How will the Register of Overseas Entities affect you?

From 5 September 2022, any overseas entity that intends to register UK land or real estate with HM Land Registry will need to register its ultimate beneficial owners and directors first. Here, Rupert Gerald, commercial director, UK, and Phil Sabatino, commercial director, UK, provide insight on how to be best positioned to deal with the new rules.

Any overseas entity that owns land or property in the UK is now required to register the details of registrable beneficial owners and managing officers.

Failure to comply with the Companies House Register of Overseas Entities (ROE) could mean fines of up to £2,500 a day or as much as five years in prison.

For many of our real estate clients, this new piece of legislation presents an administrative burden that could easily overwhelm their in-house teams or delay urgent work.

In addition, checks must be completed by a UK-regulated agent – so in-house teams are not able to fulfil the verification piece independently.

Who falls within the scope of ROE?

Overseas entities who want to buy, sell or transfer property or land in the UK – including those who already own or lease the same in the UK – will fall within the scope of the new requirements.

This applies to overseas entities who bought property or land on or after 1 January 1999 in England and Wales. It also targets overseas entities that have disposed of property or land since 28 February 2022.

Details of such dispositions will need to be supplied and recorded to avoid penalties.

What are the timelines of the ROE?

The changes came into effect on 1 August 2022 through the new Economic Crime (Transparency and Enforcement) Act 2022.

Overseas entities and their ultimate beneficial owners (UBOs) have a relatively short grace period and must register the mandatory data with Companies House by 1 February 2023. The new requirements will impose restrictions on buying, selling, transferring, leasing or charging their property or land in the UK if they do not register by the deadline.

Overseas entities that wish to transact after 5 September 2022 will be required to register with Companies House and obtain an Overseas Entity ID (OE ID) number before making an application to the relevant Land Registry office – so time is of the essence for some.

Can you self-certify your data?

Another crucial requirement of the new rules is that know your customer (KYC) information is verified and filed by a UK-regulated agent.

The agent must be based in the UK and supervised under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017.

Intertrust UK has been provided UK-regulated agent status by UK Companies House, allowing us to support our clients in compliance with this important new regulation.

If you are a client and already have an Intertrust UK independent board member on your overseas entity, then the relevant people might have already been made aware of these new requirements – giving you a head start in meeting deadlines.

We can provide your entity and relevant team members with guidance on the types of information to be submitted.

Overseas entity information to be reported on the register includes:

• The country in which it was formed
• Registered office address and correspondence address
• Email address to send important information including the Overseas Entity ID
• Legal form and governing law
• Public register on which it appears and registration number if it has one

Information to be provided on the registrable beneficial owner includes:

• Name, date of birth and nationality
• Usual residential address
• Service address
• The date on which the individual became a registrable beneficial owner in relation to the entity
• Why they are deemed the owner

Why Intertrust Group?

Regulatory requirements in managing portfolios of legal entities are becoming increasingly complex, as demonstrated by the introduction of ROE.

We can help you to navigate the regulatory landscape, guiding you to comply with applicable local rules and regulations.

Additional services that we can offer in relevant jurisdictions are:

• Company formation
• Domiciliation and management
• SPV and legal administration services
• Payroll services
• Accounting and reporting
• Executive compensation services
• Global corporate secretarial services
• Regulatory and compliance services