The Register of Overseas Entities: What It Means for Foreign Entities
On 1 August 2022 Companies House, introduced the ‘Register of Overseas Entities’ through the Economic Crime (Transparency and Enforcement) Act 2022. The aim of the Register is to boost transparency by requiring foreign companies which own property in the UK to publish details of their beneficial owners.
If you own property through a foreign (non-UK) entity, you MUST declare beneficial ownership on the Companies House register or face heavy fines, unless you are exempt. If this is you, read on…
Deadline for Registering: 31 January 2023
The Register of Overseas Entities: Frequently Asked Questions
What is the Register of Overseas Entities?
A register at Companies House where foreign owners of UK property must reveal their identity by 31 January 2023.
Overseas entities are foreign individuals, companies, trusts or partnerships.
What are Overseas Entities and Beneficial Owners?
Overseas Entities are legal entities that have a separate legal personality and are governed by non-UK law. These may be companies, trusts or even partnerships.
Beneficial Owners can be individuals, companies or trustees of a trust with:
- 25% or more shares or voting rights in the entity;
- the right to exercise significant influence or control over the entity; or
- have the right to appoint or remove a majority of the board of directors.
If no beneficial owners can be identified, information about the overseas entity’s managing officers such as director, manager or secretary, must be identified.
What about Property Transactions?
On acquisition of UK property, if an overseas entity does not register its beneficial owners with Companies House, then it will not be registered as the legal owner of that property unless an exemption applies.
This requirement comes into force on 5 September 2022. Likewise, no transfer, sale or charge of UK property will be validly registered unless the disposition is exempt.
What are the Consequences of Failing to Register?
Breaches for failing to register can have consequences for both the overseas entity and any officer associated. These can be £2,500 daily fines (for the entity and each officer concerned) for each day the overseas entity is not registered or up to 5 years in prison for the most serious breaches.
There are some exemptions from registering, including national security, interests of the economic wellbeing of the UK or preventing or detecting serious crime. Contact us if you require more information.
Don’t Get Caught Out
The consequences for breaching the Register of Overseas Entities are severe, both for the individual and any officer associated. Should you find yourself in need of help regarding this, speak to a member of our regulations team today.
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