UK Company Formation After ECCTA: What Entrepreneurs Need to Know in 2026

Ryan Patrick

• 11 min read
UK Company Formation After ECCTA: What Entrepreneurs Need to Know in 2026

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) has changed the practical reality of forming and running a UK company. For many years, a UK company could be incorporated with relatively little friction. A founder could choose a company name, appoint directors, allocate shares, provide a registered office and submit the incorporation application. For international entrepreneurs, the process was particularly attractive because UK company formation did not generally require the founder to live in the UK.

That accessibility has not disappeared. However, the compliance environment has become more demanding. Since 18 November 2025, identity verification has become a legal requirement for company directors and people with significant control (PSCs), with the wider transition continuing through 2026. Companies House is also receiving stronger powers to scrutinise information, improve register accuracy and take action against non-compliance.

The result is a new era of UK company formation: still accessible to international founders, but increasingly built around verified identities, accurate information and ongoing corporate transparency.

What Is ECCTA?

ECCTA is short for the Economic Crime and Corporate Transparency Act 2023. The legislation was designed to strengthen the UK's response to economic crime and improve the quality of information held on corporate registers. Its reforms affect several areas of company administration, including:

  • Identity verification for directors and PSCs
  • The role of authorised corporate service providers
  • The quality and accuracy of information filed at Companies House
  • The powers available to Companies House
  • The use of company structures for fraudulent or unlawful purposes
  • Future changes to corporate filings and accounts

The central idea is straightforward: the UK company register should contain more reliable information about the people and businesses behind companies. Companies House says identity verification is intended to reduce fraud and improve the transparency, trustworthiness and accuracy of the register. For legitimate founders, ECCTA does not make UK company formation impossible. It makes the process more structured.

Can You Still Form a UK Company After ECCTA?

Yes. ECCTA has not abolished the ability of foreign nationals, non-residents or international entrepreneurs to form UK companies. A person living overseas can still potentially:

  • Incorporate a UK private limited company
  • Become a director
  • Own shares
  • Be the sole shareholder
  • Be the sole director, where legally appropriate
  • Become a PSC
  • Operate a business from outside the UK

The major change is that people connected to UK companies must increasingly prove who they are and provide accurate information. For example, an entrepreneur living in Canada, Nigeria, Australia, Singapore or the United States may still establish a UK company. But they should now expect identity verification and potentially additional compliance checks from banks, professional service providers and other institutions.

The important distinction is between access and verification. ECCTA has not generally removed access to UK company formation for international founders. It has increased the verification expected of the people behind the company.

The Biggest Change: Mandatory Identity Verification

The most significant practical change for company founders is identity verification. From 18 November 2025, identity verification became a legal requirement for directors and PSCs, with a 12-month transition period for existing individuals on the register. New directors and PSCs are brought into the system according to the relevant requirements, while existing directors and PSCs are being phased into compliance. The process is intended to confirm that the individual connected to a company is genuinely who they claim to be.

Who needs to verify?

The rules cover people such as:

  • Company directors
  • Directors of overseas companies registered in the UK
  • People with significant control
  • Other roles that will be brought into the system as the reforms develop

Companies House states that directors receive a personal code after verification. Directors must provide the relevant verification information as part of the applicable company filing process, and companies cannot complete certain confirmation statement obligations unless the required director verification requirements have been met. For PSCs, the verification process and deadlines are separate from the director process. This distinction matters for founders who hold multiple roles.

Example: One international founder, three roles
Imagine Daniel, who lives in Brazil.

He forms a UK company and:Becomes its sole directorOwns 100% of the sharesIs therefore also a PSC
Daniel is not dealing with one generic “company verification” requirement. His identity is verified as an individual, but his verified identity must then be properly connected to the relevant company roles.

This is one reason why founders should understand the difference between identity verification, director obligations and PSC obligations.

How Do You Verify Your Identity After ECCTA?

There are two main routes.

