Your horse can be permanently identified by a microchip, which usually is inserted half way down the crest of the neck on the left hand side. A horse can be microchipped at any age and chips are completely safe and contain a unique number, which is easily read by a scanner.
You are registered as the owner and the chip identifies the horse as yours. It is a useful addition to identification in passport documents, it helps deter theft and will greatly increase your chance of recovering your animal if it is stolen or strays.
It is now mandatory to microchip foals (and adult horses not previously identified) before a passport can be issued.