The new Economic Crime (Transparency and Enforcement) Bill was passed by Parliament in March 2022 and the new Register of Overseas entities is enforced and and held by UK Companies House. This is to ensure that the disclosure requirements for both UK entities and overseas entities are at the same level. This new act leads to more transparency which aids the UK Government in identifying those using UK property as a money laundering vehicle.

Who needs to register and who will this apply to?

The new register requires any Overseas Entity (like a foreign company) that owns UK land/UK property, either commercial or residential, to declare its beneficial owners or managing officers. Overseas entities will not be able to buy, sell, transfer, lease or create charge against land in the UK unless they have been registered with Companies House.

1. Overseas Entity - Any Company or similar legal entity that is governed by the law of a country outside the UK.

2. Beneficial owners - Individuals who have significant influence or control over a legal entity, i.e. 25% or more shareholding or voting rights is held

How does it work?

An overseas entity is required to identify its beneficial owners and to register them with Companies House, along with verifying certain documentation and information.

The registrar will publish it on the Register of Overseas Entities. Once registered, a unique overseas entity ID number will be provided, and the overseas entity is required to update its information annually.

Will you need to do anything?

Yes, you need to register information about your overseas entity and any beneficial owners by 31 January 2023 via a designated website at Companies House.

What will happen if the overseas entity doesn’t comply?

The legislation carries significant penalties for non-compliance.

The managing officer can face criminal sanctions, including fines of up to UK£500 per day or a prison sentence of up to 5 years for failing to register or entering a transaction without first registering the overseas entity on the new register. It is also a criminal offense to deliver false or misleading information to Companies House.

Failure to complete this new registration by the due date will trigger restrictions when buying, selling, transferring, leasing, or charging property or land in the UK.

Summary

If you, a director of an non-UK entity, would like assistance in setting up account with Companies House for this new disclosure requirement or have plans to sell or buy UK property in the future, please speak with us at tax@zetland.biz via email or at 5808 0180 via phone if you need our assistance.