We have previously written about the Register of Overseas Entities (ROE), introduced by the Economic Crime (Transparency and Enforcement) Act 2022 (ECTEA), which requires details of the beneficial ownership of all overseas entities which own or acquire UK land to be made available on the ROE. The ECTEA coupled with the Economic Crime and Corporate Transparency Act 2023 (ECCTA) are two key pieces of legislation passed with the aim of tackling economic crime and improving transparency of UK and overseas corporations and the individuals behind them.
 link to articles: Register of Overseas Entities - April 2022 (maplesteesdale.co.uk), The-Register-of-Overseas-Entities-–-key-points-for-lenders-Oct-2022.pdf (maplesteesdale.co.uk) and The-Register-of-Overseas-Entities-–-annual-update-July-2023.docx.pdf (maplesteesdale.co.uk)
Economic Crime (Transparency and Enforcement) Act 2022
The key aspects of the ECCTA, which received royal assent on 26 October 2023, are:
- Reforms to Companies House which will provide it with enhanced powers of investigation and enforcement.
- Updates to the information companies need to file at Companies House and the rules on maintaining statutory registers.
- Creating a new corporate offence of failing to prevent fraud.
- New identity verification regime for new and existing company directors, PSCs and those filing documents with Companies House.
- A ban on corporate directors.
- Updates to the Register of Overseas Entities - in this article we will focus on this final point.
Updates to the Register of Overseas Entities
The ECCTA has made a number of amendments to the ROE regime including, notably:
- Obligation to provide title numbers – overseas entities will need to provide a list of the title numbers of all UK land of which it is the registered proprietor. This could be a cumbersome and time-consuming exercise for an overseas entity to carry out if it holds many UK properties.
- Extension of who qualifies as a ‘registrable beneficial owner’ – where an overseas entity holds qualifying UK property as a nominee for another person, that other person (or if that other person is a legal entity, the beneficial owner of it) will qualify as a ‘registrable beneficial owner’ of the overseas entity and will need to be disclosed on the register. This will also apply retrospectively, meaning that any overseas entities that owned the UK property interest on 28 February 2022 will need to revisit their ownership structure.
- Obligation to provide principal office address information - overseas entities will need to provide details of their "principal office" rather than the registered office and update the information on the register to include details of their principal office, in cases where this information has not been provided to Companies House.
- New powers granted to Companies House – if the overseas entity fails to comply with a notice served by Companies House requiring the provision of further information to evidence compliance, Companies House will have the power to remove the overseas entity’s registered status. As a result, the overseas entity would no be able to make a disposition of UK land, such as granting a legal mortgage in favour of a lender.
The implementation timetable is not yet known; however, it is expected that the new implementing regulations will follow in early 2024. It is expected that these new requirements will form part of the annual updating process, rather than a ‘real time’ and pre-transaction update (which was dropped).
Overseas entities should be preparing now for these changes by collating details of their UK properties, checking that the details they have already provided to Companies House remain correct, and checking whether their corporate ownership structure is now going to be caught by the changes as to who will qualify as a ‘registrable beneficial owner’.