It has now been a year since as a result of the Economic Crime (Transparency and Enforcement) Act 2022 (“ECA”) the new Register of Overseas Entities (“ROE”) was launched at Companies House on 1 August 2022.
The ROE contains details about overseas entities who own UK property and it was introduced as a measure to increase transparency in the ownership of overseas entities that own UK land. As of 1 February 2023, the registration at Companies House has been a compulsory requirement and failure to register as a ROE with Companies House is a criminal offence.
For the purposes of the ECA, an “overseas entity” is a company or other entity such as a partnership or trust that has a legal personality under its governing law and is governed by non-UK law. Overseas entities that hold UK property, which are registered at the Land Registry, are required to register as a ROE on a separate Register maintained by Companies House. You can read some of our earlier commentary on this topic here and here.
ROE UK property
As a result, an overseas entity that holds property in the UK (e.g. by way of a freehold interest or a leasehold interest of over seven years) before 31 January 2023 which is not registered as a ROE, will not be able to transact with their land or property including, buying, selling, transferring, leasing or borrowing due to the standard form restrictions placed on the Land Registry titles for all properties held by overseas entities.
Whilst the majority of overseas entities delayed registration as a ROE until the compulsory 1 February 2023 deadline, those ROEs that registered on or after 1 August 2022 have or will be approaching 12 months from the date of their initial registration, which will trigger a 14-day period within which they are required to renew their registration.
Take note of the ROE renewal
It is important to note that this renewal must take place annually and it is not an automatic process. The ROE will be required to take the necessary steps to provide and verify the information required by Companies House, regardless of whether there have been any changes to the beneficial owners of the ROE. The renewal should be straightforward in most cases, however in order to avoid any difficulties which the process could cause to pending transactions, the renewal process should be started well in advance of the 12-month period.
Register of overseas entities renewal
Failure to comply with the deadline, will mean that the ROE status will become void and ineffective and the overseas entity will not be able to buy, sell, transfer, lease or borrow money for UK property until such time that the required information is delivered to Companies House and financial and/or criminal implications will apply.
It will be for each ROE to take steps to complete the renewal process, however if you need legal advice on the potential impact of the ECA on any pending property transactions or on any real estate matters, contact our specialist property lawyers.