Highlights from the report show:

• 5.66m active companies by the end of 2025, up by 0.82% on 2024
• 832k companies incorporated in 2025, down by 1.65% on 2024
• Rather than peaking in Q1, incorporations rose through the year to a high of 219k in Q3

In 2025, the UK saw a slight easing in new company registrations, with 832,000 incorporations  - a modest 1.65% decrease compared with 2024. While this marks a cooling from the exceptional highs of recent years, incorporation levels still remained well above those of 2021 and 2022.

This suggests the UK is entering a period of stabilisation, where demand for new ventures remains resilient even as the business environment normalises post‑pandemic and amid regulatory change.

Despite softer incorporation volumes, the total number of active companies reached 5.66 million by year-end, the highest level in eight years. This represents 0.82% annual growth, underscoring a key structural trend: business creation continues to exceed business attrition.

This dynamic points to a still‑expanding entrepreneurial base, reinforcing the UK’s long-term trajectory as a strong environment for starting and sustaining new ventures.

In contrast with historic patterns - where incorporations typically peak in Q1 - 2025 saw momentum build through the year, reaching 219,000 in Q3, the annual high.

However, Q4 brought a sharper-than-usual fall. The likely explanation: businesses bringing forward plans to incorporate ahead of mandatory director identity verification requirements. This regulatory shift influenced the timing of new formations, rather than underlying business sentiment.

Regional incorporation trends varied across the UK:

• North East, Scotland, and North West led growth, each recording year‑on‑year increases.
• Northern Ireland (-35.6%) and Wales (-18.9%) experienced the steepest declines following unusually strong activity in previous years.
• London remained the country’s dominant hub, contributing 279,000 incorporations - a testament to its enduring role as a magnet for entrepreneurial activity.

The mixed landscape highlights the differing pace of recovery and business formation across the UK’s nations and regions.

Two major themes defined the sectoral picture in 2025:

1. Real estate continues its prominence

Activities related to property remained robust. Incorporations grew in both:

• “Other letting and operating of own or leased real estate”
• “Buying and selling of own real estate”

This suggests sustained investor activity and structural demand for property-related vehicles.

2. Technology-led incorporation accelerates

Digital sectors saw some of the fastest growth, with:

• “Business and domestic software development” expanding 38.4%, reaching 24,800 incorporations

This reflects the continued momentum of the UK’s tech ecosystem, fuelled by digital transformation, remote‑first business models, and an increasing shift toward software-led solutions.

More stringent compliance and scrutiny at Companies House — part of broader corporate transparency reforms — likely shaped incorporation volumes across both regions and sectors.

While these checks may slow or reduce the number of approved registrations, they also indicate healthier quality control and enhanced trust in the UK’s business register, filtering out questionable or non‑substantive registrations.

Overall, 2025 was a year of recalibration for UK business formation. Incorporations dipped slightly, but the total active company population reached historic highs, regional performance showed clear pockets of growth, and technology-led activity remained a standout bright spot.

Combined with impending regulatory changes, these trends suggest the UK is moving toward a more stable, transparent, and innovation-driven entrepreneurial environment in 2026 and beyond.

NatWest’s Accelerator helps early stage and high‑ growth businesses launch, scale and thrive, delivering standout results across the UK.

Darren Pirie, Head of Accelerator at NatWest, said: “The UK’s entrepreneurial spirit remains strong, with active company numbers rising despite macroeconomic challenges. These figures show business owners are continuing to adapt and innovate.

“Small businesses drive growth across the UK, and NatWest is proud to support them to start and scale, which is why this year we’re expanding our free Accelerator five‑fold to support 50,000 members.”

Emma Jones CBE, Small Business Commissioner, said: “It is good to see from this research that the number of overall active businesses is up, we are playing our part to ensure continued growth by getting money moving faster through the economy and into the hands of small firms.

“I have witnessed and experienced the challenges that businesses have faced in the past few years and have deep respect for founders who show resilience and continue to hire, export, and innovate. Long may they survive and thrive.”

The NatWest Growing Together plan aims to boost UK wide growth by backing regional economies, supporting midmarket firms, strengthening infrastructure and housing foundations, improving financial confidence, and championing the innovators shaping the future economy.

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