Guide to The Register of Overseas Entities

Overview

The Economic Crime (Transparency and Enforcement) Act 2022 (‘the Act’) came into force on 01 August 2022.

The Act introduces a Register of Overseas Entities (‘ROE’). The Register of Overseas Entities will be kept by Companies House and will contain details of overseas entities which own UK property and will reveal the identities of their beneficial owners to aid the government in fighting economic crime and encourage greater transparency.

Companies House has issued guidance that can be reviewed here on how to comply with the ROE.

Whilst we will continue to monitor any new information that is published by Parliament, Companies House and other bodies, this guide provides a high-level overview of the ROE. To find out more about how Elemental can help, visit our Register of Overseas Entities page.

Elemental offer a fully managed Register of Overseas Services.

From help to identify beneficial owners through to verification and registration.

Find out more>>

 

Who will need to register with Companies House?

Overseas entities will have to register with Companies House on the ROE and provide information on their registrable beneficial owners if that entity:

  • already owns a qualifying estate and was registered as proprietor at the Land Registry further to an application made on or after 1 January 1999; or
  • wishes to acquire a qualifying estate; or
  • wishes to make certain dispositions (a transfer, grant of a lease for more than seven years, or the grant of a charge) of a qualifying estate.

An overseas entity means a legal entity that is governed by the law of a country or territory outside the United Kingdom. A legal entity is defined as meaning a body corporate, partnership or other entity that is a legal person under the law by which it is provided.

A qualifying estate is a freehold, or a leasehold granted for a term of more than seven years from the date of grant.

A registrable beneficial owner of an overseas entity is an individual, government, public authority or other legal entity who:

  • holds directly or indirectly more than 25 per cent of the shares of the overseas entity; or
  • holds directly or indirectly more than 25 per cent of the voting rights of the overseas entity; or
  • holds directly or indirectly the right to appoint or remove a majority of directors of the overseas entity; or
  • has the right to exercise or actually exercise significant influence or control over the overseas entity (‘beneficial owner’).

If the overseas company does not have details of its beneficial owners, it must send an information notice to any person that it knows, or has reasonable cause to believe, is a beneficial owner.

Where an overseas entity cannot identify all or any of its beneficial owners, it should disclose its managing officers in the ROE.

 

What application will need to be submitted to Companies House?

The application will contain the name and contact details of someone who may be contacted about the application, together with one of these three statements:

  1. the overseas entity has identified one or more registrable beneficial owners, it has no reasonable cause to believe there are others and the overseas entity is able to provide the required information about each registrable beneficial owner it has identified. The required information about the overseas entity and each beneficial owner that the overseas company has identified will need to be provided.
  2. the overseas entity has no reasonable cause to believe that it has any beneficial owners. The required information about the overseas entity and each managing officer of the overseas entity will need to be provided.
  3. the overseas entity has reasonable cause to believe that there is at least one beneficial owner that it has not identified and/or that the overseas entity is not able to provide the required information about one or more of the registrable beneficial owners it has identified. The required information about the overseas entity, each managing officer and each beneficial owner that the overseas entity has identified or so much of that information as it has been able to obtain will need to be provided.

 

What information will need to be included in the application?

The following information will be required for the Register of Overseas Entities:

Overseas entity

Name, country of incorporation, registered or principal office, service address, email address, legal form of the entity, the law by which it is governed, any public register in which it is entered and its registration number in that register (if applicable).

Where a beneficial owner is an individual

Name, date of birth, nationality, usual residential address, service address and the date on which the individual became a beneficial owner.

Where a beneficial owner is a legal entity (other than a government or public authority)

Name, registered or principal office, service address, legal form of the entity, the law by which it is governed, any public register in which it is entered, its registration number in that register (if applicable) and the date on which the entity became a beneficial owner.

Where a beneficial owner is a trustee

Name of the trust, date the trust was created, information regarding current and historic trustees and information regarding any person that has the power to appoint or remove trustees or exercise certain rights over a trustee’s powers.

If no beneficial owner has been identified, information will be required to be provided on the managing officers.

 

Is there a requirement for a third party to verify the required information to be filed on the ROE?

Yes, before an overseas entity can apply to register on the ROE, a UK-supervised ‘relevant person’ will need to verify the required information about the overseas entity, beneficial owners or managing officers.

These verification checks must be carried out by a UK-based agent that is supervised under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (‘Supervised Agent’).

Details about the person who verified the required information about the beneficial owner or managing officer will be shown on the public register.

Elemental is a Supervised Agent and is able to carry out the necessary verifications.

 

Who can make the application at Companies House?

