In just under four month’s time the deadline for the new registration requirement imposed on overseas entities who want to buy, sell or transfer property or land in the UK will expire.
The registration requirement came into force on 1 August 2022 by virtue of the Economic Crime (Transparency and Enforcement) Act 2022 (ECTEA 2022). ECTEA 2022 makes it a criminal offence if an overseas entity:
- holds a qualifying freehold or leasehold land and became the registered proprietor on or after 1 January 1999 but before 1 August 2022; and
- is not registered on the Register Of Overseas Entities by 31 January 2023.
If an overseas entity does not comply with the ECTEA 2022, it could be fined up to £2,500 per day and/or a prison sentence of up to 5 years may be apply. Any non-compliant overseas entity will also face restrictions when buying, selling, transferring, leasing or charging property or land in the UK in the future.
The aim of the Register of Overseas Entities is to ensure more transparency and will allow law enforcement agencies to investigate suspicious wealth more effectively.
What is an “overseas entity”
An “overseas entity” is a legal entity, such as a company or other organisation, that has legal personality and is governed by the law of a country or territory outside the UK.
What do you have to do?
It will be necessary to provide Companies House, through the correct portal information concerning the overseas entity and details of its beneficial owners.
Overseas Entity details. It will be necessary to provide the following information concerning the overseas entity:
- its name
- the country it was formed in
- its registered office address
- its correspondence address
- a contact email address
- its legal form
- its governing law
- the public register it appears on
- its registration number
Beneficial Owner details: individuals. It will be necessary to provide the following information concerning individuals who are beneficial owners:
- their full name
- their date of birth
- their nationality
- their correspondence address
- their home address
- the date they became a beneficial owner for the overseas entity
- the nature of control
- whether they are on the UK Sanctions List
Beneficial Owner details: other legal entity. It will be necessary to provide the following information concerning other legal entities who are beneficial owners:
- its name
- its registered office address
- its correspondence address
- its legal form
- its governing law
- the public register it appears on
- its registration number
- the date they became a beneficial owner for the overseas entity
- the nature of control
- whether they are on the UK Sanctions List
The are other types of beneficial owner and these are set out below.
What is a Beneficial Owner
A beneficial owner is any individual or entity that has significant influence or control over the overseas entity. It can be:
- an individual person
- another legal entity, such as a company
- a government or public authority
- a trustee of a trust
- a member of a firm that is not a legal person under its governing law
There are various “natures of control” that also apply and ECTEA 2022 sets these out in more detail.
What happens after registration
After registering, the overseas entity will get a unique Overseas Entity ID. This Overseas Entity ID must be given to the Land Registry when it buys, sells, transfers, leases or charges UK property or land. Without it the Land Registry will refuse to process the transfer of the UK property or land.
Disposal of property after 28 February 2022
Please note as an additional requirement that any overseas entities that have disposed of property or land after 28 February 2022 will also need to register and give details of that disposal.
How to register your overseas entity with the Register of Overseas Entities
If you would like help registering your overseas entity or if you have any queries concerning your obligation to register, please contact Michael Kashis or Umair Uddin in the Corporate & Commercial team or call on 020 7631 4141 and ask for a member of the team.
The above is accurate as at 04 October 2022. The information above may be subject to change during these ever-changing times.
The content of this note should not be considered legal advice and each matter should be considered on a case-by-case basis.
