REGISTER OF OVERSEAS ENTITIES
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. An overseas entity which acquires UK property will need to register in advance at Companies House (and this includes the requirement to file beneficial ownership information, which will be publicly available) before applying to register its land acquisition with the Land Registry.
The register is designed to increase transparency of beneficial ownership of overseas entities within an interest in UK land in an effort to combat financial crime. Any body corporate, partnership or other legal entity which is governed by the laws of a country outside of the UK (an overseas entity) will be covered under these regulations, however, there are some entities that will be exempt from the definition of overseas entity and would be worth looking into.
So, why is this important? why do we need to know about it?
It's great to combat financial crime. However, it is important to law firms and to the clients, particularly, as failure to or a breach of the legislation is potentially a criminal offence, both by the entity and also, if you're acting as that verifying entity. The penalties for non-compliance can be severe. There's penalties of fines to the entities themselves of up to £2,500 a day and up to five years imprisonment. Interestingly, the company's house has written to every entity who they've been able to identify from the HMLR’s data, to say these are the deadlines, these are the penalties, so everyone should have got one depending on how accurate their data is.
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.
What is the deadline for registration?
Any overseas entity which held a Qualifying Estate on 1 August 2022 is required to apply to register by 31 January 2023 but where a relevant disposition of land is to take place on or after 5 September 2022, the relevant overseas entity must be duly registered prior to completion in order that the appropriate entries can be made in the land register.
Timescales to note:
The new register of overseas entities (ROE) came into force on 1 August 2022 with a transitional period to 31st January 2023
Retrospectively applies to overseas entities registered as proprietors of land in England & Wales at HMLR on or after 1 January 1999 and in Scotland since 8 December 2014.
A requirement to declare disposals from 28 February 2022
The HMLR will not require an application to register to include an Overseas Entity ID number until 5 September.
If you have any questions about staff training or would like to be in the sessions, get in touch with us firstname.lastname@example.org
You can also get a free trial here of our newly developed course specifically to help you remember the salient points of the ROE regulations.