Register of Overseas Entities – Time to take action now
Since the introduction of the Economic Crime (Transparency and Enforcement) Act 2022 earlier this year, we have been waiting for signs of when the new Register of Overseas Entities would be introduced.
The government have announced that the new register of overseas entities (ROE) will come into force at 9am on 01 August 2022.
As criminal offences may be committed for non-compliance with the requirement for overseas entities to register certain details (including those of the beneficial owners) to Companies House, it is time to take action now.
Below we explain what has changed, who you need to identify, what information is required to enable you to register and how we can help you.
What has changed since the enactment of the Economic Crime (Transparency and Enforcement) Act 2022?
The three new statutory instruments have been introduced:
- The Register of Overseas Entities (VPI) Regs 2022
- The Land Registration (Amendment) Rules 2022
- The Register of Overseas Entities (Delivery, Protection and Trust Services) Regulations 2022
In essence, an overseas entity will need to gather evidence and information required under the 2022 Act and forward this to an independent verification officer in the UK. The verification officer will then submit an application to Companies House to add the relevant entity to the register which will generate a unique Overseas Entity ID code.
Who needs to register?
The beneficial owner of any overseas entity (being a corporate body, partnership or other legal person) governed by the laws of a country or territory outside of the United Kingdom that owns, leases or disposes of qualifying real estate.
For the purposes of the Economic Crime (Transparency and Enforcement) Act 2022 a beneficial owner could be:
| Individual | Legal Entity Body Corporate | Government/Public body and others |
| A person (“X”) is a “beneficial owner” of an overseas entity or other legal entity (“Y”) if one or more of the following conditions are met (within Part 2 Sch 2): | In addition to items 1 to 4 in the last column, a legal entity is a registerable beneficial owner if it is subject to its own disclosure requirements. Part 3 Sch 2 lists these as: | A government or public authority is a “registrable beneficial owner” in relation to an overseas entity in all cases where it is a beneficial owner of the entity and: |
| 1. X holds, directly or indirectly, more than 25% of the voting rights in Y 2. X holds the right, directly or indirectly, to appoint or remove a majority of the board of directors of Y 3. X has the right to exercise, or actually exercises, significant influence or control over Y 4. Trusts: (a) the trustees of a trust, or the members of a partnership, unincorporated association or other entity, that is not a legal person under the law by which it is governed meet any of the conditions specified above (in their capacity as such) in relation to Y, and (b) X has the right to exercise, or actually exercises, significant influence or control over the activities of that trust or entity. | a) Part 21A of the Companies Act 2006 applies to it (whether by virtue of section 790B of that Act or another enactment that extends the application of that Part), b) it is a company to which section 790C(7)(b) of that Act applies (companies with voting shares traded on UK or EU regulated markets), c) it is of a description specified in regulations under section 790B(1)(b) or 790C(7)(d) of that Act (or under either of those sections as extended), d) it is an eligible Scottish partnership within the meaning of regulation 3 of the Scottish Partnerships (Register of People with Significant Control) Regulations 2017 (S.I. 2017/694), e) it is registered in the register of overseas entities under this Part of this Act, or f) it is of a description specified by the Secretary of State in regulations under this paragraph | Is a beneficial owner within Part 2 Sch 2 (see the first column). Trusts In respect of any registerable beneficial owner who is a trustee information will need to be provided about the trust itself. |
| Is not exempt from registration pursuant to Part 4 of Sch 2 deals with a limited number of exemptions. | Is not exempt from registration: See first column. | |
| (Part 5 of Sch 2 provides further supplementary provisions for the interpretation of Schedule 2). |
What are the timelines from when the register goes live?
- Overseas entities who already own qualifying property in the UK (excluding Northern Ireland where different rules apply) acquired at any time on or after 1 January 1999 will have 6 months from the date the register becomes live to register with Companies House.
- Overseas entities acquiring freehold property or a lease granted for 7 years or more in the UK will be required to register with Companies House as soon as the register becomes live.
- Overseas entities that have disposed of qualifying property (by sale of a freehold or the grant or assignment of a lease with 7 or more years in term or the grant of a legal charge) between 28 February 2022 and 6 months from the date the register goes live.
What information is required before registration can take place at Companies House?
