The number of companies that canceled their business operation registrations last year reached the highest level since 1992, Ministry of Economic Affairs figures showed, while the number of factories closing shop dropped significantly.
A total of 48,617 companies withdrew their registrations last year, up 32.77 percent year-on-year.
Firms must cancel their registrations to end taxation after a business failure or disbandment.
The ministry said mergers and acquisitions among retailers seeking to increase their scale of production to cut costs may have led to the jump in canceled registrations.
Human resource specialists, however, said sluggish economic growth and weak consumer confidence were to blame.
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"Fifteen percent of the companies surveyed were not giving Lunar New Year bonuses to their employees. Among these, more than 40 percent failed to turn a profit last year," Wu said, adding that small and medium-sized enterprises had taken the worst hit last year as a result of a lackluster economy.
The survey, which also polled workers, found that one-third of employees were not receiving bonuses this Lunar New Year, representing a 153 percent year-on-year increase.
A report released last week by the Directorate-General of Budget, Accounting and Statistics showed that the unemployment rate among people between the ages of 15 and 24 hit 10.65 percent last year, compared with 3.91 percent unemployment for the overall population last year.
Meanwhile, the number of factories closing their doors last year decreased by 57.7 percent to 2,905 facilities, the lowest drop in the past decade, statistics showed.
The ministry said the manufacturing sector had seen a significant improvement in competitiveness as a result of technology upgrades and innovation.