The register of overseas entities
As part of the government’s continued endeavours to prevent economic crime and encourage investment in the UK by legitimate businesses, a new Register of Overseas Entities has been established as of 1 August 2022, which is held at Companies House. Overseas entities wishing to transact in UK real estate will need to register with Companies House and advise as to its beneficial owners and / or managing officers.
The intended purpose behind the register includes being able to provide more information to law enforcement as to those using property as a way of laundering criminal proceeds and to create greater transparency as to overseas owners and controllers in order to prevent criminals being able to hide behind a string of shell companies.
This new register will maintain a record of overseas entities that hold real estate in the UK and require such entities to make a declaration as to their beneficial owners and / or managing officers. An overseas entity is a legal entity governed by the laws of a country which is not the UK.
Prior to the registration of an overseas entity, a UK-regulated agent (who must be supervised under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, such as a legal professional) must verify its beneficial owners and managing officers. The agent will need to provide:
- an agent assurance code (these can now be applied for); and
- an overseas entity verification checks statement confirming completion of the checks.
Failure to comply with the requirements could result in restrictions on transactions by overseas entities, relating to their UK property.