Russia registered 995 new funeral service organizations and individual entrepreneurs in the first half of 2026, a 22.5% increase compared to the same period last year and the highest figure in five years, business daily Kommersant reported, citing data from the Rusprofile database.
The total number of funeral companies in the country reached 11,500 by the end of June, up 7.6% year-on-year. Individual entrepreneurs account for 81% of market participants.
Experts interviewed by Kommersant said the growth is not linked to the war Russia is waging in Ukraine. Instead, they attributed it to a "forced withdrawal of business from the gray zone" and the fragmentation of existing businesses, rather than increased demand for services.
Funeral agents who worked for years without registration are now compelled to formalize their activities in order to accept payments through terminals and legally receive budget compensations, one of the publication's interlocutors explained. The process is driven by the policy of supervisory agencies, which regularly conduct inspections, added Elena Andreeva, executive director of the Union of Funeral Organizations and Crematoriums.
Businesses are also adapting to changes in tax legislation. Starting in 2026, the government lowered the revenue threshold for exemption from value-added tax (VAT) from 60 million rubles to 20 million rubles. As a result, entrepreneurs have begun splitting their businesses into multiple individual entrepreneurships to avoid paying the tax, noted Denis Tverskoy, a partner at Strategy Partners.
New companies are also being opened by former employees of funeral services and morgues as the share of large players in the market declines, said Vladimir Voroshukha, director of the Nizhny Novgorod Crematorium.
According to Rosstat, Russia's state statistics service, residents spent 57.8 billion rubles on funeral services in January–May 2026, 9.6% more than a year earlier. In large cities, funeral costs now range from 90,000 to 110,000 rubles, 12–15% higher than a year ago, estimated Anton Orlov, director of the Institute for Social Policy Research. The average cost of a coffin in June 2026 reached 9,200 rubles, an 11% increase year-on-year.
Due to the increase in the number of small players and a decline in the population's purchasing power, the average check for funeral services is shrinking, Voroshukha noted. Clients are increasingly choosing the cheapest options: they forgo additional ceremony elements, buy simple coffins, and choose concrete monuments instead of granite ones, Tverskoy said. Overall, the profitability of the funeral business has not grown significantly and remains low, concluded Andreeva of the Union of Funeral Organizations and Crematoriums.