On 1 August 2022 the Economic Crime (Transparency and Enforcement) Act 2022 (ECTEA) came into force implementing register of overseas entities maintained by Companies House (Register). The intention underpinning the creation of the Register is to prevent and combat the use of land in the UK for money laundering purposes and to increase transparency and public trust in overseas entities that own land in the UK.
With effect from 5 September 2022, overseas entities that own, or wish to acquire or dispose of freehold land or leasehold land for a term of more than 7 years in England and Wales, must apply for registration on the Register in order to register title to, or carry out a registrable disposition of, such land in England and Wales. The registration will also be required for the overseas entities which acquired land in England and Wales before 1 August 2022.
The deadline to apply for the registration is 31 January 2023.
Failure to comply with these requirements is a criminal offense punishable by fine of up to £2,500 per day or imprisonment for a period up to 5 years. Additionally, any transactions with land in the UK will be able to proceed only after the registration.
The registration procedure requires, in particular, to identify:
– the beneficial owners of the overseas entities that own UK land; and
– transactions with UK land that took place after 28 February 2022
and prepare, verify and submit to the Companies House the information about the overseas entity, its beneficial owners, managing officers and the transactions with land.
Identifying Registrable Beneficial Owners
Before an overseas entity can apply to register on the Register it is required to take reasonable steps to identify its registrable beneficial owners, i.e. a person who: –
- directly or indirectly holds in the overseas entity more than 25% of:
- the issued shares, capital or profits; and (or)
- voting rights;
- directly or indirectly holds the right to appoint or remove a majority of the board of directors of the overseas entity; and (or)
- exercises or has the right to exercise significant influence or control over the overseas entity.
There will be a £100 registration fee payable to the Companies House.
The following information is required to apply for the registration:
- Overseas entity
- Country of incorporation
- Registered or principal office
- Service address
- Email address
- Legal form
- Governing law
- Any public register on which it is entered; and
- Registration number.
- Registrable beneficial owners
- The date on which they became a registrable beneficial owner
- Which of the above conditions is met in relation to them
- Statement of why that condition is met
- Whether the person is a designated person under UK Sanctions and Anti-Money Laundering Act 2018;
- Date of birth
- Usual residential address and a service address
- Managing officers
- The officer’s roles and responsibilities in relation to the entity
- Date of birth
- Usual residential address and service address
- Business occupation (if any)
- Disposition of UK Land
- If the overseas entity disposed of land in the UK after 28 February 2022 which it had acquired on or after 1 January 1999, additional information that includes, in particular, the date of the disposition and the registered title number
Verification of information
To apply for the registration, the information about registrable beneficial owners and managing officers of an overseas entity must be verified by a UK-based credit or financial institution, auditor, insolvency practitioner, external accountant or tax adviser, independent legal professional, trust or company service provider, estate agent or letting agent before the entity applies for registration (UK-regulated Agent).
The UK-regulated agent will need to obtain from the Companies House the agent assurance code and use it to authenticate the verification statement when the overseas entity is being registered. Companies House cannot register an overseas entity without that code.
The information to be verified by the UK-regulated agent is wide and includes, for example, which of the conditions of beneficial ownership is met in relation to a beneficial owner and why.
The verification will be valid for three months beginning with the day on which it is verified.
The UK-regulated agent must deliver a statement to Companies House confirming:
- That it has undertaken the verification of the relevant information.
- That the verification has complied with the requirements of the regulations and the ECTEA.
- The date on which the verification was undertaken.
- The names of the registrable beneficial owners and, if relevant, the managing officers whose identity has been verified, but where it has not been possible to obtain full names, so much of that information as it has been possible to obtain.
- The UK-regulated Agent’s service address, email address, supervisory authority, and registration number with the supervisory authority; and
- The name of the individual with overall responsibility for identity checks (if different to the UK-regulated Agent).
Registration and allocation of overseas entity ID
On registration of an overseas entity, Companies House will:
- Record the date of registration in the Register.
- Allocate an overseas entity ID to the entity and record that ID in the Register.
- Notify the overseas entity that it has been registered, confirming the date of registration and the overseas entity ID allocated to it.
The overseas entity ID will need to be given to the Land Registry whenever the entity buys, sells or transfers land or property in the UK.
How Consulco Can Help?
Consulco can assist you to prepare all required documents and register your overseas entity with the Companies House.