1. Direct verification through Companies House

An individual can verify their identity directly through the Companies House service connected to GOV.UK One Login. This is generally the direct route and does not require using a company formation agent. The process may involve an eligible identity document and other information needed to confirm the individual's identity.

A biometric passport from any country may be accepted for the relevant online verification route, meaning a UK passport is not generally required simply because the company is registered in the UK. This is particularly important for non-resident founders.

2. Verification through an ACSP

The second route is through an Authorised Corporate Service Provider (ACSP). An ACSP may be a qualifying professional or business, such as:

  • An accountant
  • A solicitor
  • A company formation provider

The provider must meet the applicable requirements and be supervised by a UK Anti-Money Laundering supervisory body. An international founder can use an ACSP from outside the UK, although the ACSP itself must meet the relevant UK requirements. (Company Information Service) For overseas entrepreneurs, this route can be useful when the founder wants support with both identity verification and the wider company formation process.

What Is the Role of an ACSP After ECCTA?

The role of company formation agents has become more significant. Before ECCTA, many people viewed a company formation provider primarily as an administrative service that helped submit incorporation details. Under the new framework, an ACSP can have a more formal role in identity verification and certain Companies House services. An ACSP must:

  • Meet Companies House registration requirements
  • Be supervised by an appropriate UK AML supervisory body
  • Follow the applicable identity verification standards
  • Maintain required records
  • Carry out checks in accordance with the relevant rules

Companies House states that ACSPs verifying identities must keep records of identity checks for seven years. This creates a practical lesson for founders:

Important Lesson: Do not assume that every company formation website is automatically an authorised identity verification provider.

If you are relying on an agent to verify your identity under the ECCTA framework, check that the provider is properly authorised for the service being offered.

Companies House publishes information about ACSPs and advises users to research a provider's reputation, services, pricing and terms before engaging them. IncorpUK, for example, operates within the broader company formation and management market serving global founders. For any provider, the important question after ECCTA is not simply whether it can help register a company, but whether it is authorised and equipped to provide the specific compliance service you require.

Registered Office Rules Still Matter

ECCTA is not only about identity verification. The registered office address remains a fundamental requirement for a UK company. A company must have a physical registered office address in the appropriate UK jurisdiction. The address must also be an appropriate address, meaning that company correspondence should come to the attention of someone acting for the company and delivery should be capable of confirmation. A Royal Mail PO Box, and similar arrangements that do not meet the requirements, cannot be used as a registered office address.

This is particularly important for non-residents. A foreign founder may not have a UK home or office. That does not necessarily prevent incorporation, but the company still needs a compliant UK registered office address.

A legitimate registered office service may be appropriate where it meets the legal requirements. The broader point is that an address should not be selected simply because it looks like a UK address. The address must work as a genuine statutory communication point for the company.

ECCTA Does Not Create a UK Residency Requirement

One of the most common misconceptions is that stronger corporate verification means a company director must now live in the UK. That is not generally the case. ECCTA's identity verification requirements are not the same as:

  • UK immigration law
  • UK residence requirements
  • UK visa rules
  • UK work permission
  • UK tax residence rules

A founder may be able to own and direct a UK company while living abroad. However, the company and its owners may still have tax obligations in other countries. For example, a founder living permanently in another country may need to consider:

  • Personal tax residence
  • Corporate tax residence
  • Permanent establishment rules
  • Transfer pricing
  • VAT
  • Local business registration requirements

Company registration and tax residence are not the same thing. Forming a UK company does not automatically make the founder a UK tax resident, and living outside the UK does not automatically mean the company has no UK tax obligations. For cross-border structures, professional tax advice is often appropriate.

