The Economic Crime (Transparency and Enforcement) Act 2022 (‘the Act’) came in to force on 01 August 2022.
The Act introduces of a Register of Overseas Entities (‘ROE’). The ROE 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.
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.
Overseas entities will have to register with Companies House on the ROE and provide information on their registrable beneficial owners if that entity:
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:
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.
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:
The following information will be required:
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).
Name, date of birth, nationality, usual residential address, service address and the date on which the individual became a beneficial owner.
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.
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.
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.
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.
Once registered, Companies House will issue the overseas entity with an Overseas Entity ID.
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.
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.
Yes, the information will need to be verified and updated annually.
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:
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.
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.
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.
Under the ROE, 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.
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.