UK: New Registration Requirements For Foreign Entities Holding Land In The UK: The New Register Of Overseas Entities Under The Economic Crime (Transparency And Enforcement) Act 2022 ("ECTEA")

The Economic Crime (Transparency and Enforcement) Act 2022, received royal assent in March 2022. The ECTEA aims to combat economic crime by introducing transparency around the ownership of overseas legal entities that hold registered title to land or property in the UK.

Although the primary legislation is now in force, the secondary legislation required to implement the new procedures is awaited. For more on timing, see When will you have to register? below.

Amongst other things, the ECTEA establishes a new Register of Overseas Entities (and their beneficial owners) to be kept at Companies House.

The register will be public and is intended to provide greater transparency as to who actually owns property and land in the UK.

It applies to:

• Any overseas entity with title to registered freehold or leasehold property in the UK acquired since 1 January 1999 in England or Wales, or since 8 December 2014 in Scotland;
• Any overseas entity wishing to purchase such UK land in any part of the UK; and
• Any overseas entity intending to dispose of such UK land, or which has disposed of such land since 28 February 2022.

There will be a transitional period of six months commencing on the date the new register is actually implemented, by the end of which overseas entities will have had to complete their registration.

There is currently no indication of when the new regime will commence; this will be determined under secondary legislation, which is awaited.

No, overseas entities will need to renew the statements in the register on an annual basis.

The folowing information will be required for the new register:

• details of the property involved;
• any registrable beneficial owners of the entity or confirmation that it has none. This concept is modelled on the existing regime governing people with significant control (PSC). n.b. a registrable beneficial owner is:
  • a person directly or indirectly holding 25% or more of the shares or voting rights of the overseas entity; or
  • a person who can affect or change the composition of the board of directors of the overseas entity; or
  • a person who otherwise has the right to exercise significant influence and control over it.
• where the registrable beneficial owner is a trustee (including arrangements outside the UK of a similar character to a trust), the information provided must include detail as to the identity and location of each beneficiary, settlor or grantor of the trust. This includes former trustees of a trust.

(a) Identify any property acquired since 1 January 1999 in England or Wales or 8 December 2014 in Scotland, or over which security has been granted, or for which a lease in excess of 7 years was granted;

(b) Check if that property is registered in the name of an overseas entity.

(c) If yes, identify any "beneficial owners" of that overseas entity.

(d) Check finance documents: given the scope of the legislation, lenders will wish to ensure that relevant finance documents entered into now include obligations on borrowers and other obligors to comply with their obligations under the ECTEA.

(e) Speak to the company secretary of the relevant entity or your company secretarial service to help identify your “beneficial owners” in readiness for the new Register of Overseas Entities going live.