Reed Smith News Flashes

Following our earlier alert on the Economic Crime (Transparency and Enforcement) Act (the ‘Act’). Companies House now expects to launch the new Register of Overseas Entities introduced by the Act (the ‘Register’) on 1 August 2022. Clients need to prepare themselves for this new regime.

Authors: Daniel Kyriakides Siobhan Hayes Dashni M. Khimji

Overseas entities that own or wish to acquire land in the UK will have to register information about that overseas entity with Companies House, including disclosing information about the ultimate beneficial owners of that entity. Real estate transactions will be adversely affected if they do not comply with the registration requirements under the Act and there are both criminal and financial penalties for breach.

The launch of the Register

The Register, intended to be launched on Monday 1 August 2022, will be a digital service hosted by Companies House. Information to be contained on the Register will need to be verified in advance (see below).

Overseas entities wanting to buy land in the UK completing on or after 5 September 2022 should prioritise their preparations for registration. From that date the first changes to real estate transactions come into force. Applications to register title for any overseas entity will be rejected by HM Land Registry where the entity is not on the Register by the date of the application. Time will be needed for the entity to check its beneficial owners and get its information verified and then submitted for registration on the Register.

Overseas entities that already own land in the UK will be given a six-month transition period to register their details but if they have not done so by 28 February 2023 their own ability to deal with their land will be adversely affected and they will be at risk of committing criminal offences and being sanctioned by financial penalties.