According to the Federal Tax Service of Russia, a registration body which maintains the Russian Register, as of July 1, 2020 the number of legal entities with current active status in Russia is 3,6 million, that is over 200 thousand less than a year ago.
Currently company liquidations exceed new registrations by 2 times: from July 1, 2019 to July 1, 2020, about 250 thousand new companies were registered, while more than 500 thousand companies were liquidated. This downward trend has been observed for several years.
Reasons for liquidations:
There is an ongoing process by the Russian Registrar to clean the register of unreliable companies. As a result of this process over 500 thousand companies have ceased activities. 422 thousand of them (83%) were removed from the EGRUL-Register by the decision of the registrar as required by law. The decision was based on their attributes for being unreliable or were identified as shell companies.
Economic reasons for liquidations are less prevalent: 64 thousand companies have ceased operations due to voluntary liquidation; 7,6 thousand – after bankruptcy; 10 thousand – after reorganization; 4,5 thousand companies had other reasons to be liquidated.
The largest number of bankruptcies occurred in 2015: 11,2 thousand companies. On average, about 10 thousand companies cease their activities annually, having been declared bankrupt.
Editorial note: In 2020 a moratorium on bankruptcy was imposed by the Russian government on companies from industries heavily affected by the pandemic and systemically important strategic companies. This moratorium is expected to last until early October 2020.
Dynamics of new company registrations:
From July 1, 2019 to July 1, 2020, over 250 thousand companies were registered in Russia. In April 2020, an absolute historical minimum was recorded – 10,3 thousand, in May 2020 the indicator increased to 11,4 thousand, in June 2020 to 17,4 thousand newly registered companies.
Before the COVID-19 pandemic, on average, 23 thousand companies were established monthly.
LLC is the most frequently used legal form in Russia:
Of the total number of 3,6 million active legal entities, 3 million are business entities, including limited liability companies (LLC) – 2,9 million, joint stock companies (JSC) – 63 thousand. 618 thousand are non-profit entities.
Popular regions for company registration:
31,5% of all companies in Russia are concentrated in three regions: Moscow, the Moscow region, St. Petersburg
Source: Credinform Rus
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