The Register of Overseas Entities: what you need to know

Back in March 2022, the Economic Crime (Transparency and Enforcement) Bill passed into law. Under the Act, Companies House would create a Register of Overseas Entities. The Register makes it much harder for criminals to use land and property in the UK to launder money. It requires anonymous foreign owners to register their real identities, ending the practice of hiding behind anonymous chains of shell companies. The register came into effect on 1 August 2022.

Who does the Register affect?

Foreign owners of UK properties now need to register. The measures apply to:

1. Companies or other legal entities that are governed by the law of another country or entity (i.e. an overseas entity)
2. Individuals who hold more than 25% of the shares or voting rights (i.e. beneficial owners)

In brief, overseas entities have to identify their beneficial owner(s) and register their details with Companies House. This information will need to be verified. As accountants, THP can help with this process. Once registered, Companies House will issue an overseas entity ID number and the entity will need to update its information annually.

Is the Register of Overseas Entities retrospective?

Yes, it is retrospective. It applies to property bought in England and Wales since January 1999 and in Scotland since December 2014. In Northern Ireland, it applies to all land bought since the Act came into force. Overseas entities also have to register if they have disposed of any UK land since 28th February 2022.

How long do entities have to register?

The register came into effect on 1 August 2022. Overseas entities that currently own UK land should have provided details of their beneficial owners or managing officers within 6 months of that date – 31 January 2023. Details of managing officers can only be provided when an overseas entity has no registrable beneficial owner.

What happens if an overseas entity doesn’t comply?

Non-compliance will result in financial sanctions. These will include fines of up to £500 per day or a prison sentence of up to 5 years. Restrictions will also be placed on the ability to sell or lease land.

Are there any Register of Overseas Entities exemptions?

There are very few exemptions. The Secretary of State for Business, Energy and Industrial Strategy can exempt a person in these circumstances:

• In the interests of national security
• In the interest of the UK’s economic wellbeing
• For the purposes of detecting or preventing serious crime.

What happens next?

If you were required to register and have not, best do so as soon as possible to avoid financial penalties. If you need any assistance, please get in touch with one of our accountants.