Russian funeral market expands amid tax shifts, austerity
Russia registered a record number of new funeral service providers in the first half of 2026. Between January and June, 995 new companies and sole proprietorships entered the market, marking a 22.5% increase compared to the same period last year, according to The Moscow Times.
This represents the highest growth rate in five years, based on Rusprofile registry data cited by Kommersant. By late June, approximately 11,500 funeral service entities operated nationwide, a 7.6% rise year-on-year.
Regulatory crackdown drives market formalization
Anton Orlov, director of the Institute for Research on Social Policy Problems, attributes the surge largely to the formalization of the shadow economy. Unregistered funeral agencies that operated informally for years are now compelled to legalise their operations under official oversight.
Elena Andreeva, executive director of the Union of Funeral Organizations and Crematoriums, noted that intensified government inspections are accelerating this trend. Additionally, market fragmentation plays a role as former employees of mortuaries and established agencies launch independent ventures, according to Vladimir Voroshukha, director of the Nizhny Novgorod Crematorium.
Tax policy changes force corporate restructuring
Tax shifts have also reshaped the commercial landscape. Denis Tverskoy, a partner at Strategy Partners, highlighted that the Russian government lowered the VAT exemption turnover threshold from 60 million to 20 million rubles starting in 2026. Consequently, many business owners split existing entities into smaller units to maintain tax-exempt status.
Rising costs push families toward austerity
Meanwhile, increased competition and declining household purchasing power have squeezed average order values. Voroshukha observed that clients increasingly choose minimal arrangements, opting for plain caskets and concrete headstones instead of traditional granite to cut costs.
In major Russian cities, the average cost of a funeral ranges between 90,000 and 110,000 rubles—roughly €900 to €1,100—up 12% to 15% from last year. Official Rosstat figures show that total expenditure on funeral services reached 57.8 billion rubles (approx. €580 million) between January and May 2026, a 9.6% increase compared to the same period in 2025.
By June 2026, the average price of a casket rose 11% year-on-year to 9,200 rubles (€92). However, Andreeva emphasized that profit margins for funeral businesses remain slim despite overall spending increases.
Translation by Iurie Tataru
