"The Domino Effect": A Wave Of Bankruptcies Sweeps Across Russia
- 16.07.2026, 15:03
There has also been a sharp increase in the number of announcements of intentions to file for bankruptcy.
The economic downturn, tax hikes, and a record-high Central Bank key rate have triggered a sharp rise in the number of bankruptcies among Russian companies.
In January–June 2026, Russian courts declared 3,550 legal entities bankrupt—a 10.8% increase compared to the same period in 2025, reports “Kommersant,” citing data from Fedresurs. Supervision proceedings (the first stage of bankruptcy cases) were initiated against 2,970 companies in the first half of the year, a 20.9% increase year-over-year. Moreover, as the statistics show, the number of both bankruptcies and companies placed under external supervision accelerated significantly in the second quarter. The highest number of bankruptcies was recorded in Moscow (859 cases), the Moscow Region (260), and St. Petersburg (232). Next were the Kuban region and the Sverdlovsk region—about 120 legal entities in each.
In addition, the data shows that the number of notices of intent to officially declare insolvency also rose sharply. In the first half of the year, the number of such filings from creditors rose 18.5% year-over-year, while those from the debtor companies themselves increased by 43% compared to 2025 and by 83% compared to 2024. Bankruptcies and complaints of pre-bankruptcy conditions have affected IT companies, retailers, infrastructure firms, and even enterprises producing goods for the defense-industrial complex. “Inflation, volatility in the key interest rate, and rising borrowing costs have slowly but surely set off a domino effect,” notes Anastasia Shamshina, attorney and founder of K’AMELAWT .
According to Rosstat, as of the end of April, Russian businesses’ overdue debts to counterparties, banks, and the government budget reached 7 trillion rubles. Over the past year, this amount has grown by 20% and is now 1.5 times greater than federal budget spending on economic support.
Businesses have found themselves caught between falling consumer demand and a rising tax burden. Last year, the government increased the corporate income tax rate, and this year it raised the VAT rate to 22% and launched a tax reform for small businesses, depriving hundreds of thousands of entrepreneurs of the simplified tax system and low tax rates.
Entrepreneurs are being pushed toward closing their businesses—including through bankruptcy—by “the persistence of a high key interest rate coupled with rising wages and expenses,” notes Anton Krasnikov, a partner at the law firm “Sotbi” Anton Krasnikov. Expensive loans are depriving businesses of the ability to bridge cash flow gaps and weather the “storm,” while more and more companies are forced to take out new loans just to pay off old ones.
According to estimates by TsMAKP, an analytical center close to the government, on average, companies are forced to spend 37% of their pre-tax profits on interest payments for bank loans. And in major industrial sectors, businesses cannot even cover these costs: interest payments exceed profits by a factor of 8 in the railroad, shipbuilding, and aircraft manufacturing sectors; by a factor of 4–6 in wood processing, construction, and commercial services; more than three times in the chemical and automotive industries; and 2.3 times in retail.
According to the Central Bank, the volume of non-performing loans on bank balance sheets has exceeded 11 trillion rubles, while potentially non-performing loans of the largest companies are estimated at 36 trillion rubles. This situation threatens to trigger an “explosive” banking crisis in Russia, as intelligence from one European country warned in July.