The Register of Overseas Entities – what it means for overseas organisations
Sponsored feature | Joe Greenstock, corporate solicitor, HCR Hewitsons
Pursuant to the passing of the Economic Crime (Transparency and Enforcement) Act 2022 (ECTEA) in March, a new Register of Overseas Entities (ROE) was launched at Companies House on August 1, with the intention of increasing transparency in respect of ownership of UK property by overseas entities.
Consequently, any overseas entity seeking to buy, sell, lease or charge property in the UK must now register on the ROE. This obligation applies to non-UK incorporated companies, LLPs, and other corporate bodies which, under the laws of their own jurisdiction, have separate legal personality as a registered proprietor of UK property.
In addition, this requirement will apply retrospectively to overseas organisations which acquired property either on or after January 1, 1999 in England or Wales, December 8, 2014 in Scotland, or August 1, 2022 in Northern Ireland – these entities must register by no later than January 31, 2023. Similarly, any overseas entity disposing of property in the UK after February 28, 2022 is also compelled to register with details of that disposal.
An application to register must contain details of the entity’s registrable beneficial owners with confirmation that the entity has taken all reasonable steps to identify them. The definition of a registrable beneficial owner is broad but includes an individual or a registrable legal entity holding at least 25 per cent of the shares or voting rights in the applicant, or otherwise having the ability to exercise significant influence or control over that organisation.
Alternatively, the entity may state that either it is unable to provide such information, or that it does not believe the entity has any beneficial owners – in which case it is obliged to provide information relating to its managing officers, such as its directors, managers or company secretary.
Information submitted to Companies House must be independently verified by a UK-regulated agent, being UK-based and supervised under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017.
Failure to comply with the provisions of ECTEA may result in the overseas entity and its officers committing a criminal offence and being subject to sanctions including a fine of up to £2,500 per day for the period of default, imprisonment for the entity’s officers for up to five years, and restrictions on dealing with UK property.
If an overseas entity is not registered on the ROE when applying to register an acquisition of UK property, their application will be rejected. Similarly, an entity seeking to dispose of UK property without being registered will find that the purchaser, lender or tenant cannot register the deed in their favour.
For more information, contact Joe Greenstock on 01223 447433 or email jgreenstock@hcrlaw.com.
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