Entity Setup in the UK: How the Economic Crime & Corporate Transparency Act Is Reshaping Company Formation

Overview of the ECCT Act and Its Purpose

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) is being implemented in stages. Its goals include: increasing register accuracy; preventing misuse of corporate structures; and improving checks on those behind companies in the UK. (changestoukcompanylaw.campaign.gov.uk)

Major Changes in Entity Setup

1. Mandatory Identity Verification

   • From 18 November 2025, anyone becoming a director or Person with Significant Control (PSC) of a UK company is required to verify identity. Existing directors/PSCs will have a 12-month transition period in which to do so. (gov.uk)
   • Verification may be done through GOV.UK One Login or via an Authorised Corporate Service Provider (ACSP). (gov.uk)

2. Changes to Fees

   • From 1 February 2026, fees for certain filings are increasing, including:
     • Incorporation (digital filing): new fee £100
     • Confirmation statement (digital): £50
     • Voluntary strike-off: £13 (gov.uk)
   • Community Interest Companies (CICs) face even steeper increases: online incorporation fee jumping from £65 to £115, paper from £86 to £139. (gov.uk)

3. Restrictions on Overseas Directors and Agents

   • The Act will prohibit overseas companies from acting as corporate directors in the UK, requiring that any corporate director must have an all-natural person board. Implementation is targeting no earlier than November 2026. (gov.uk)
   • Third-party agents who file on behalf of companies must become Registered ACSPs and comply with UK anti-money laundering rules. (gov.uk)

Impact on Businesses and Founders

• Startup founders and investors need to plan for extra costs and delays during incorporation due to new fee schedules and verification checks.
• Foreign directors or corporate bodies wanting control or ownership stakes in UK companies will face stricter limits. Plan ahead by converting to natural person directors or restructuring shareholding.
• Service providers and intermediaries must ensure compliance by registering as ACSPs and integrating identity verification in their workflows.

Practical Examples

• Carol, forming a new company on 5 February 2026: She must pay the new digital filing fee of £100 and verify her identity as she becomes a director.
• Delta Ltd., a foreign entity previously set up as corporate director: from November 2026 certain operations may be disallowed; restructuring to appoint natural persons will likely be required.

Steps to Prepare for ECCT Compliance

• Verify your identity early, if not already a director or PSC, before the deadline; keep documentation handy.
• Confirm your registered office address, email address and company’s lawful purpose, as required in confirmation statements. (changestoukcompanylaw.campaign.gov.uk)
• If using agents to make filings, ensure they are register as ACSPs and supervised for anti-money laundering.
• Budget for increased costs—incorporation, confirmation statements, and other filings will be more expensive.

Conclusion

Entity setup in the UK is entering a phase of greater transparency, higher administrative burden and cost. The implementation timeline under the ECCT Act demands preparation. Whether you're founding a company, acting as a director, or using agents, verify identity early, understand new fees, and adjust your structure accordingly to stay compliant.