Based on the announcement of the UK Government, and as per the new Economic Crime (Transparency and Enforcement) Act. 2022 https://www.gov.uk/guidance/register-an-overseas-entity#what-the-register-of-overseas-entities-is overseas entities holding or intending to buy real estate in the UK must register on the Register of Overseas Entities (ROE) which is maintained by the Companies House, the ultimate beneficial owner or managing or director.
The new legislation has the following important features:
Overseas entities already own property in the UK and acquired the property
· after January 1st 1999 in England and Wales,
· after December 8th 2014 in Scotland, or
· after September 5th 2022 in Northern Ireland
will have 6 months to comply and registration must be completed by 31st of January 2023.
If the entity does not comply it cannot transact with its UK property on or after 1 February 2023 until it is registered in the ROE and heavy penalties will be incurred being £2,500 per day
Each Entity needs to provide specific information including details about beneficial owner/s and managing officers. Information that should be provided for each beneficial owner is the following and will be required to be verified.
· Name, date of birthday and nationality
· Residential address
· Date they became beneficial owner/s
· Confirmation that the entity has complied with its obligations
A beneficial owner is any individual or entity that has significant influence or control over the overseas entity. It can be:
· an individual person
· another legal entity, such as a company
· a government or public authority
· a trustee of a trust
· a member of a firm that is not a legal person under its governing law
You must register any beneficial owner that meets one or more of the following conditions known as the 'natures of control'.
The beneficial owner is an individual person, other legal entity, government or public authority and:
· holds, directly or indirectly, more than 25% of the shares in the entity
· holds, directly or indirectly, more than 25% of the voting rights in the entity
· holds the right, directly or indirectly, to appoint or remove a majority of the board of directors of the entity
· has the right to exercise, or actually exercises, significant influence or control over the entity
The beneficial owner is a trustee of a trust and:
· the trustees of that trust (in their capacity as such) hold, directly or indirectly, more than 25% of the shares in the entity
· the trustees of that trust (in their capacity as such) hold, directly or indirectly, more than 25% of the voting rights in the entity
· the trustees of that trust (in their capacity as such) hold the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company
· the trustees of that trust (in their capacity as such) have the right to exercise, or actually exercise, significant influence or control over the company
It is highlighted that only some of the information registered on the Register of Overseas Entities ROE is accessible to the public, some information about beneficial owners is exempt from inspection.