The Register of Overseas Entities has been created under the Economic Crime (Transparency & Enforcement) Act 2022, with the intention of reducing economic crime within the UK whilst ensuring that the country remains attractive to legitimate investment. The Register will be held at Companies House and will come into force from 1 August 2022 at 9am.
The Register requires that any overseas entity buying, transferring or selling land or property within the UK declare its beneficial owners and/or managing officers in order to provide greater transparency.
An overseas entity is defined by Companies House as a legal entity which has a legal personality and is governed by the law of a country or territory outside of the UK.
A beneficial owner is categorised as an individual or entity who:
- Holds, directly or indirectly, more than 25% of shares in the entity
- Holds, directly or indirectly, more than 25% of voting rights in the entity
- Holds the right, directly or indirectly, the appoint or remove a majority of the board of directors of the entity
- Has the right to exercise, or actually exercises, significant influence or control over the entity
Overseas entities affected by the Act will need to apply to Companies House for an Overseas Entity ID (OE ID), which they will need to use in all land or property transactions. To apply, the overseas entity will need to use a UK-regulated agent to complete verification checks, and this same agent can apply to Companies House on their behalf – this will make the process quicker and easier.
The new rules will apply retrospectively to overseas entities who bought property or land on or after 1 January 1999 in England and Wales or 8 December 2014 in Scotland. The new requirements are not applicable to those who purchased property or land before these dates. Any overseas entities who currently own land or property in the UK will have 6 months to register the details of their beneficial owners and/or managing officers from 1 August 2022. As with all Companies House filings, any changes must be recorded within 14 days.
Anyone found to be non-compliant with the Economic Crime (Transparency & Enforcement) Act 2022 will be committing a criminal offence, liable for a fine of up to £2,500 a day or a 5-year prison sentence, in addition to restrictions on what they can do with land or property they own or wish to purchase or sell.
We are expecting further guidance in the coming weeks from Companies House, HM Land Registry and the Government – check back soon for more updates.