The Register of Overseas Entities came into force on 1 August 2022 and requires that overseas entities which own land or property in the UK declare who their beneficial owners and/or managing officers are. Overseas entities need to register with Companies House and provide these details by 31 January 2023.
The requirement to register applies retrospectively to overseas entities and does not just cover existing ownership. In addition, entities who have disposed of property or land after 28 February 2022 are also required to be registered. Failure to register by 31 Janaury 2023 may lead to substantial fines, a prison sentence or both. Overseas entities will also face restrictions on UK property transactions if they are not registered.
As part of the Economic Crime (Transparency and Enforcement) Act 2022, from 1st August 2022 Companies House requires overseas entities which own land or property in the UK to declare their beneficial owners and/or their managing officers. Entities must be registered with Companies House and have declared these details by 31 January 2023.
Failure to comply with the Act could lead to substantial daily fines or a custodial sentence, or even both as well as restrictions when buying, selling, transferring, leasing or charging land or property in the UK.
The requirement for registration applies retrospectively and applies to overseas entities who purchased land or property on or after:
- 1st January 1999 in England and Wales;
- 8th December 2014 in Scotland;
- 1st August 2022 in Northern Ireland.
Where UK land or property owned by an overseas entity during the periods mentioned above has been sold or otherwise disposed of after 28th February 2022, details of this disposal will also need to be provided to Companies House.
An overseas entity is a legal entity, such as a company or other organisation, that has legal personality and is governed by the law of a country or territory outside the UK. The Republic of Ireland is an overseas jurisdiction for the Register of Overseas Entities.
Companies House defines a beneficial owner as any individual or entity that has significant influence or control over the overseas entity and can be:
- an individual person;
- another legal entity, such as a company;
- a government or public authority;
- a trustee of a trust; or
- a member of a firm that is not a legal person under its governing law.
The conditions for registration are set out in detail on the Companies House website.
A UK-regulated agent must complete verification checks on all beneficial owners and managing officers of an overseas entity before it can be registered. Please note that this is not something that Muras Baker Jones Limited is able to do for you.
An agent assurance code will need to be provided as well as an ‘overseas entity verification checks statement’ to confirm that verification has been done.
The agent must be based in the UK and supervised under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. The agent can be an individual or a corporate entity, such as a financial institution or legal professional.
Verification checks must be completed no more than 3 months before the overseas entity is registered.
An overseas entity can register themselves directly or use a UK-regulated agent to do this for them. Companies House will require those registering to provide information about the overseas entity, any registrable beneficial owners, and the UK-regulated agent that carried out the verification checks. Information about managing officers may also need to be provided. There is also a £100 registration fee to pay.
Most of the information declared to Companies House, except for the more sensitive information (e.g. home addresses), will be in the public domain in the Register of Overseas Entities.
Once registered the overseas entity must file an annual update one year after it was registered, and every year after that. The annual update informs Companies House about any changes, or confirms that the information held is still correct. It must be filed no later than 14 days after the due date. It can also filed earlier if any information requires updating.
Further detailed guidance on the registering of an overseas entity holding UK property or land can be found at https://www.gov.uk/guidance/register-an-overseas-entity.
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