ECCTA and the Difference Between Companies House and Bank Compliance

Another important distinction is between Companies House identity verification and financial institution KYC. A founder may successfully verify their identity for Companies House and still be asked for additional information by:

  • A UK bank
  • A fintech provider
  • A payment processor
  • An investment platform
  • An accountant
  • A regulated financial institution

These organisations may conduct broader Know Your Customer and Anti-Money Laundering checks. They may ask about:

  • Residential address
  • Source of funds
  • Source of wealth
  • Business activities
  • Expected transaction volumes
  • Customers and suppliers
  • Ownership structure
  • Tax residence

Therefore, ECCTA compliance should not be viewed as a universal “verification certificate” that automatically guarantees a business bank account.

A realistic example


A founder in Malaysia forms a UK software company and successfully verifies their identity with Companies House.
When applying for a business account, the bank may still ask:

  • Where does the founder live?
  • Where are customers located?
  • Where is the software developed?
  • What is the expected monthly turnover?
  • Where will the initial capital come from?
    This is normal.
    Companies House verification proves identity for the Companies House framework. It does not replace every other compliance process.

What Information Must Companies Provide After ECCTA?

The reforms also reinforce the importance of accurate corporate information. Companies House is moving towards a more active role in scrutinising information rather than functioning purely as a passive filing repository. For businesses, this means directors and shareholders should be careful about:

  • Legal names
  • Dates of birth
  • Company addresses
  • PSC information
  • Share ownership
  • Director appointments
  • Company activity descriptions
  • Filing accuracy

A small error can become more significant when information is used across multiple systems. For example, if a founder's name is recorded differently across their passport, Companies House information and financial institution records, the resulting mismatch may create unnecessary delays. The practical rule is simple: Use accurate, consistent information from the beginning.

What Happens to Companies That Ignore the New Requirements?

Non-compliance can have serious consequences. Companies House states that continuing to act as a director after the applicable identity verification deadline without complying may constitute an offence. A company and its directors may also face consequences where required verification obligations are not met.

For PSCs, failing to comply with the relevant requirements can also lead to legal consequences. There may also be practical effects on the company's ability to complete certain filings. This is particularly important for existing companies.

A company that was formed before ECCTA's identity verification requirements came into effect is not necessarily permanently exempt. The transition period is designed to bring existing directors and PSCs into the new system. Companies House expects the transition to cover millions of individuals by November 2026.

What Other ECCTA Changes Should Businesses Watch?

Identity verification is the most visible change, but it is not the only development. Companies House is also moving towards further reforms affecting:

  • Filing processes
  • Third-party presenters
  • Corporate directors
  • Limited partnerships
  • Corporate PSCs
  • Company accounts

The government has outlined a transition plan in which further measures are expected to be introduced progressively. Some presenter-related measures are expected no earlier than November 2026, while other reforms will continue to develop.

Accounts reforms are also being developed. The government announced in June 2026 that changes to accounts filing are planned from April 2028, including reforms affecting small companies and micro-entities. For founders, this means the compliance environment should be viewed as evolving rather than static. A company formed in 2026 may face different filing expectations later in its life.

How Should Entrepreneurs Form a UK Company After ECCTA?

A sensible approach is to treat formation as a compliance process, not just a registration transaction.

Step 1: Choose the correct structure

Decide whether a private limited company is appropriate for your business. Consider:

  • Ownership
  • Number of founders
  • Investment plans
  • Director arrangements
  • Tax considerations
  • Whether a parent company is involved

Step 2: Identify all relevant people

Determine:

  • Who will be a director?
  • Who will own shares?
  • Who will be a PSC?
  • Are any corporate entities involved?

Step 3: Prepare identity documents

Make sure relevant individuals have suitable identification and that their information is accurate.

Step 4: Decide how verification will be completed

Choose between:

  • Direct verification with Companies House
  • An appropriate ACSP

Step 5: Arrange a compliant registered office

The company needs an appropriate UK registered office address.

Step 6: Plan for ongoing filings

Do not stop thinking about compliance once the certificate of incorporation arrives. Track:

  • Confirmation statement deadlines
  • Accounts deadlines
  • Changes in directors
  • Changes in shareholders
  • PSC changes
  • Registered office changes
  • Identity verification obligations

This is where many inexperienced founders make a mistake: they treat incorporation as the finish line. In reality, it is the beginning of the company's statutory life.

