August 19, 2022 Register of Overseas Entities Verification – How it works
On 1 August, the register of overseas entities went live. The Register is kept by Companies House and contains details of overseas entities which own UK property and who owns and controls them, with the aim of increasing transparency and fighting economic crime. To find out more, read our register of overseas entity guide.
The challenges of verifying information
Although the new rules are based on existing practices around Anti-Money Laundering (AML) and the persons of signification control (PSC) regime there are some key distinctions. One of these is the need to verify the information before it appears on the register of overseas entities. Given one of the major criticisms of the PSC register is the lack of verification, the new approach should have been welcomed. However, law firms and other professional advisors have instead reacted with nervousness due to possible criminal sanctions for getting it wrong. The Law Society advised its members to demonstrate “extreme caution” when it comes to verifying information.
Verification can be carried out by what Companies House refers to as UK Regulated Agents, also referred to as relevant persons in the legislation. These can be: credit institutions and financial institutions; auditors, insolvency practitioners, external accountants and tax advisers; independent legal professionals; trust or company service providers; or estate agents and letting agents.
Elemental CoSec is a company service provider and authorized UK regulated agent with extensive experience of dealing with AML, the PSC register, Companies House and overseas entities. Here we our experts explain our approach to the verification stage.
How to verify information for the Register of Overseas Entities
Once the overseas entity has identified its beneficial owners, served them a s12 notice and obtained the relevant information, the information must be verified. The overseas entity may or may not have had external help to identity their ownership structure; however, they must seek independent help from a UK regulated agent to verify all the relevant information.
The approach to verifying will vary depending on whether the relevant jurisdiction has a public registry or not. Table 1 provides a summary of our approach in each case.
Where there is no public registry and a corporate service provider is used, the corporate service provider needs to append evidence. A lawyer would not.
Table 1 – Verification of the Overseas Entity
| Evidence of Verification | Public registry | No public registry (examples) |
|---|---|---|
| Name of Overseas Entity | Public registry | Evidence from: • lawyer in jurisdiction • Or corporate service provider |
| Country of incorporation or formation | If Registered office – As above, If Elemental - None If Otherwise - lease or similar. |
|
| Registered or principal office |
||
| Service Address |
||
| E-mail Address | Unique code sent to email and entered through our portal | |
| Legal form of the entity and the law by which it is governed | Public registry | Evidence from: • lawyer in jurisdiction • Or corporate service provider |
| Any public register in which it is entered and, if applicable, its registration number in that register | N/A | |
Table 2 shows our approach to how we would verify an individual beneficial owner (the evidence for a corporate would be slightly different).
Table 2 – Verification of an individual beneficial Owner
| Information | Evidence of Verification |
|---|---|
| Name, date of birth and nationality | Passport and e-verification (with liveness check) |
| Residential Address | Certified bank statement or utility bill |
| Service Address | If Residential address – As above If Elemental or Registered Office – None If Otherwise – Lease or Similar |
| Date on which the individual became a registrable beneficial owner | Statement from a lawyer in the jurisdiction Statement from a professional with evidence Extract from a company beneficial ownership registry |
| Ownership conditions | |
| Sanctions | Check UK Sanctions List |
Unlike AML rules, there is no risk-based approach so those undertaking verifications are advised to follow a more rigorous checklist-based approach to ensure everything is covered off.
Registration of Overseas Entities Verification – A Practical Example
Elemental CoSec was invited to present to representatives from some of the UK’s leading law firms. Here is an extract of the webinar where our directors, Nick Lindsay and Tobias Latham provide a practical example of verification.
How we can help with verification and more
Our register of overseas entities verification service is part of a fully managed service that includes: helping to identify the beneficial owners, verification, and registering the information with Companies House. For more information, contact us.
