With a 17.9% increase in new business incorporations compared to the second half of 2024, Scotland ranks second only to the North East in relative growth.

This surge reflects a revitalised entrepreneurial landscape across the region, with founders responding to local demand and economic opportunity. The most active sector was found to be hospitality, which saw 2,131 new restaurants, pubs, cafés, and takeaways established in H1 2025 – an 18.7% increase from H2 2024.

Meanwhile, property development and construction recorded 1,316 new startups, up 23.1%, and tradespeople and trade services experienced the highest sectoral growth at 27.1%, with 1,305 new businesses launched.

The figures highlight Scotland’s growing role in the UK’s business recovery, with startup momentum extending beyond traditional hubs.

More broadly, the Startup Index found that ten UK regions recorded a rise in startup activity in the first half of 2025, signalling renewed confidence in the UK’s entrepreneurial landscape.

The North East saw the fastest growth compared to the second half of 2024, with a 19% increase in the number of startups, totalling 10,400. Other regions also posted strong gains: the West Midlands by 16.9%, and the North West by 16.5%. Overall, 426,000 new businesses were registered with Companies House in the first half of 2025. This follows a volatile 2024, which began with a record 468,000 incorporations in H1 but dipped to 378,000 in H2 - the lowest quarterly level since 2021.

James Holian, head of Business Banking at NatWest, said: “The first half of 2025 has shown that the UK’s entrepreneurial spirit is not only alive but accelerating.

“What’s particularly encouraging is the surge of innovation coming from regions like Scotland, which has emerged as the second fastest-growing area for startups in the UK. This momentum reflects the depth of talent and ambition among founders up and down the country.”

Mr Holian continued: “Entrepreneurs and startups are vital to our economy and at NatWest we’re proud to have supported over 10,000 new businesses through our NatWest Accelerator programme, creating 12,000 jobs, and driving £700 million in investment so far.

“This year, we’ve raised our ambitions even further by welcoming another 10,000 entrepreneurs to the programme, launched a £1m funding competition for small business owners, and expanded our digital support through the new NatWest Accelerator app.

“As the UK’s biggest bank for startups, we play a vital role in nurturing shoots of new business growth to attract jobs and investment to the UK, especially in high-potential areas like Scotland. We’re committed to helping more businesses get started, because we know that when small businesses succeed, so does the UK.”

A standout success story from the NatWest Accelerator hub in Glasgow is Clovo, an AI-powered health platform co-founded by Rory Skinner and incorporated earlier this year. Clovo delivers hyper-personalised prehabilitation and rehabilitation programmes for surgical and cancer patients, aiming to improve recovery outcomes, enhance patient experience, and reduce healthcare costs.

At the heart of Clovo is a proprietary recommendation engine that generates adaptive exercise, emotional support, and nutrition plans, clinically validated by physiotherapists, psychologists, and dietitians. These are delivered via Amy, Clovo’s AI recovery coach, offering 24/7 guidance with strict clinical guardrails. Unlike traditional prehab tools, Clovo eliminates the need for human coaching, providing fully automated, AI-personalised programmes tailored to each patient’s condition, treatment pathway, and recovery stage. Clovo is now actively seeking investment to scale its impact.

Rory Skinner, Co-Founder and CEO, Clovo, said: “The NatWest Accelerator has been instrumental in our development, providing not just a base to work from – with a strong community of like-minded entrepreneurs – but also expert coaching, access to a strong network, and invaluable introductions. The support has helped us make rapid progress.”

Lord Livermore, Financial Secretary to the Treasury, said: “It is extremely welcome to see startup activity increase in ten separate regions, helping to deliver jobs and investment in communities right across the UK.

“Through our £120 billion capital investment in growth-generating projects, our Plan for Small and Medium Sized Businesses and our Industrial Strategy, we are backing Britain’s entrepreneurs and startups to expand further, grow faster and create more well-paid jobs.”

Henry Whorwood, managing director at Beauhurst, said: “It is encouraging to see some recovery from the incorporation volumes seen at the end of 2024. Whilst still down from previous first halves, this recovery is impressive when against a challenging macro background, and policies announced in the Budget that were antagonistic to entrepreneurs.”