Is Forming a UK Company Still Worth It After ECCTA?

For many international founders, yes. The UK continues to offer an internationally recognised corporate environment, access to a large commercial market and a familiar legal framework for many types of businesses. But the decision should be based on genuine commercial reasons. A UK company may be useful for:

  • International consulting businesses
  • Software and SaaS companies
  • E-commerce operations
  • Agencies
  • Technology startups
  • Global service businesses
  • International trading companies

However, incorporation should not be treated as a shortcut for:

  • Avoiding tax
  • Concealing ownership
  • Circumventing immigration rules
  • Guaranteeing banking access
  • Creating artificial substance

ECCTA makes this distinction increasingly important. The strongest company structures are usually those that have a clear commercial purpose, identifiable owners and accurate information.

Frequently Asked Questions

What does ECCTA mean for UK company formation?

ECCTA has increased the compliance requirements surrounding UK companies, particularly through mandatory identity verification for directors and PSCs and stronger measures designed to improve the accuracy and transparency of Companies House information.

Can a non-resident still form a UK company after ECCTA?

Yes. ECCTA does not generally impose a UK residency requirement on company directors or shareholders. Non-residents can still potentially form and own UK companies, subject to the applicable identity verification and corporate requirements.

Do I need to live in the UK to become a UK company director?

Not generally. Living outside the UK does not automatically prevent a person from becoming a director. However, the director must comply with applicable Companies House identity verification requirements.

Can I use a foreign passport for identity verification?

A biometric passport from any country may be accepted for the relevant direct online identity verification process. The exact requirements depend on the verification route and current Companies House guidance.

What is an ACSP?

An Authorised Corporate Service Provider is an authorised person or business that can carry out certain Companies House services, including identity verification under the applicable framework. ACSPs must meet relevant registration and AML supervision requirements.

Does ECCTA require a UK registered office?

A UK company must have a compliant registered office address in the appropriate UK jurisdiction. The address must be a physical and appropriate address capable of receiving company correspondence.

Does identity verification give me a UK visa?

No. Companies House identity verification confirms identity for corporate compliance purposes. It does not provide immigration permission, residence rights or a UK work visa.

Is Companies House identity verification the same as bank KYC?

No. Banks and other financial institutions may conduct separate and broader KYC and AML checks, even after a founder has completed Companies House identity verification.

What happens if a director does not verify their identity?

A director who continues to act after the applicable deadline without meeting the verification requirements may commit an offence. The company and its directors may also face consequences for non-compliance.

Will ECCTA make UK company formation impossible for overseas founders?

No. The reforms make the process more verification-focused, but international founders can still potentially establish UK companies. The key is to provide accurate information, complete the required identity checks and maintain ongoing compliance.

Conclusion

UK company formation after ECCTA is not about closing the door to international entrepreneurs. It is about changing the conditions of entry. The UK remains accessible to non-residents, foreign founders and global businesses. But the modern formation process increasingly expects founders to be identifiable, ownership structures to be transparent and company information to be accurate. For entrepreneurs forming a company in 2026, the essential checklist is clear:

  • Understand who must verify their identity
  • Complete the appropriate Companies House verification process
  • Use an authorised provider where necessary
  • Maintain an appropriate registered office
  • Keep director, shareholder and PSC information accurate
  • Separate Companies House compliance from tax, banking and immigration advice
  • Monitor ongoing reforms as the ECCTA transition continues

The biggest mistake is to think of ECCTA as a one-time obstacle encountered during incorporation. It is better understood as a new operating environment. The UK company model remains open to global founders, but the era of casual corporate administration is giving way to a more verified, transparent and actively supervised system. For serious entrepreneurs, that is not necessarily a disadvantage. It simply means that a well-structured, accurately documented and genuinely operated company is now more important than ever.