BLOG: The 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. Here we address the key questions and provide an update.

The Register of Overseas Entities in short is, a public register of the verified details of the ‘ultimate beneficial owners’ (UBOs) of overseas entities that own UK property.

The overriding purpose of the register is to tackle money laundering and economic crime in the UK property market through increased transparency of ownership, and control, by having a public record searchable on the Companies House registry.

Any overseas entity wanting to buy, sell or transfer property or land in the UK must register with Companies House and provide details of the registrable beneficial owners. An overseas entity must also submit an annual ‘Update Statement’ on Companies House, 12 months from the date it was initially registered.

Qualifying Estate means a freehold property or a leasehold interest granted for a term of seven years or more in the UK.

The land registration element of the Act came into force on 5 September 2022 and placed restrictions over titles at Land Registry until the overseas entity obtained an Overseas Entity ID from Companies House.

i. They hold, directly or indirectly, more than 25% of shares in the entity

ii. They hold, directly or indirectly, more than 25% of the voting rights in the entity

iii. They hold the right, directly or indirectly, to appoint or remove a majority of the board of directors of the entity

iv. They have they right to exercise, or actually exercise, significant influence or control over the entity

If there are no beneficial owners, or not all beneficial owners have been identified, then the details of the managing officers of the overseas entity will need to be provided. This could be a director, manager, or company secretary of the overseas entity.

A UK-regulated agent must complete the ‘verification check’ on all beneficial owners of an overseas entity before it is registered. This is also the case when submitting the Update Statement if there have been any changes, if one of the registrable beneficial owners has changed home address for example.

The UK-regulated agent must be based in the UK and supervised under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. They can be an individual or corporate entity. Once they have completed their verification checks, they will provide us with an agent assurance code and overseas entity verification statement to confirm this has been done, which is then submitted to Companies House.

Companies House launched their online service for Update Statements in 2023. This is a statement to confirm to Companies House that all the information held on the register is correct and up to date.

A UK-regulated agent must complete the ‘Update Statement’ if there have been changes, for example, if one of the registrable beneficial owners has changed home address.

N.B. A statement must be filed even if nothing has changed.

Overseas entities not registered on Companies House will face restrictions on selling, transferring, leasing or raising charges against their property/land and they also cannot purchase any new UK property without an Overseas Entity ID.

Furthermore, it is a criminal offence to not file an Update Statement.

Companies House has advised that they will soon be issuing financial penalties to those who have not registered.

As of 20th February 2024, the process for the removal of an overseas entity remains under development, however, if an overseas entity has fully disposed of all UK property and land, you should note that:

i. Companies House must be ADVISED of the disposal and provided with the Overseas Entity ID.

ii. An ‘Update Statement’ will not need to be submitted.

As part of the removal process, the Registrar is also required to check with the three UK Land Registries that the overseas entity has disposed of all property within the UK before processing such an application. The Land Registry is currently working to develop a system to allow these checks to take place in an efficient manner.