The Register of Overseas Entities – What you need to know - An update

Companies House has recently confirmed that it intends to open the Register of Overseas Entities on 1 August 2022.

Following the introduction of the Economic Crime (Transparency and Enforcement) Act 2022, overseas entities that acquired property in England and Wales on or after 1 January 1999 or that acquire it in the future must apply for registration on the Register of Overseas Entities once the Register goes live. Where overseas entities intend to deal with land holdings, it is imperative that this application is made quickly. If not, overseas entities will effectively find themselves unable to deal with land because the Land Registry will refuse to register a wide range of property transactions involving overseas entities if they are not registered on the Register. Even where overseas entities have no immediate intention of dealing with land, the Act obliges overseas entities to apply to join the Register of Overseas Entities within 6 months of commencement of the Act (anticipated 1 August 2022). There are severe sanctions for those who do not comply. Similar provisions apply in Scotland.

The new Register will require overseas entities to declare their beneficial owners and/or managing officers. Companies House has now confirmed that before an overseas entity registers its beneficial owners or managing officers on the new Register, a UK-supervised ‘relevant person’ will need to verify the required information about them. These verification checks must be carried out by a UK-based agent that is supervised under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. These include:

• credit institutions
• financial institutions
• auditors, insolvency practitioners, external accountants and tax advisers
• independent legal professionals
• trust or company service providers
• estate agents and letting agents

Companies House advise that it will be quicker and easier for the supervised agent to register on the overseas entity’s behalf. Apparently, the registration may take longer to process if the overseas entity completes the registration themselves.

For more detail on exactly what the Act means for overseas entities, see our report from March 2022 when the Act was introduced. For a broader view, see Clyde & Co’s ‘Crisis in Ukraine’ hub which offers insights into the impact of the crisis in Ukraine and focuses on the implications of sanctions, flight bans and many of the other direct and indirect consequences of the conflict.