Growth on paper: Almost a thousand new funeral companies have been registered in Russia in six months.

In the first six months of 2026, 995 new funeral companies were registered in Russia. This brings the total number of market participants to 11,5 organizations, the vast majority of which are individual entrepreneurs.

Forced withdrawal from the shadows and whitewashing of the funeral business

By the end of June, there were already 11,5 market participants in the country, with the vast majority—81%—being sole proprietors, according to analysts at the Rusprofile service. In particular, Rosstat no longer discloses official mortality data in the country, making it difficult to estimate the true scale of demand.

However, experts in the funeral industry believe the increase in the number of companies is not solely due to a possible surge in mortality or increased demand. They also believe it was driven by changes in government regulations and tax legislation.

Moreover, Anton Orlov, Director of the Institute for Social Policy Research, directly links the current growth to the forced expulsion of businesses from the gray zone. Hundreds of funeral directors, who had operated for years without official registration, were forced to formalize their activities in order to accept payments through bank terminals and legally receive compensation from the budget.

Business fragmentation due to VAT and a decline in agency income

Another key factor driving the mass registration of new individual entrepreneurs was the need to fragment businesses. With the VAT threshold lowered from 60 million to 20 million rubles, large market players were forced to split their businesses into several smaller entities. As a result, former morgue agents and employees began actively opening their own local services.

Nevertheless, funeral home profitability remains extremely low, according to industry experts. This situation is directly affected by the decline in clients' solvency: people are increasingly forgoing lavish ceremonies and opting for simple caskets and budget-friendly concrete monuments instead of granite ones.