The Register of Overseas Entities: what you need to know

What is the Register of Overseas Entities?

The Register of Overseas Entities came into force in the UK on 1 August 2022 through the Economic Crime (Transparency and Enforcement) Act 2022 - a move introduced to fight money laundering and economic crime.

The Act, which expands provisions concerning sanctions and financial crime, was accelerated and rapidly passed in response to events in Ukraine.

An overseas entity is a legal entity, for example, a company or other organisation, that is governed by the law of a country or territory outside the UK.

Key points:

• Overseas entities transacting with land or property in the UK must now register with Companies House and identify their beneficial owners or managing officers.
   
• The new regulations also apply retrospectively to overseas entities who bought land or property on or after 1 January 1999 in England and Wales.
   
• Entities that disposed of land or property after 28 February 2022 must also register with Companies House and give details of that disposal.
   
• After registering, the overseas entity will be issued an Overseas Entity ID to give to the UK Land Registry when it leases, buys, sells, transfers, or charges property or land in the UK.

The verification process explained

Overseas entities cannot verify themselves - they must have their details verified by a UK-regulated agent. There are three key parties involved in registration:

1. The beneficial owner (or owners)
2. The corporate structure or entity
3. The agent

Before making a register application, an overseas entity must take reasonable steps to identify its beneficial owners or, where there are no beneficial owners, its managing officers.

The beneficial owner can be challenging to identify because the rules for determining beneficial owners are based on the rules around people with significant control.

Before the overseas entity can apply to the Register of Overseas Entities, the information must be verified by a UK-regulated agent, which takes time. 

A list of UK-regulated agents who can complete verification checks is available here.

What evidence needs to be provided?

UK-regulated agents use different processes based on legal requirements. Typically, this includes passports, recent utility bills and signed statements, ideally from a qualified solicitor in the relevant jurisdiction. 

It is important to note that when a trust ultimately owns the overseas entity, the volume of information required increases significantly. 

The entity needs to provide details of all the trustees since the trust was established, as well as each beneficiary and others who may have control over the trustees.

What happens if an overseas entity fails to register?

If an entity does not comply, you could be fined, receive a prison sentence or both. Without an overseas entity ID, the entity cannot register a change of interest at the relevant land registry - prohibiting it from buying or selling property or land in the UK. 

Registered overseas entities are required to update the information held at Companies House at least annually.

Contact our corporate solicitors 

Please get in touch with us if you have any questions or concerns regarding corporate law or need further help with any of the above.

Our clients include individuals, start-ups, SMEs, and corporations with international reach - from property firms and professional services to manufacturers and online retailers.

We have solicitors in London, Brighton, Eastbourne, Hastings, Uckfield, and Ulverston, and we work with clients locally and nationally.