The overseas entity itself or a Supervised Agent can make the application.

Companies House has however advised that it will be quicker and easier for a Supervised Agent to register on the overseas entity’s behalf, as well as verifying the required information about their beneficial owners or managing officers. Companies House has issued a warning that registration may take longer to process if the overseas entities complete the registration themselves.

Elemental is able to carry out the necessary verifications and make the application.

 

How will I know if my application is successful?

Once registered, Companies House will issue the overseas entity with an Overseas Entity ID.

 

What will be the deadline for registration at Companies House?

 

  • An overseas entity that already owns a qualifying estate and was registered as proprietor at the Land Registry further to an application made on or after 1 January 1999 will need to register on the ROE within 6 months from the date on which the ROE comes into force (‘Transitional Period’).
  • An overseas entity that owns or owned a qualifying estate but disposes of it between the 28 February 2022 and the date the ROE comes into force will need to provide Companies House with details of the disposal and its beneficial owners before the disposal before the end of the Transitional Period.
  • An overseas entity that wishes to acquire a qualifying estate after the ROE comes into force will need to register as soon as the ROE will come into force. It will not be possible for an overseas entity to be registered as the proprietor of a qualifying estate without first registering on the ROE.

 

Who will have access to the Register of Overseas Entities?

Members of the public will be able to inspect the register of overseas entities.

Individuals can apply to protect their information on the ROE if they believe the activities of their overseas entity, or the characteristics or personal attributes of the individual when associated with that overseas entity, will put them or the people living with them at serious risk of violence or intimidation.

 

What will happen if an overseas entity does not comply with the Act?

The overseas entity and managing officers can face criminal sanctions (including imprisonment) and civil penalties.

It is important to note that the Land Registry will enter restrictions on the title of any qualifying estates where the registered proprietor is an overseas entity that was registered as proprietor further to an application made on or after 1 January 1999. These restrictions will prohibit the registration of any transfer, lease for a term of more than 7 years or charge on the property unless the overseas entity has fulfilled its registration requirement or is exempt.

Overseas entities will therefore ultimately face restrictions when trying to sell, lease or buy a qualifying estate. A buyer will not be able to acquire legal title of a property if the overseas entity that sold the property is not registered on the ROE. An overseas entity that buys a qualifying estate will also not be able to register its legal interest at the Land Registry if it has not registered on the ROE. It is expected that some exceptions will apply during the Transitional Period.

 

Will the information on the Register of Overseas Entities to be updated?

Yes, the information will need to be verified and updated annually.

 

How can Elemental help

We already have extensive experience assisting overseas entities with their existing reporting obligations in the UK.

We appreciate that compliance with the new registration requirements may be onerous and time-consuming. Elemental will support you in this process and will provide the following services to help you comply with the Register of Overseas Entities legislation:

Verification and registration at Companies House

  • supporting you to identify the correct disclosures and identifying the beneficial owner(s);
  • verifying the overseas entity, the beneficial owner(s) or the managing officer(s) as appropriate; and
  • registering the overseas entity and all necessary verification with Companies House.

 

Annual update

We will handle the annual update at Companies House and all the relevant verification that will be required, in the same manner as the original verification and registration.

Protection of Information

Although the name of individual beneficial owners will be on the public record, in certain circumstances it will be possible to protect the information of individuals from public disclosure. We understand the process for this will be similar to the existing process for PSCs which is well established.

Individuals can apply to protect their information if they believe the activities of their overseas entity, or the characteristics or personal attributes of the individual when associated with that overseas entity, will put them or the people living with them at serious risk of violence or intimidation.

We can advise the individual on this process and make the application on their behalf.

Service Address

The overseas entity, the beneficial owner(s) or the managing officer(s) need to provide a service address (in addition to their registered office or residential address). We assume the registered office and residential address will not be included on the public record (although this has yet to be confirmed), but the service address will be public. We will provide a service address in the UK to handle all mail received in relation to the overseas entity. This service will be delivered via our secure digital mailroom, allowing easy online access anywhere in the world.

Other services

Under the Register of Overseas Entities, there are also other actions required and which require the support of a Supervised Agent. We plan to support you with all aspects of the ROE.

We are continuing to work through the information as it is published by Parliament, Companies House and other bodies. We will produce a further update once more information is made available.

For more information on our service please visit our Register of Overseas Entities service page or please contact us if you have any questions and would like us to assist in preparing for compliance with the new regime.

The guide refers to property in England and Wales. Rules differ in relation to property located elsewhere in the UK. The guide is not intended to be legal advice and should not be relied upon as such. If you are in any doubt as to your legal obligations you should obtain independent legal advice.

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