Sign up to FREE email alerts from businessInsider - Daily Subscribe Thank you for subscribing See our privacy notice Invalid Email

The number of new tech companies being set up in Scotland rose by 77 per cent last year, according to a new analysis by accountants RSM.

In total, 440 software and programming businesses were incorporated north of the Border during 2017, a 77 per cent increase on the 249 launched in the previous year. The percentage increase puts Scotland second only to the north-east of England of the 12 UK regions examined.

Throughout the UK, there were 10,016 technology businesses set up last year, with annual increases recorded in every region.

"These figures show very clearly that despite the fears of a post-referendum slowdown, Scotland's tech sector is growing at a healthy rate," said Ross Stupart, partner at RSM in Edinburgh.

"There are a number of reasons for this. Scottish universities are playing a key role in developing and nurturing exceptional talent and we continue to attract the world's brightest and best.

"Organisations such as EIE , FutureX Innovation, Start-up dinners, Turing Festival and Entrepreneurial Scotland are also contributing significantly in creating a vibrant and supportive tech eco-system. Entrepreneurs are able to gain good access to finance, either through traditional sources of debt at relatively cheap rates, or from venture capitalists, angel networks and private equity funds."

Stupart added that the UK's tax regime is also proving "an incredibly powerful tool" as firms take advantage of legitimate tax saving and incentive programmes. These include R&D tax credits, video games tax relief and the Patent Box regime.

"There is undoubtedly the political will to build momentum and generate further growth as part of the government's overall industrial strategy," he said.

"However, there are some clouds on the horizon. While many in the sector will be cheered by the news that EU nationals will continue to be able to come and work in the UK during the transition period, the longer-term position is as yet unclear."

"As interest rates start to rise, we may also see a shift away from venture capital and private equity as investors seek returns from safer investments. For now though, the funding environment is incredibly benign."