The number of VAT registered businesses grew by almost 15,000 during 2003, new figures show.
The rise in business 'stock' came at a time when entrepreneurs were facing the tail end of a global economic pinch, a fact that highlights the resilience of UK enterprise.
Government figures show 189,900 registrations and 174,400 de-registrations in the UK in 2003 - equivalent to 40 registrations and 36 de-registrations for every 10,000 people aged 16 or over.
Counting the number of VAT registered companies is not the same as counting newly created ones, but it does show that the UK is at the forefront of business growth.
At the end of last year, enterprises did not have to register for VAT until they reached an annual turnover of £56,000. Just 1.8 million of the UK's 4 million businesses were registered in January 2003.
Small business minister Nigel Griffiths welcomed the news, saying it was thanks in part to the Enterprise Act - new legislation which has made it easier for companies to go into administration rather than go bust.
It also allows failed entrepreneurs to learn from their mistakes and get back into business in just 12 months - previously it was three years.
"It's encouraging to see that not only are more people becoming self-employed, but there are also more businesses reaching the VAT threshold which is itself the highest in Europe," said Griffiths.
"This growth bears out the government's commitment to the small business sector, through the Small Business Service providing a strong voice for small firms within government to Business Links providing quality support and advice to enable firms to expand."
All regions enjoyed a rise in business registrations, with the North East, Yorkshire and the Humber reporting the biggest percentage increases.
By industry sector, the biggest fall in registrations came amongst agricultural and manufacturing companies, while business services, construction and parts of the leisure industry saw big gains.