The Register of Overseas Entities (ROE)

What is the Register of Overseas Entities?

The Government has sought for many years to create a public register to keep record of all overseas individuals who own UK Property. Whilst this has been on the Government's agenda for a while, the legislation has been slow to follow. However, the Russian invasion of Ukraine has seen this plan come to fruition at an accelerated pace.

The new Register of Overseas Entities which came into effect on 1^st August 2022 seeks to accurately record anyone who owns, or is the tenant of, a long lease of property in the UK.

Provisions relating to the registration of such came into force on the 5^th September 2022.

Information regarding all beneficial owner(s) must now be disclosed to Companies House and these records updated annually. In the event that the overseas entities are unable to provide information regarding the beneficial owner(s), details of their directors/managing officers should be provided instead.

The ROE's primary aim is to control any potential money laundering activity by overseas entities by increasing transparency of UK property ownership by overseas entities.

The Definition of an Overseas Entity

Section 2 of The Economic Crime (Transparency and Enforcement) Act 2022 defines an overseas entity as a legal entity that is governed by the law of a country or territory outside the United Kingdom.

The Act applies to all non-UK incorporated companies, LLP's as well as any foreign foundations and non-UK partnerships.

The General Rules

The general rules under the Act are as follows:-

• Relevant Property - Relevant property for the purpose of the Act is UK property which is to be registered, or a long lease granted for more than a term of 7 years, that has been or will be registered at HM Land Registry from 1 January 1999 (England and Wales), 8^th December 2014 (Scotland), or 5^th September 2022 (Northern Ireland).

• Existing owners - Where an already existing overseas entity owns UK property and/or land, they must now register in the ROE. The deadline for disclosing of such transactions between 28 February 2022 and 31 January 2023 is 31 January 2023.
• Disposals - if between the dates of 28 February 2022 and 31 January 2023 relevant property is disposed of by an overseas entity, this must be disclosed to the ROE.

• Acquisitions – from the 5^th September 2022, all new acquisitions, whether buying or taking long lease for a term of more than 7 years of UK property, must be registered in the ROE ahead of completion

The Application

The application must be submitted digitally and must include any information relating to any registrable beneficial owners, if applicable. If there are no beneficial owners, details of all managing officers must be provided.

Notice must be made to each beneficial owner one month prior to making the application. This is to allow sufficient time for any information to be amended, if so required. The beneficial owner is then to confirm / amend the information prior to the submission to Companies House.

The information comprised within the application must also be verified by a person acting in the course of business carried on by that business in the U.K. It is currently unclear as to whether law firms are able to offer such a service, as further guidance from the Law Society is yet to be released.

Once the above has been adhered to, Companies House will process each application for a fee of £100.00. Upon completion of such registration, a unique identity number will be provided to the overseas entity via email.

It is for the overseas entity to comply with their duties under the Act, unless expressly agreed between client and solicitor, whereby the submission can be made by the agents on behalf of the overseas entity. However, the Law Society in their statement have advised that this is to be done ‘with diligence and caution’ as delivering false or deceptive information to Companies House is deemed a criminal offence.

Failure to comply

Failure to register, or to demonstrate a pending application for registration, will constitute a criminal offence, both for the entity and its officers. Severe sanctions are put in place for such occasions – fines of up to £2,500 per day on the overseas entities and possible imprisonment of up to five years, or both.

HM Land Registry is obliged to enter a restriction on the title register of the overseas entity preventing the overseas entity from transferring the property, granting a lease for a term of more than 7 years or granting a legal charge over the property unless it becomes registered at Companies House.

Any submitted registrations of property to HM Land Registry will be unable to complete if the overseas entity is not registered in the ROE from the 5^th September 2022.

It is therefore imperative that any transactions that fall under these new regulations, are to be registered with the ROE and a unique identity number provided by Companies House. As mentioned above, failure to do so will result in the transaction being unable to complete until full registration takes place.

Contact us

To discuss Commercial Property issues, please either use the contact form on this page, email us at info@ramsdens.co.uk or call us on 01484 821 500 to speak to a member of our team.