The Economic Crime (Transparency and Enforcement) Act 2022 means changes for Companies House and those who use its services (as summarised in our previous article). One change, effective from 1 August, is the Register of Overseas Entities (ROE) requiring overseas entities that own UK land bought since January 1999 to declare their beneficial owners or managing officers.
The Government describes the ROE as ‘designed to root out corrupt oligarchs and elites attempting to hide ill-gotten gains through UK property’.
When do I need to register?
- Entities that already own land in the UK will have until 31 January 2023 to register
- New purchasers will need to register for transactions from 1 August 2022
The ROE will need to be updated annually.
What happens if I don’t register?
Entities that don’t register with Companies House will be unable to buy, sell, transfer or lease land, or create a charge against the land in the UK and could potentially face criminal and civil sanctions.
Who should register?
Broadly speaking, disclosure is required of beneficial owners who:
- Hold more than 25% of the shares or voting rights
- Hold the right to appoint or remove the majority of the board
- Exercise, or have the right to exercise, significant influence or control over the entity
What information does Companies House need?
Based on our experiences of the ROE’s registration process, the key information required for each beneficial owner is:
- Date of birth
- Service address
- Usual residential address (although this will not be made public)
- Which conditions the beneficial owner satisfies
- The date they became a registrable beneficial owner
Where a beneficial owner of the entity is a trustee, certain information about the trust needs to be provided to Companies House, although that information will not be made public.
What else do we know about the Register of Overseas Entities?
At the time of writing, the detailed ROE guidance expected from Companies House has yet to be published. However, some practical points to keep in mind include:
- Before being able to complete the ROE for a client, agents will need to request an agent assurance code from Companies House. This Gov.UK page has details of how to do that
- It is necessary to confirm the date (within the last three months) that verification checks took place
- Confirmation that the beneficial owner(s) is not on the sanction list is also required.
- There is a £100 registration fee that we expect will be charged at each annual update
Shall I wait for Companies House to contact me about registration?
Companies House has said it will be ‘writing to all overseas entities captured by the Act who own land in England, Wales and Scotland to make sure they know about their new responsibilities.’
However, given the delays commonly experienced with official post, especially for clients outside the UK, we recommend that affected entities should not wait for this correspondence from Companies House before acting.
As mentioned above, there is only a six -month transition period for entities that already hold UK property, i.e. a need for them to register before February 2023 to avoid restrictions on their ability to enter into transactions in relation to UK land. Prompt action should also help avoid any exposure to the potential financial or criminal penalties that could apply.
If you’re involved with an overseas entity (as an owner, managing officer, agent or other adviser) and would like to know more about the Register of Overseas Entities and how our specialists can help you with the registration process, please get in touch using our enquiry form.