The new UK Register of Overseas Entities is now live

The Register of Overseas Entities (the Register), which was first announced in March 2016 as part of the UK’s measures towards transparency and anti-corruption, came into force in the UK on 1 August 2022 through the new Economic Crime (Transparency and Enforcement) Act 2022 (the Act).

Companies House holds the new Register in the UK and requires overseas entities that own, or wish to acquire, certain real estate in the UK to declare and keep up-to date information relating to their beneficial owner(s) and/or managing officer(s) on an annual basis.

Severe financial penalties and restrictions on buying, selling, transferring, leasing, or charging their land or property in the UK will apply to those who do not comply with reporting obligations.

Who is affected?

Overseas entities (legal entities governed by the law of a country or territory outside the UK which, under those same laws, have separate legal personalities) which:

• acquire, sell, transfer, or take a lease (of more than seven years) of UK land after 1 August 2022. They must register with Companies House to obtain an overseas entities number and declare their registrable beneficial owner(s), or managing officer(s), if there is no registrable beneficial owner;
• own or lease land or property in the UK. They must register with Companies House and declare who their registrable beneficial owner(s) or managing officer(s) are by 31 January 2023; or
• dispose of property or land after 28 February 2022. They must give details of those dispositions and provide their beneficial ownership information by 31 January 2023.

Who is a “registrable beneficial owner”?

A beneficial owner is any individual or entity that has significant influence or control over the overseas entity; it can be a natural person, a legal entity, or a government, or public authority.

Any beneficial owner that meets one or more of the following conditions known as the "natures of control", should be registered:

• holds, directly or indirectly, more than 25 per cent of the shares in the entity;
• holds, directly or indirectly, more than 25 per cent of the voting rights in the entity;
• holds the right, directly or indirectly, to appoint or remove a majority of the board of directors of the entity;
• has the right to exercise, or actually exercises, significant influence or control over the entity; or
• meets any of the above conditions and is a trustee of a trust, or a member of a partnership (or other entity that is not a legal person) and is able to exercise “significant influence or control” over the activities of the trust or entity.

What information is required?

Overseas entities will need to provide information about the entity (name, country of incorporation, service address, etc) and their registrable beneficial owner(s) (name, date of birth, nationality, usual residential address, and address for service). They also need to provide information in relation to their managing officer(s) if there is no registrable beneficial owner and information about trusts where the trustee of a trust is a registrable beneficial owner.

Except where it is possible to apply for an exemption, most of the information given to Companies House will become publicly available on the Register.

The implications of non-compliance

Overseas entities, which do not register by the deadline, will face daily fines. Both the entity and its officers will potentially have committed a criminal offence, which may result in financial penalties and/or imprisonment.

In addition, overseas entities will not be able to buy, sell, charge, transfer, or let (a lease of more than seven years) land in the UK unless they have registered with Companies House.

How we can help you

The Register was established quickly and its requirements have only recently been published. We are looking at how we can assist clients to meet their obligations and will be in touch shortly with options. In the meantime, do not hesitate to reach out to us, or your usual contact, for guidance on making your application to Companies House.