Register of Overseas Entities - the Practicalities

Having been trailed since 2016, the Register of Overseas Entities (ROE) finally arrived on 1 August 2022. Sparked into action by the events in Ukraine, the Economic Crime (Transparency and Enforcement) Act 2022 was rushed through Parliament at break-neck speed. As well as dealing with sanctions and unexplained wealth orders, the Act introduced the ROE to improve transparency of who owns property in the UK, all with a view to combatting illicit money laundering by overseas entities. But what does it mean in day-to-day terms for those dealing with the property interests affected?

What is the ROE?

The ROE is operated by Companies House. It will hold information about overseas companies and other types of legal entity formed in countries and territories outside the UK which hold property in the UK. Generally speaking, this will mean that overseas entities who own or are the tenant in a long lease of property in the UK will have to register in the ROE. Long leases in Scotland are granted for more than 20 years, and in England and Wales for more than 7 years.

The ROE will also hold details of any beneficial owners of the overseas entity and, if there are no beneficial owners or if details of all beneficial owners cannot be confirmed, details of the managing officers of the overseas entity. Overseas individuals who own or lease property in the UK do not have to register in the ROE.

When is the ROE relevant?

For ROE purposes, the relevant property held by an overseas entity is UK property where the title or lease has been or will be registered in the Land Registry in England or Wales from 1 January 1999 or in the Land Register in Scotland from 8 December 2014.

• Existing owners/tenants: if an overseas entity owns or holds a long lease of relevant property, the overseas entity must register in the ROE;
• Disposals: if between 28 February 2022 and 31 January 2023, an overseas entity disposed or disposes of relevant property, this must be disclosed to the ROE even if the entity no longer owns or leases relevant property in the UK; and
• Acquisitions: if an overseas entity wants to buy or take a long lease of any UK property, they must first register in the ROE.
  
  

What are the key dates for the ROE?

There are two key dates:

1. 31 January 2023 - If they are not acquiring new UK property, the deadline for existing overseas owners and tenants of relevant property and those who must disclose transactions between 28 February 2022 and 31 January 2023, is 31 January 2023.
2. 5 September 2022 - For overseas entities looking to acquire new UK property, from 5 September 2022 they will have to register in the ROE before they can complete their acquisition by registration in the Land Register of Scotland or Land Registry.
   
   

What must be done to register in the ROE?

Information about the overseas entity and its beneficial owners or, if applicable, its managing officers must be collated and verified before an overseas entity can apply to register in the ROE.

The term beneficial owner is defined in some detail in the Act and is similar to, but not exactly the same as, the definition of persons with significant control in the PSC regime. If there are no beneficial owners, or if details of all beneficial owners cannot be provided, details of the managing officers of the entity must be submitted.

Once the information has been gathered and prior to making the ROE application to Companies House:

1. the overseas entity must provide an information notice to each of its beneficial owners, who must be allowed up to one month to confirm or correct the information; and
2. beneficial owners (and/or managing officers) must be verified by a UK regulated agent which is supervised for Anti Money Laundering purposes and has a Companies House agent assurance code.

The ROE application must then be submitted to Companies House.

What does Companies House do with the ROE application?

Companies House processes applications for registration in the ROE in exchange for a registration fee of £100. When registration is completed, Companies House will issue a unique identifier number for the overseas entity. This will allow the overseas entity to transact with UK property, provided they continue to submit verified annual returns to the ROE either confirming the information remains the same or updating it with any changes.

What happens if the overseas entity does not register in the ROE?

Failure to comply with certain ROE rules will constitute a criminal offence, punishable by fines on the overseas entity and its officers and possible imprisonment.

Also, those overseas entities who have not registered in the ROE will be unable to register (from 5 September 2022) the freehold/ heritable or leasehold title to any UK property that they acquire and (after 31 January 2023) any charge or transfer deed or long lease granted by them will not be accepted for registration in the Land Registry or the Land Register of Scotland. Failure to register in the ROE will likely result in the overseas entity being in breach of contract and in potential buyers, sellers, landlords, tenants and funders at best being very reluctant and at worst refusing to transact with an overseas entity if their transaction cannot be completed by registration in the property registers.

What should overseas entities do now?

Overseas entities should ask themselves:

• Do they own, or hold a long lease of, UK property where their title or lease was registered in England or Wales from 1 January 1999 or in Scotland from 8 December 2014?
• Since 28 February 2022, have they granted or will they before 1 February 2023 grant a disposition/transfer, long lease, assignation/assignment of long lease or a charge/standard security in respect of relevant property?
• Are they intending to acquire a new title or long lease of property in the UK?

If the answer is yes to any of the above, the overseas entity should gather the relevant information for the overseas entity itself and its beneficial owners and/or, if appropriate, managing officers and start the process for registering in the ROE.

This is a short overview and summary of the Register of Overseas Entities. For more detail see our FAQs below. 

Please note that this summary and our FAQs should not be relied on as legal advice in specific circumstances.