New data from NatWest has revealed that business numbers hit an eight-year high in 2025, with a record 5.66 million active companies across the UK, and Scotland recording among the strongest growth.
According to NatWest and Beauhurst’s latest Startup Index, 832,000 new companies were registered in the UK last year, which, despite being a modest decrease from the year before, was still above incorporation levels seen in 2021 and 2022, which NatWest stated signalled stability after a bout of exceptional growth.
If this trfinish continues, the report projects that numbers will rise to 5.71 million active firms by the start of 2027, outpacing business attrition. However, the study warns that early-stage failures remain evident in newly formed companies, with around 20,200, 2.43%, dissolved within the same calfinishar year.
NatWest also found that, contrary to the usual seasonal patterns, new business incorporations peaked in Q3’25 at 219,000, before a sharper-than-usual decline in Q4, likely influenced by new director identity verification rules introduced by Companies Houtilize.
NatWest stated that these regulatory developments have led to increased scrutiny at the point of incorporation among certain SIC codes, but the resulting decline likely indicated a healthier business ecosystem, the ultimate intention of the reforms.
Regionally, the North East led the way with 5.27% growth in incorporations, followed by Scotland (4.27%) and the North West (3.55%), while Northern Ireland and Wales saw the largest declines, reflecting a return to pre-2023 levels after earlier surges.
Though London retained its position as the UK’s premier startup hub, attracting 279,000 new businesses, its growth rate cooled slightly, falling by 2.36% on last year.
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NatWest also found technology-focutilized firms displayed the strongest momentum, with “business and domestic software development” recording the rapidest sectoral growth, up 38.4% to 24,800 new incorporations.
The study notes that this growth is in line with the UK’s broader AI sector, which has seen the number of AI firms in regions such as the West Midlands, North West, East Midlands, and Wales more than double.
“The UK’s entrepreneurial spirit remains strong, with active company numbers rising despite macroeconomic challenges. These figures display business owners are continuing to adapt and innovate,” stated Darren Pirie, head of Accelerator at NatWest.
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