The Register of Overseas Entities came into force in the UK on 1 August 2022 through the new Economic Crime (Transparency and Enforcement) Act 2022.
The new Register of Overseas Entities is held by Companies House and requires overseas entities that own land or property in the UK to declare their beneficial owners and/or managing officers.
What is the Register of Overseas Entities (ROE)?
A new register giving details of the beneficial ownership of all overseas entities who own UK property, whether commercial or residential. The Register will be maintained at UK Companies House and will be publicly accessible.
Overview of the Register
- Overseas entities who want to buy, sell, or transfer property or land in the UK, must register with Companies House and provide details of who their registrable beneficial owners or managing officers are
- This will also apply retrospectively to overseas entities who bought property or land on or after 1 January 1999 in England and Wales, and 8 December 2014 in Scotland
- The overseas entities will need to register with Companies House by 31 January 2023
- In addition, information will need to be provided to Companies House where overseas entities dispose of land after 28 February 2022
- After registering, the overseas entity will get a unique Overseas Entity ID (OEID) to give to the land registry when it buys, sells, transfers, leases or charges UK property or land
What is an 'overseas entity'?
A legal entity that is governed by the law of a country or territory outside of the UK (note, this captures entities formed in the Channel Islands). For these purposes a 'legal entity' includes any entity which is a legal person under the law by which it is governed, for example, non-UK incorporated companies; LLPs; foreign foundations and non-UK partnerships with a legal personality. Non-UK trusts are not 'overseas entities' as they do not have a separate legal personality but those that hold UK property indirectly through an overseas entity will be caught.
Companies House registration
The application to the ROE must include certain prescribed information about the registrable beneficial owners and managing officers of the overseas entity. This information needs to be updated annually.
Once an entity has been successfully added to the ROE, Companies House will issue an overseas entity identification registration number (OEID) which will then be used for Land Registry applications. The OEID will be added to the proprietorship register on the official copies of the property held by the Land Registry. The OEID will also need to be added to certain prescribed form documents (e.g. transfers and leases).
Penalties for not complying with the ROE filing obligations include fines of up to £2,500 per day or a prison sentence of up to five years, along with restrictions when buying, selling, transferring, leasing, or charging property in the UK.
Verification of information
Before an overseas entity registers its beneficial owners or managing officers on the ROE, a UK-supervised “relevant person” will need to verify the required information about them as set out in the ECTE Act. These verification checks must be carried out by a UK-based agent supervised under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. Supervised agents will need to provide an agent assurance code (the equivalent of a signature) and an overseas entity verification checks statement to Companies House to confirm that the appropriate procedure is followed.
Next steps
Review of existing overseas entity property structures should be prioritised. Any property transactions since 28 February 2022 and all current property transactions by overseas entities should be carefully considered to ensure that the reporting obligations of the entity are met. Please get in touch with us if you would like any assistance with the ROE.
Companies House Guidance can be found on the government website here.