Schedule 1 of the Economic Crime (Transparency and Enforcement) Act 2022 sets out the required information needed in order to register the beneficial interest at Companies House as per the below table:
| Individual (being those who meet the thresholds for control or ownership as above) | Legal Entity body corporate | Government/Public body and others |
| (a) Name, date of birth and nationality; (b) usual residential address; (c) a service address; (d )the date on which the individual became a registrable beneficial owner in relation to the overseas entity; (e) which of the conditions in paragraph 6 of Schedule 2 is met in relation to the registrable beneficial owner (see the table above) (f) whether the individual meets that condition by virtue of being a trustee; (g) whether the individual is a designated person (persons so named by Ministers or under UN Security Council Resolutions within the meaning of section 9(2) of the Sanctions and Anti-Money Laundering Act 2018), where that information is publicly available. | (a) Name; (b) country of incorporation or formation; (c) registered or principal office; (d) a service address; (e) an email address; (f) the legal form of the entity and the law by which it is governed; (g) any public register in which it is entered and, if applicable, its registration number in that register (in the country in which the overseas entity was incorporated or formed). And also: (h) the date on which the entity became a registrable beneficial owner in relation to the overseas entity; (i) which of the conditions in paragraph 6 of Schedule 2 is met in relation to the registrable beneficial owner and a statement as to why that condition is met; (j) whether the entity meets that condition by virtue of being a trustee; and (k) whether the entity is a designated person (persons so named by Ministers or under UN Security Council Resolutions within the meaning of section 9(2) of the Sanctions and Anti-Money Laundering Act 2018), where that information is publicly available. | (a) Name; (b) principal office; (c) a service address; (d) its legal form and the law by which it is governed; (e) the date on which the entity became a registrable beneficial owner in relation to the overseas entity; (f) which of the conditions in paragraph 6 of Schedule 2 is met in relation to the registrable beneficial owner and a statement as to why that condition is met; and (g) whether the entity is a designated person (within the meaning of section 9(2) of the Sanctions and Anti-Money Laundering Act 2018), where that information is publicly available. Trusts (a) The name of the trust or, if it does not have a name, a description by which it may be identified; (b) the date on which the trust was created; (c) in relation to each person who has at any time been a registrable beneficial owner in relation to the overseas entity by virtue of being a trustee of the trust— (i) the person’s name, (ii) the date on which the person became a registrable beneficial owner in that capacity, and (iii) if relevant, the date on which the person ceased to be a registrable beneficial owner in that capacity; (d) in relation to each beneficiary under the trust, the information that would be required for individuals or other legal entities if the beneficiary were a registrable beneficial owner in relation to the overseas entity; (e) in relation to each settlor or grantor, the information that would be required for individuals or other legal entities if the settlor or grantor were a registrable beneficial owner in relation to the overseas entity; (f) in relation to any person who, under the terms of the trust, has rights in respect of (a) the appointment or removal of trustees, or (b) the exercise by the trustees of their functions: (i) the information that would be required for individuals or other legal entities if the interested person were a registrable beneficial owner in relation to the overseas entity, and (ii) the date on which the person became an interested person. |
| Dispositions (within the meaning given in section 41 (4) of the 2022 Act) between 28 February 2022 and 6 months after the register becomes live? In addition to the above Section 41 of the 2022 Act must be complied which includes the delivery of the following information: a) the date of disposition, and b) the registered title number of the qualifying estate; c) the date of delivery of the deed, d) the title number of the title sheet in which the entity’s interest is entered. | Dispositions (within the meaning given in section 41 (4) of the 2022 Act) between 28 February 2022 and 6 months after the register becomes live? The same information as with individuals is required here. | Dispositions (within the meaning given in section 41 (4) of the 2022 Act) between 28 February 2022 and 6 months after the register becomes live? The same information as with individuals is required here. |
An overseas entity may give an information notice to any person that it knows, or has reasonable cause to believe, is a registrable beneficial owner in relation to the entity.
The notice will require the person to whom it is given to state whether or not they are a registerable beneficial owner (and then provide the information above). The overseas entity may also give a person an information notice if it knows or has reasonable cause to believe that the person knows the identity of a person who is a registrable beneficial owner in relation to the overseas entity, any other beneficial owner in relation to the overseas entity, a person likely to have knowledge of the identity of a person falling into either of the first two categories.
It is an offence for the person served either notice not to; respond or to give false or make reckless statements. The person, subject to a summary conviction may face subsequent imprisonment.
The Secretary of State also has powers to require an overseas entity to apply for registration within a period of 6 months of the date of the notice. Again, sanctions apply for non-compliance.
