The UK government has introduced a Register of Overseas Entities as part of its strategy to combat economic crime, while ensuring legitimate businesses continue to see the UK as a great place to invest. We explain what the register is and what real estate owners need to do if they are affected by the legislation.
The Register of Overseas Entities (ROE) came into force in the UK on 1 August 2022 through the new Economic Crime Transparency and Enforcement Act 2022 (the "Act").
ROE requires that all overseas entities register real estate ownership with Companies House, including a declaration of the beneficial owners or managing officers of real estate by 31 January 2023. Once entered onto the Register, records will need to be updated annually.
An overseas entity is described by the UK Government as '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 of the UK.' For the purposes of the ROE, The Republic of Ireland is considered an overseas jurisdiction.
Prior to the introduction of the Act, only UK companies were required to disclose their owners on a public register. As many other jurisdictions do not have a similar register, it was more difficult to establish an organisation's beneficiaries and controlling parties and subsequently to monitor suspicious activity.
Although described as a public record, due to the UK's Data Protection Laws, Companies House will collect personal data of the beneficial owners but will not show any personal details on public records. Personal details such as full date of birth, residential addresses and email addresses will not be made public but need to be provided.
The Act is applicable to all overseas entities who have purchased property or land on or after:
- 1 January 1999 in England and Wales
- 8 December 2014 in Scotland
To avoid non-disclosure by way of a sale, the Act also applies retrospectively to properties or land sold in the UK on or after the 28 February 2022.
Consequences of non-compliance with the Act can include fines of up to £2,500 a day or up to 5 years' imprisonment. It will also impose restrictions when buying, selling, transferring, leasing or charging property or land.
Overseas entities in scope need to provide information on both the entity itself and its ultimate beneficial owners. If no beneficial owner can be determined, information on the entity's managing director must be provided. In situations where a foreign trust holds UK real estate, the trustee(s) of that trust is a registrable beneficial owner and information about the trust must also be provided. For a detailed description of the information required please refer to the UK government guidance.
How TMF Group can help
TMF Group acts as a regulated agent for the completion of ROE filings with the Companies House. A UK regulated agent must complete verification checks on all beneficial owners and managing officers of an overseas entity before it can be registered. As a global administrator of entities in more than 85 jurisdictions we have the knowledge and expertise to support our clients in efficiently gathering and verifying the requested information and seamlessly completing initial and ongoing filings.
If your entity falls under the new legislation, we can assist with all necessary verifications and submissions in line with the new legislation. Talk to your usual TMF Group contact for more details or use the button below to get in touch.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.