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Company closures in Germany reach a 20-year high
Around 188,000 companies in Germany ceased operations in 2025, a 10% increase from the previous year and the highest level in nearly 20 years. Local courts received 2,276 corporate insolvency filings in April 2026, showing that pressure on the European economy continues.
Companies in Germany accelerated their exit from the market in 2025. Around 188,000 companies ceased operations, driving the number of closures up 10% from the previous year to its highest level in nearly 20 years.
The rise in insolvency filings continued in 2026. Local courts recorded 2,276 corporate insolvency filings in April 2026. The filings increased 7.1% year on year and were also up 6.5% in the first quarter compared with the same period last year.
Most closures were voluntary
Only 13% of the companies that ceased operations in 2025 filed for insolvency. Most closures were voluntary.
Rising costs, competitive pressure and a shortage of skilled labor contributed to companies’ exit from the market. Some companies with good or moderate credit ratings also struggled to continue operating.
Patrick-Ludwig Hantzsch, a spokesperson for Creditreform, said the crisis had spread across the entire economy. While the insolvencies of large companies attracted public attention, many small and medium-sized businesses quietly left the market.
Manufacturing, construction and hospitality hit hard
Closures in traditional sectors rose significantly. Some 11,000 companies in manufacturing, 24,000 in construction and 15,000 in hospitality ceased operations.
These figures represented increases of 10% in manufacturing, 12% in construction and 15% in hospitality compared with the previous year.
Companies face multiple pressures
Insolvency expert Hans Joachim-Berner said economic conditions had developed into a broad-based crisis. According to Berner, high energy prices, inflation limiting consumer spending and changes in interest rates increased pressure on companies.
Berner said the situation was not attributable to a single cause. He said the COVID-19 pandemic, supply chain problems, the post-pandemic recovery, the war in Ukraine, the energy crisis, Iran and customs problems had accumulated pressure on companies’ financial resources.
Berner also said artificial intelligence was driving rapid and fundamental changes in business models, adding that companies were facing significant pressure to transform.
High taxes and costs draw criticism
Business circles in Germany identified high taxes, labor costs and the burden of bureaucracy among the main causes of the wave of closures.
Karsten Schmidt, a concert organizer in Berlin, said high taxes were putting pressure on his small business. Schmidt said he was considering moving to another European country where taxes and labor costs were lower, and called for a more favorable environment for businesses in Germany.
Insolvency wave makes access to credit harder
The increase in corporate insolvencies also affected banks’ lending policies. In response to rising risks, banks began demanding more collateral, tightening lending conditions and examining applications more thoroughly.
Companies facing a lack of orders and structural transformation consequently found it more difficult to access the investments they needed to renew their business models. Automotive suppliers and energy companies were among the sectors particularly affected by the changes in lending conditions.
Although banking circles did not explicitly describe the situation as a crisis for the system, the rising risk was reflected in credit conditions. The room for maneuver of small and medium-sized businesses, which rely more heavily on bank loans, narrowed.
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