Corporate insolvencies worldwide - Statistics & Facts

Simply put, insolvency happens when a business is not able to pay its debts. When a company is not able to locate funds to pay debts that are due, for example through taking on additional debt, it can legally file for bankruptcy. The company is then dissolved, and its assets are sold, usually by a third party such as a law firm, with the money received being divided between the company’s creditors. This process often takes a year or more to be completed, although this varies significantly between countries. As a rule, creditors do not receive the full amount they are owed when a company files for bankruptcy. In most countries, a condition for filing for bankruptcy is that the company’s assets are not sufficient to cover the total amount of debt they owe. It is often the case that the outstanding debt is much higher than the value of the underlying assets.

Insolvencies across different countries

The differences in the level of insolvencies between countries result from various economic, institutional, and legal conditions. In 2022, France was the country expected to have the most business insolvencies worldwide, with more than 30,000 insolvencies that year. In China, the number of business insolvencies has grown dramatically in recent years, increasing almost fourfold since 2015 to reach 12,000 in 2020. While this increase is partially due to the growth of corporate debt in China over this period, it also reflects changes made to bankruptcy processes. In 2007, the Chinese bankruptcy code was overhauled, and specialized courts for bankruptcy proceedings were established between 2007 and 2017.

Effect of the coronavirus pandemic on the number of insolvencies

Several businesses were hit hard by means implemented due to the outbreak of coronavirus (COVID-19) pandemic. For instance, retail trade, construction, as well as travel, accommodation, and food businesses saw in increase in number of bankruptcies immediately after the outbreak. On the other hand, many governments implemented unprecedented levels of financial support to businesses, which helped to mitigate the worst effects of the crisis.
This text provides general information. Statista assumes no liability for the information given being complete or correct. Due to varying update cycles, statistics can display more up-to-date data than referenced in the text.
Published by Statista Research Department, Sep 29, 2022

Key insights

Annual growth rate of business insolvencies in North America
-33%
Country predicted to have the most business insolvencies
France
Average number of years to resolve business insolvencies
2.47
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Editor’s Picks Current statistics on this topic

Forecasted number of business insolvencies worldwide in 2022, by country

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Forecasted number of business insolvencies 2022, by country

Average time to resolve business insolvencies worldwide from 2003 to 2019 (in years)

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Average time to resolve business insolvencies worldwide 2003-2019

Average time to resolve business insolvencies in the countries with the most insolvencies in 2019, by country (in years)

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Average time to resolve business insolvencies by country 2019

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Overview

North America

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Europe

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Asia-Pacific

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Asia-Pacific

Developing economies

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Public debt in Latin America
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