As a leading corporate services provider our goal is to help clients and our professional intermediary partners set up, grow and responsibly maintain their legal entities by doing what we do best: reducing risk and enhancing efficiency.
As your service provider it’s our duty to ensure you stay on top of increasingly complex rules and regulations. As an approved Verifying Agent by UK Companies House we are ready to guide you through the Register of Overseas Entities Regulation.
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What is the Register of Overseas Entities and what does it mean for your entities?
The Register of Overseas Entities regime (“ROE”) came into force in the UK on 1 August 2022 through the Economic Crime (Transparency and Enforcement) Act 2022, as part of the UK Government’s response to combat the use of land in the UK for criminal purposes, and to increase transparency and public trust in overseas entities owning land in the UK.
ROE requires that if an overseas entity, being a legal entity (such as a company or other organisation that has legal personality) governed by the law of a country or territory outside the UK owns or plans to own UK property that constitutes a “qualifying estate”, to provide information about itself and its beneficial owners to the UK Companies Registrar. If an overseas entity concludes that it has no registrable beneficial owners, it must instead supply verifiable details about its managing officers.
The Register itself is held by Companies House in the UK.
In England and Wales, a “qualifying estate” is a freehold estate or a leasehold interest granted for more than seven years. Additionally, trustees, who are beneficial owners, must also disclose information about the trusts they represent.
Amendments to the Register of Overseas Entities
The Economic Crime and Corporate Transparency Act (ECCTA) which received Royal Assent on 23 October 2023, introduces several amendments to the Register of Overseas Entities regime. While a specific implementation timeline has not yet been announced, it is anticipated that the changes to the existing Register of Overseas Entities regime will take effect in the early part of 2024. With the new rules introduced by the ECCTA, overseas entities are now required to provide more detailed information about their property holdings, principal office address, and beneficial owners.
Expansion of Trust Information
The newly enacted legislation expands the scope of information that trusts must disclose when registering with the Register of Overseas Entities. The definition of a 'registrable beneficial owner' of an overseas entity has been broadened to include individuals or legal entities for whom an overseas entity holds qualifying UK property as a nominee. Complete information about all trusts and their trustees must be disclosed, even if the trustee holds indirect ownership of the overseas entity.
Overseas entities controlled by a corporate trustee must also comply with disclosure requirements, as private corporate trustees are now considered disclosable beneficial owners of overseas entities under the recently implemented legislation.
Title numbers
Overseas entities must now disclose the title numbers of all qualifying UK estates they own in England and Wales, and this information must be verified by a UK-regulated agent. Overseas entities that own property in NI and Scotland have similar obligations.
Principal Office
Overseas entities must provide details of their "principal office" rather than just their registered office. They must also update the information on the register to include details of their principal office, if this information has not already been provided.
Managing Officers Under 16
ECCTA now requires managing officers under the age of 16 to designate a contact person who is 16 or older and can be contacted about the managing officer.
Primary obligations and deadlines
There are three primary areas of obligation for relevant overseas entities, and important deadlines:
What are the implications of not meeting the obligations of the Register?
Penalties for not complying with the Register of Overseas Entities filing obligations include:
– Fines of up to £2,500 per day
– Or up to five years in prison
– Restrictions when buying, selling, transferring, leasing or charging property in the UK
How you can prepare
Our article further explains what organisations need to do in light of this regulation and suggested actions they need to take now.
