Author
Efosa Obaseki
Efosa Obaseki
The Economic Crime (Transparency & Enforcement) Act 2022
Registration of Overseas Entities – (OE)
Published 29 August 2022
The Economic Crime (Transparency & Enforcement) Act 2022 requires overseas entities that own or acquire property in the UK to register with Companies House. The register of Overseas Entities came into force in the UK on 01 August 2022. The Act does not allow any application being made to HM Land Registry to register an overseas entity as a proprietor of land in the UK to be approved, unless at the time of their application, the overseas entity has obtained its OE ID. The Land Registry must reject all land registration applications if an OE ID is required but not provided by the applicant.
Upon completion of registration with Companies House, the details of the overseas entity and its beneficial owners will be available to the public on the online register. Although most overseas entities who own land in the UK are not breaking the law, greater transparency will allow law enforcement agencies to investigate suspicious wealth more effectively.
Once registered, the Overseas Entity will get a unique overseas entity ID. When you buy, sell, transfer, lease or charge property or land in the UK, you’ll need to give this to:
• HM Land Registry – for property or land in England and Wales
• Land Registers Northern Ireland – for property or land in Northern Ireland
• Registers of Scotland – for property or land in Scotland.
An Overseas Entity – is a legal entity, such as a company or other organisation, that has legal personality and is governed by the law of a country or territory outside the UK. The Republic of Ireland is an overseas jurisdiction for the Register of Overseas Entities.
A Beneficial Owner – is any individual or entity that has significant influence or control over the overseas entity. It can be: an individual person another legal entity, such as a company a government or public authority a trustee of a trust a member of a firm that is not a legal person under its governing law.
You’ll need to provide information about the overseas entity, any registrable beneficial owners, and the UK-regulated agent that carried out verification checks. You may also need to provide information about managing officers.
Registration Process: It is quicker and easier to ask a UK-regulated agent to register and file the information required. UK-regulated agents include accountants and legal professionals supervised under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017.
What is needed for verification checks: A UK-regulated agent must complete verification checks on all beneficial owners and managing officers of an overseas entity before it can be registered. It will need to provide an agent assurance code and an overseas entity verification checks statement to confirm that it has done this. They must be based in the UK and supervised under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. They can be an individual or a corporate entity, such as a financial institution or legal professional.
Before registering, an agent will also need to check and confirm the OE identity—even if the OE decide to personally file the information a regulated agent must still verify the OE identity. Verification checks must be completed no more than 3 months before the overseas entity is registered. The OE or the agent will need to:
• sign in to or create a Companies House account
• give a name and email address of someone the Company House can contact about the application
• give information about the overseas entity and its beneficial owners or managing officers – :
name country it was formed in registered office address.
• give the assurance code of the agent who checked your identity
• If the entity has disposed of UK property or land since 28 February 2022, it will also need to tell the Company House: the deed or title number of the land or property the date that the land or property was disposed of details of any additional beneficial owners or managing officers at the time the land or property was disposed of
• pay the £100 registration fee with a credit or debit card If there are no beneficial owners, you’ll need to provide information about the overseas entity’s managing officers. A managing officer is a director, manager, or company secretary of the overseas entity.
Post Registration: The OE will be registered If the application is accepted, the overseas entity and its beneficial owners and managing officers will be added to the Register of Overseas Entities. The Companies House will also email the notice of registration to the overseas entity. This will include the Overseas Entity ID, which must be given to the Land Registry whenever the entity buys, sells or transfers land or property in the UK. If the application is rejected, the Company House will inform the OE, refund the £100 registration fee and advice on what to do next.
The primary objective of this new legislation is to crack down on money laundering that involves UK property by making it harder to hide behind shell companies and easier to seize properties that have been bought with dirty money, also anonymous foreign owners must reveal their identities. Solicitors have an obligation to conduct extensive due diligence checks for each of these overseas clients who wish to acquire an overseas property. Anti-Money
Laundering (AML) precautions require solicitors to do background checks and investigate the client’s source of wealth.
The Economic Crime (Transparency & Enforcement) Act 2022 requires overseas entities that own or acquire property in the UK to register with Companies House. The register of Overseas Entities came into force in the UK on 01 August 2022. The Act does not allow any application being made to HM Land Registry to register an overseas entity as a proprietor of land in the UK to be approved, unless at the time of their application, the overseas entity has obtained its OE ID. The Land Registry must reject all land registration applications if an OE ID is required but not provided by the applicant.