Ritual Services Market Expands with One-Third Increase in New Companies

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In early 2026, Russia saw a notable increase in new players entering the funeral services sector, according to Kommersant, citing data from Rusprofile. During the first quarter, the number of registered companies rose by a third compared to the same period last year. Analysts note that the industry is simultaneously emerging from the shadows and undergoing structural changes due to new tax regulations.

According to industry services, approximately 500-520 new organizations were established between January and March. While the number of closed companies also increased, it did so at a much slower rate—by about one-fifth. As a result, the total number of market participants exceeded 11,000, showing moderate annual growth. Most players—around 78%—operate as individual entrepreneurs (IP).

Experts attribute the surge in registrations to several factors. On one hand, increased state control is encouraging businesses to formalize: companies that previously operated informally are transitioning to the official sector. This allows them to benefit from tax breaks and reduces the risk of inspections.

On the other hand, changes in tax legislation have also influenced the trend. Starting in 2026, the revenue threshold for being exempt from VAT was lowered from 60 million rubles to 20 million rubles. As a result, entrepreneurs exceeding this limit began fragmenting their businesses—opening multiple legal entities or individual entrepreneurs (IP) to maintain a preferential tax regime.

Another driver of growth has been the expansion of independent participants: employees of funeral companies are increasingly leaving to start their own private practices. This increases competition but does not always lead to an increase in the actual volume of services provided.

However, the financial stability of the industry remains under pressure. In 2025, the cost of key materials—wood and metal—significantly increased, raising the cost of services. At the same time, consumer purchasing power declined. According to statistics, the price of coffins and burial services continues to rise at double-digit rates.

Despite these challenges, the market continues to show positive dynamics: in the first months of 2026, the volume of services provided increased by nearly 7% in real terms and by more than 15% in monetary terms.

Analysts expect that the growth in new companies will continue, although at a slower pace in the second half of the year. The main trend is further formalization of businesses and the gradual displacement of unscrupulous players from the market.