New company boom boost for Scotland

New report also reveals that a record 900,000 new companies were incorporated across the UK in 2023.

Scotland is experiencing a “start-up boom”, after a double-digit surge in the number of new companies incorporated, a report today suggests.

Some 40,000 businesses set up shop last year – an increase of 12 per cent on the number of new companies incorporated in 2022 – according to Royal Bank of Scotland and Beauhurst’s New Start-up Index. This makes Scotland the third fastest growing part of the UK for newly registered businesses in 2023, after Northern Ireland (+59 per cent) and London (+20 per cent).

There were around 900,000 new companies incorporated across the UK in 2023, making it a record year. The growth in female founded businesses also continues to increase year on year, with a record 164,000 companies incorporated by women in the UK in 2023, up 4 per cent on 2022 and taking growth in the five years between 2019 and 2023 inclusive to 26 per cent.

Last year, the uplift in growth in Scotland was driven in the property letting space, with 2,440 new businesses starting in the sector. Meanwhile, 2,148 new online retail businesses also began operating and in third place 1,839 new takeaway shops and street food stands set up shop in 2023.

Data on new company incorporations and the directors at these companies is derived from the official public records from Companies House.

James Holian, head of business banking at Royal Bank of Scotland, said: “It’s absolutely brilliant news that some 40,000 new businesses have decided to make Scotland their home in 2023. These new ventures are predominantly small businesses, owned and run by local people, which will play a crucial role in supporting the growth of Scotland’s economy. At Royal Bank of Scotland we believe we have a key role to play in supporting businesses not only to start up, but to scale and succeed.”

The news comes after it emerged that more profit warnings were issued in the final quarter of 2023 by Scotland’s stock market listed companies than the first nine months combined. Ten warnings were issued in 2023, with six in Q4 alone, according to Eyparthenon’s latest Profit Warnings report. The number of Q4 warnings also marks the largest quarterly issuance from Scottish-based companies since the start of the pandemic.

Kris Aspin, Ey-parthenon partner and head of restructuring, Scotland, said: “Profit warnings data provides close to real time insight into the pressures facing firms across the economy. It’s no surprise that the ‘consumer discretionary’ sector suffered in the high inflationary and elevated interest rates environment . The pressure on disposable incomes, whilst easing, remains high, meaning discretionary spending in areas such as fashion and retail, continues to be impacted.”