Acceleration to 300: Russia wants to speed up the bankruptcy process of companies
In Russia, they plan to speed up the bankruptcy process of companies. Now this procedure in our country takes more than four years, but in world practice it is carried out in a year and a half. It is planned to simplify it by 2030: the time for the sale of assets from auctions will be reduced by almost half to 300 days, and for bankruptcy proceedings (which, in addition to the sale, includes inventory and property valuation) from 47 to 40 months. The initiative to speed up the process has been discussed since 2020, but the bill has not passed a single reading in the State Duma. Now the changes will be included in the new national model. It is important to reduce the terms of bankruptcy in order to boost capital turnover, experts say. Why the proposed reduction is not enough and what might be the optimal time — in the material of Izvestia.
How does the bankruptcy of legal entities occur
In Russia, they want to speed up the bankruptcy of legal entities. Thus, the term of bankruptcy proceedings is planned to be reduced by seven months to 40, and the sale of assets from 520 to 300 days. This was reported to Izvestia by the press service of the Agency for Strategic Initiatives (ASI).
They added that the process is planned to be changed by 2030, which is embedded in the National Model of Targeted Business Conditions. Vladimir Putin announced work on it back in June at SPIEF 2025. He noted that the government, together with entrepreneurs, industry experts, and ASI specialists, is creating such a mechanism. The model should be ready in September of this year, the president specified.
It is important to return the business from bankruptcy to the economy as soon as possible, therefore, a balance of interests is being sought between debtors, creditors and shareholders, the ASI noted.
The bankruptcy procedure itself consists of several stages:
monitoring (up to seven months) is a mandatory stage in which the financial condition of the company is analyzed and creditors are identified;
financial recovery (up to two years) is an optional stage, but it is used if there is a chance to save the business — then a debt repayment plan is approved under the supervision of the administrative manager.;
External management (up to two years) is also an optional stage, in which the current management is removed and management is transferred to an external manager.;
Bankruptcy proceedings (from six months) are a mandatory step that includes inventory, property valuation, and asset sale at auction.
The bankruptcy mechanism primarily protects creditors, as well as the legitimate interests and rights of debtors, recalled Vladimir Chernov, analyst at Freedom Finance Global. Thus, bankruptcy of a legal entity is necessary when a company cannot fulfill its financial obligations — to pay salaries to employees, severance payments, settle accounts with counterparties, and pay loans.
After declaring bankruptcy, the court liquidates the company, and writes off the outstanding debts. A legal entity can receive this status if the company has not paid its obligations for more than three months or the amount of debt exceeds 2 million rubles (for sole proprietors — 0.5 million). The institution of bankruptcy contributes to the recovery of the economy by removing inefficient enterprises from the market.
In Russia, the number of new company bankruptcies decreased in 2025. In the first half of the year, the number of open bankruptcy proceedings decreased by 27% compared to the same period of the previous year, to 3,208, according to the Federal Resource data. Also, the number of observations in the second quarter of 2025 fell by 27% to 1,271, with a total decrease of 29% in the first half of the year.
What changes in the process of bankruptcy of companies
Back in 2020, a bill was submitted to the State Duma aimed at changing the terms of company bankruptcies, Anastasia Kaverzina, Deputy chairman of the Opora Russia Committee on Financial Rehabilitation and bankruptcy, recalled. However, by now it has not passed any reading yet and has raised many questions. At that time, the business did not like the creditor's deprivation of the right to choose an arbitration court to conduct bankruptcy proceedings.
Concerns were also raised about the cancellation of existing rehabilitation procedures — external management and financial rehabilitation and their replacement with a new debt restructuring procedure, Anastasia Kaverzina explained.
The working group is currently finalizing the provisions of the national model, in particular on bankruptcy, and is looking for a balance of interests between debtors, creditors, and shareholders. To achieve these objectives, a new restructuring procedure is proposed, as well as a change in the bidding mechanism, which allows for the sale of the debtor's property under one trading procedure, the ASI added.
The press service of the Ministry of Energy told Izvestia that they support such an initiative. They added: the institution of bankruptcy requires transformation — changes are needed that will increase the number of cases of rehabilitation procedures and will contribute to the fastest possible return of assets to economic circulation.
One of the main tasks of the bankruptcy institute is to ensure that the assets of persons in default are returned to full—fledged economic circulation as soon as possible, Anastasia Kaverzina from Opora Russia drew attention. The proposed reduction of the period by seven months relates to the liquidation part and will generally help to solve the tasks set. However, the expert continued, other changes in the law will be required in the future, aimed at further reducing the time limit.
What other measures are needed
Currently, the bankruptcy procedure takes almost four years, and this is really excessive, said Sergey Katyrin, President of the Russian Chamber of Commerce and Industry. He explained: This not only reduces the chances of asset recovery and settlement with creditors, but also slows down further economic use of the property.
That is, such a long period reduces the efficiency of assets — they lose value, property deteriorates, creditors do not receive funds for years, and business initiatives freeze, Vladimir Chernov of Freedom Finance Global believes.
In his opinion, shortening the deadline by at least a few months will help boost capital turnover, speed up settlements with creditors, and reduce the burden on the judicial and supervisory systems. This is a step towards "unfreezing" the dead capital, which has been idle for years on the balance sheet of bankrupt enterprises, the specialist added. For comparison, in world practice, for example in Germany or the USA, bankruptcy procedures often take 12-18 months.
At the same time, reducing deadlines by itself does not guarantee fairness or efficiency, says Alexandra Begaeva, managing partner of the Begaeva and Partners Law Office. The key problems of the Russian bankruptcy system are considered to be the lack of transparency in the valuation and sale of assets, conflicts of interest, and the weakness of the institution of financial recovery — all of which require special attention.
In addition, even after accelerating to 40 months of bankruptcy proceedings and approximately 10 months of asset sales, the procedure in Russia will remain one of the longest in the world. In general, this solves little, except for reducing the costs associated with the debtor's bankruptcy, said Evgeny Pantaziy, a member of the Russian Bar Association.
Nevertheless, such actions by the authorities are an important step in the right direction. However, in order to maximize the effect, parallel measures are needed: increasing the transparency of trading, strengthening control over the actions of managers, developing the institute of pre-trial rehabilitation and bankruptcy prevention, simplifying procedures for small businesses, Alexandra Begayeva said.
The Ministry of Energy expects that the terms of bankruptcy procedures will continue to be shortened.
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