New register of overseas entities
The world changed when Russia invaded Ukraine and at the end of February, the government introduced the Economic Crime (Transparency and Enforcement) Bill. As part of the legislation, a new Register of Overseas Entities (ROE) was created by Companies House.
Companies House said that implementing this new, world-leading register has been their top corporate priority for 2022-23 and they have worked at pace with the UK’s 3 land registries to deliver it.
Simply, the ROE will provide information for law enforcement agencies to help them to track down criminals using UK property as a money laundering vehicle.
What is the purpose of the Register of Overseas Entities?
Companies House want to ensure that anonymous foreign owners of UK property reveal their identity, to prevent criminals from hiding behind shell companies and using UK property as a means to launder money or for other crime.
What are the requirements?
Basically any overseas entity which is has an interest in land or property in the UK will be affected.
Overseas entities who want to buy, sell or transfer property or land or property in the UK, must register with Companies House and tell them who their registrable beneficial owners or managing officers are.
What about entities who already own land or property?
Overseas entities who already own or lease land or property in the UK will also need to register with Companies House and tell then who their registrable beneficial owners or managing officers are by 31 January 2023.
This applies to overseas entities who bought property or land on or after:
- 1 January 1999 in England and Wales
- 8 December 2014 in Scotland
Overseas entities only need to register property or land bought in Northern Ireland on or after 1 August 2022.
Disposals of property or land after 28 February 2022
Entities that disposed of property or land after 28 February 2022 will also need to give Companies House details of those dispositions.
What are the possible sanctions for non-compliance?
For the first time Companies House will know who owns these properties and land, and they’ll have enforcement powers to place sanctions on anyone who doesn’t comply.
The sanctions for non-compliance can be severe, including restrictions on buying, selling, transferring, leasing or charging land or property in the UK, daily fines of up to £2,500 and even prison sentences.
What to do if you think you might be affected?
The ROE became live on 1 August 2022 with the anticipation that it would have an immediate effect to deter those who might intend to buy UK property with illicit funds.
Before an overseas entity can be registered with Companies House, a UK-regulated agent must complete verification checks on all beneficial owners and managing officers. The agent must be based in the UK and supervised under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. There’s guidance on the government website about how to find an agent.
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The information was correct at time of publishing but may now be out of date.