UK Register of Overseas Entities – Do You Still Need to Act?
It is now May 2023 and the deadline of 31 January 2023, for the registration of overseas entities with property interests in the UK, with Companies House has passed, with no announcement of any further extension. An estimated 13,000 relevant overseas entities had not registered by the deadline, approximately 40% of the total.
All overseas entities that do not register on the Register of Overseas Entities, can face a fine of up to £2,500 per day and potential criminal charges.
Unless the registration process has been dealt with and the information is up to date, it will now no longer be possible for Overseas Entities to buy, charge, sell or lease property (for more than seven years).
If you are involved in any property transaction involving a UK Overseas Entity, you need to take appropriate action now to make sure that any registrations are completed.
What is the Register of Oversea Entities (ROE)?
The ROE is operated by Companies House, and registers information relating to overseas entities who own/ ill own property or are tenants of leases (for a term of over 7 years). The information held on the ROE includes, most importantly, the beneficial owners of the overseas entity or in the absence of such, the managing officers.
In order to register on the ROE, the Overseas Entity (OE) must have their information verified by a UK regulated ‘relevant person’ (as defined in the Money Laundering Regulations), this person can be a solicitor, accountant, or registered agent. Once successfully registered, Companies House provide an Overseas Entity ID Number which will be used by the Land Registry in property dealings.
A closer look at the consequences of failing to register:
An overseas entity that fails to register with Companies House and provide the required information on its beneficial owners will not be registered as the legal owner and will, therefore, be unable to sell or lease the land, or create a charge over it (other than in limited circumstances).
The overseas entity and its officers will also be liable to civil and criminal penalties for failing to register. Such penalties include:
- daily fines
- prison sentences for managing officers.
- limits on the ability to deal with the land (see below).
How will non-compliance be policed at the Land Registry?
The Land Registry is obliged to enter a restriction on the title to any UK land where it is satisfied the registered proprietor is an overseas entity registered on or after 1 January 1999.
The restriction will broadly prohibit the registration of any:
- lease for a term of more than seven years from the date of the grant
- charge, unless the overseas entity has fulfilled its registration requirements or is exempt at the date of such disposition.
- An overseas entity purchasing UK land will be unable to be registered as proprietor of that land without demonstrating to the Land Registry that they have complied with the registration requirements (by producing an overseas entity ID).
It is now more important than ever, if you are involved in any property transaction involving a UK Overseas Entity, that you take appropriate action now, in order to avoid fines and/or potential criminal charges.
If you think you may need to register your overseas entity, please get in touch with the Dixcart office in the UK who will be able to assist you throughout the process: firstname.lastname@example.org