pandemic times, the number of company dissolutions has significantly fluctuated since the COVID-19 pandemic started, a trend that continued after it ended.

Looking at the trend, in the four years before the pandemic (2016 to 2019), the number of companies closing in the 1H was stable between 418 and 433, with y-o-y variations of less than 5%.

In 2020, the number of companies closing in the first half of the year sharply decreased to just 338, a reduction of 19.7% year over year.

It is necessary to note that these figures follow the procedure of the companies officially submitting documentation to the company registry, noting the cessation of business.

In the following year, the number of dissolutions had a variation that was precisely the opposite, bouncing back to grow to 454 (+34.3%) at the end of June 2021.

After a new decrease in 2022 (to 379), this figure skyrocketed in the following two years, increasing by 56.5% to 593 at the end of June 2024, reaching the highest level ever recorded by the DSEC (since 2001).

Wholesale and Retail leading the numbers

Data analysis by the Times of DSEC’s detailed statistics has found that the “Wholesale and Retail Trade” sector recorded the highest number of dissolutions in the 1H, with 169, or 36% of the total.

This is the only sector with consecutive higher figures in the past three years, from 147 in 2023 and 155 in 2024.

The sector of Business Services (132), or 28.1%, is also highly accountable for the number of dissolutions. However, contrary to the Wholesale and Retail Trade, this sector had fewer companies closing in the 1H than in 2024, when the number reached 140.

Besides the Wholesale and Retail Trade, the only other sectors that showed an increase year over year from the same period last year were Transport, Storage, and Communications. In the first half of this year, 19 companies shut down, compared to 12 last year and seven two years ago.

In the opposite direction, presenting a consecutive decrease, was the construction sector, which saw the number of companies closing in 2025 (51) reduce from 63 in 2024 to 67 in 2023.

According to DSEC, in the first half of 2025, there were also 2,020 newly incorporated companies, which, given the number of dissolutions, resulted in a net increase of 1,551. The total registered capital of these more than 2,000 new companies reached MOP303 million, DSEC remarked.

Statistics from the second quarter (Q2) of this year also show that many of the companies newly incorporated in this period were in the sectors of Wholesale and Retail Trade (380) and Business Services (326).

While the new companies in the Wholesale and Retail Trade sector accounted for 34.3% of the total, those operating in the Business Services sector represented 29.5%.

This fact prompted the Times to inquire how long the dissolved companies in these sectors have been operating, but DSEC responded that such data is unavailable.

“The above-mentioned company statistics are derived from the administrative information of the Commerce and Movable Property Registry. As the data source does not provide information on the operation period before closing and the size of dissolved companies, such data is unavailable,” the DSEC said in a written response.

10-year trend shows decline in incorporations

Analysis made by the Times for the last 10 years (2016 to 2025) regarding incorporations in the first half of the year reveals a downtrend.

The turning point coincided precisely with the COVID-19 pandemic, when new incorporations dropped from almost 3,300 to just over 2,400.

After this, and similarly to what happened with the dissolutions, the pandemic year brought a fluctuation, with significant highs followed by substantial lows.

Since 2023, when the number of new incorporations was around 2,500, we have been observing a constant drop that culminated in this year’s around 2,000.

Still, this is not the lowest point of the last decade, by very little, as in the same period back in 2022, there were only 2,019 new incorporations in the 1H, one less than this year.

Concurrently, according to the data provided by the Statistics and Census Service (DSEC), Macau has been witnessing a change in the trend of incorporating new companies. There are more companies with capital originating from the mainland (over one-third), especially the influx of larger enterprises. This opposes the trend that almost all enterprises created years ago were of a micro or small scale.

According to DSEC’s Q2 data release, 12 new companies were registered with a capital value of MOP1 million or more. Together, these 12 companies had a capital value of MOP39 million, which accounted for 39.4% of the total capital registered by over 1,000 companies in the same period.

Uncertain environment, weakened consumption confidence driving dissolutions

Henry Lei, Economist, Economics Professor, and associate head of the Department of Finance and Business Economics at the University of Macau, told the Times that the high number of company dissolutions is caused by uncertainties in the business environment and weakened consumption confidence.

In an interview with the Times, Lei noted that while Macau’s overall economic performance showed clear signs of recovery in the Q2 and the 1H of 2025, the non-tourism sectors, especially the retail one, are still facing a critical situation in their operations as consumption confidence is still weak.

Lei noted that the Gross Gaming Revenue achieved higher-than-expected results, backed by the increased number of incoming visitors; however, this fact is not enough to keep all economic sectors running.

“As a result, some [business owners] may leave the market and cancel their registration. Overall, the increase in dissolved firms is attributed to the uncertainties in the business environment and weakened consumption confidence,” the Economist mentioned, adding, “In fact, the economic fundamentals has undergone structural changes in recent years, with weakened domestic and even foreign consumption confidence (with lower per capita tourism expenditure), stronger incentive in making online and foreign consumption, with stronger price sensitivity.”

He explained that such factors have made the current business environment highly challenging, leading to the high level of bankruptcies recorded.