In addition to the above, the overseas entity must also deliver one of the following three statements regarding its registerable beneficial owner and provide the relevant evidence to back up the statement as follows:
| Statement | Further Information Required | |
| 1 | (a) That the entity has identified one or more registrable beneficial owners and that it has no reasonable cause to believe there are others and (b) that the entity is able to provide the required information about each registrable beneficial owner it has identified. | 1. The required information about the entity (see above table). 2. The required information about each registrable beneficial owner that the entity has identified. |
| 2 | A statement that the entity has no reasonable cause to believe that it has any registrable beneficial owners. | 1. The required information about the entity (as above). 2. The required information about each managing officer (see below) of the entity. |
| 3 | (a) That the entity has reasonable cause to believe that there is at least one registrable beneficial owner that it has not identified, (b) that the entity is not able to provide the required information about one or more of the registrable beneficial owners it has identified, or (c) that paragraphs (a) and (b) both apply. | 1. The required information about the entity (as above). 2. The required information about each managing officer (see below) of the entity. 3. The required information about each registrable beneficial owner that the entity has identified or so much of that information as it has been able to obtain. |
| Trusts: Where an entity discloses that a registrable beneficial owner is a trustee then the application must also include: | (a) The required information about the trust or so much of that information as the overseas entity has been able to obtain, and (b) a statement as to whether the entity has any reasonable cause to believe that there is required information about the trust that it has not been able to obtain; and (c) trust beneficiaries also need to be disclosed, together with their names, dates of birth, nationality, residential address and service address (if a legal entity other than an individual). |
If either statement 2 or 3 above applies, then further information is required as to the “managing officer” (a director, manager, secretary). Part 4 of Sch 1 of the 2022 Act requires the additional following information to be provided in relation to the managing officer:
| Individuals | Non-individuals (including public bodies) |
| (a) Name, date of birth and nationality; (b) any former name (unless changed aged 16 or below or greater than 20 years ago); (c) usual residential address; (d) a service address (which may be stated as the entity’s registered or principal office); (e) business occupation (if any); and (f) a description of the officer’s roles and responsibilities in relation to the entity. | (a) Name; (b) registered or principal office; (c) a service address; (d) the legal form of the entity and the law by which it is governed; (e) any public register in which it is entered and, if applicable, its registration number in that register; (f) a description of the officer’s roles and responsibilities in relation to the entity; and (g) the name and contact details of an individual who may be contacted about the managing officer. |
Who submits the information and how?
The register will be a digital service with information to be submitted in English.
Before any application for first registration or later updating applications/rectifications and amendments can take place, the information above will be subject to formal verification by a relevant person (being one falling within section 3 and 8 of The Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017). Broadly, a relevant person will include an independent legal professional, financial institutions, auditors, estate agents, auction platforms etc.
Once the information has been verified the relevant person will need to confirm to the Companies House Registrar that it has completed verification in accordance with the new Act and regulations and provide a statement complying with Part 2 (5) of The Register of Overseas Entities (VPI) Regulations 2022. If the relevant entity has made no relevant dispositions between 28 February 2022 and the date the application is made, the application must state this.
The information itself is to be retained by the relevant person for a period of 5 years.
What happens once registration is accepted?
Companies House will then publish the identity on a public register and assign a unique Overseas Entity ID. The name of the relevant entity and their agent will be available to the public on the Companies House website. The Overseas Entity ID will be required by the Land Registry before it registers any dealings with real estate in England & Wales.
The 2022 Act requires registered entities to update their information annually.
Secondary legislation allows individuals to be able to protect some of their information from public disclosure in limited circumstances (if it can be shown an individual or the people they reside with will be at serious risk of violence or intimidation).
Failure to comply with registration and/or within the time limits imposed?
In England and Wales a person guilty of an offence is liable on summary conviction to a daily fine of up to £2,500 or unlimited fines and a prison sentence of up to 5 years. Failure to register will also prevent any dealings with the real estate in question.
What can we do to help you?
We appreciate the above information is a bit of a mine-field especially as we are expecting further amendments to the legislation in the next few weeks.
We can keep you up to date of the latest developments, assist and advise you on your obligations and aid in collecting the required information. If you require, we can also verify the required information for you and make the application for registration to Companies House and communicate the unique Overseas Entity ID number to you as well as process annual returns.
Additional information
If you have any questions and/or would like advice on the UK public register of beneficial ownership of overseas entities, please contact us at: hello@dixcartuk.com.
