Register of Overseas Entities: Understanding Requirements and Best Practice Ahead of January 2023 Deadline

The new Companies House Register of Overseas Entities (ROE) requirements apply to a wide range of structures used to hold United Kingdom (UK) real estate, including partnerships, trusts and companies. Failure to comply could result in fines of up to £2,500 a day, or as much as five years in prison.

All required information forming the basis of the application for registration must be verified by an approved agent; only those who are UK-based and supervised under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 can conduct verification checks. JTC (UK) Limited has been approved by Companies House to act as an ROE Verification Agent (VA).

Here, Matthew Allen, Senior Director – Corporate Services, looks at the implications and timelines of the new legislation – the Economic Crime (Transparency and Enforcement) Act 2022 (ECTEA) and the burden on resources it may present.

The Basics

Any overseas entity intending to deal with qualifying estate (land or some leases) in the United Kingdom (UK) through HM Land Registry will need to first register, and declare its registrable beneficial owners (RBOs), or managing officers if there is no RBO, with Companies House.

The ROE launched 1 August 2022 and restrictions placed on title from HM Land Registry came into effect from 5 September 2022. The definition of an overseas entity includes companies and other organisations, which have legal personality and are governed by the law of a country, or territory outside the UK.

Who does this affect?

The ROE will affect all overseas entities looking to buy, sell or transfer property or land in the UK. This includes those with existing holdings, or those that have made dispositions after 28 February 2022. For England and Wales, the rules affect any property or land purchased on or after 1 January 1999, with the rules being applied in Scotland and Northern Ireland from 8 December 2014 and 1 August 2022 respectively.

However, it will have a particular impact on larger entities and their RBOs, as the grace period for registering with Companies House ends on 31 January 2023. This is a hard deadline – after this date, fines and criminal penalties can apply.

Any buying, selling, transferring, leasing or charging of property, or land in the UK will be subject to restrictions if not completed by this deadline. All purchases by overseas entities will now require registration with Companies House and the obtaining of an overseas entity ID number before making an application to the relevant Land Registry office to register the dealing. JTC (UK) Limited can assist by taking this administrative burden away and supporting organisations and groups.

Important dates for the diary

As previously mentioned, the ROE rules came into effect at the beginning of September 2022 and the deadline for mandatory registration is 31 January 2023.Other important dates refer to historic transactions.

How JTC (UK) Limited can help

The new rules make significant demands on the time and resources for organisations, with only a small window in which to make relevant submissions and declarations. JTC (UK) Limited can support clients in the following ways:

• Overseas entities must have an overseas entity ID so as to prevent any restrictions being placed on title by HM Land registry
• ROE applies to historic and current transactions based on country within the UK – England, Scotland, Wales and Northern Ireland
• Information provided to Companies House for overseas entities, RBOs and managing officers will be publicly available on the ROE
• Information must be independently verified by a UK-regulated VA prior to registration at Companies House – JTC (UK) Limited is a VA
• Annual confirmation statements must be filed following initial submission
• Window for registrations without penalty closes 31 January 2023

At JTC (UK) Limited, our role is to ensure that clients stay on top of increasingly complex rules and regulations.

As a VA approved by UK Companies House, JTC (UK) Limited is able help clients navigate their way through the Register of Overseas Entities framework.

JTC (UK) Limited can conduct the verification and initial registration of the overseas entity and ongoing updates / removals from the ROE where required. JTC (UK) Limited has developed a robust and secure process for the transfer and gathering of the required information, allowing them to perform verification checks and the registration of the overseas entity in an efficient manner.

To find out more about the obligations of the Register of Overseas Entities, get in touch with Matthew Allen.