On 14th March 2022, the Economic Crime (Transparency and Enforcement) Act became law.

The Act introduced new provisions relating to sanctions, Unexplained Wealth Orders and the Registration of Overseas Entities. It is the latter which we will focus on in this article.

What are the new rules?

The Act creates a requirement for an “overseas entity” to register at Companies House and provide details of its “registerable beneficial owners”, where it either:

  • Owns UK Real Estate purchased in England & Wales on or after 1st January 1999, or in Scotland on or after 8th December 2014; or
  • purchases UK Real Estate.

For entities that already own UK Real Estate which was purchased on or after the dates above, the requirement to register at Companies House must be executed within 6 months of the register of overseas coming into force. The register was launched by Companies House on 1st August 2022, giving a registration deadline of 31st January 2023.

For purchases after the 1 August 2022, in order to register title to land an overseas entity will have to demonstrate it is registered and must comply with the duty to update information. The land registration elements of the Act came into force on 5th September 2022 for such new purchases and also for sales from that date, which means that overseas entities which engage in a relevant land transaction after 5 September 2022 will need comply with the requirement to register with Companies House and obtain an Overseas Entity ID number before that transaction may go ahead.

Once registered, the overseas entity will be given a unique identification number and the entity will be required to update the information held by Companies House on an annual basis, until such time as it successfully applies to be removed from the live Register of Overseas Entities (“ROE”).

An Overseas Entity can apply for removal from the register when it ceases to hold an interest in UK Real Estate.

Companies House levy a registration fee of £100 per entity, which must be paid at the time of registration.

What is an Overseas Entity?

An overseas entity is defined as being a legal entity that is governed by the law of a country or territory outside the United Kingdom. This can include a body corporate, partnership or other entity that is a legal person under the law by which it is governed.

Who are Registerable Beneficial Owners?

It is the Beneficial Owners of the Overseas Entity which are registrable.  Surprisingly, this can be different to the beneficial owners of the actual land or property, particularly where corporate nominee arrangements are in place. 

A registerable beneficial owner will almost always be an individual at the “top” of at ownership structure who:

  • holds, directly or indirectly, more than 25% of the shares in the overseas entity; or
  • holds, directly or indirectly, more than 25% of the voting rights in the overseas entity; or
  • has the right, directly or indirectly, to appoint or remove a majority of the board of directors of the overseas entity; or
  • has the right to exercise, or actually exercises, significant influence or control over the overseas entity; or
  • is able to exercise significant influence or control over the activities of a trust, partnership, unincorporated association or entity that is not a legal person, and the trustees of that trust or members of that other entity meet one or more of the conditions ; and
  • is not exempt from being registered

The wording, “directly or indirectly”, means it is necessary to trace the ultimate beneficial owners of an overseas entity up through the chain of ownership.

However, an exemption applies in respect of any beneficial owner holding an indirect interest through a legal entity which is subject to its own disclosure requirements. These disclosure requirements could be under these provisions, or, in the case of a UK company, one which is required to maintain a register of ‘Persons with Significant Control' (“PSC”).

The result of this exemption is that where there is a UK incorporated company within the structure which is subject to the PSC regime, there is no obligation to identify its beneficial owners for the purpose of the ROE. This exemption does not affect any requirement for the underlying overseas entity to register.


The registration requirements for structures including Trusts are somewhat more complex, and there is also a crossover with the requirements for Trusts to be registered with HM Revenue & Customs under the Trust Registration Service.

Where a Trust directly holds UK Real Estate, a requirement for registration under the ROE will only exist where there is a non-UK incorporated corporate trustee. In this circumstance, that corporate trustee will need to be registered on the ROE and declare any beneficial owners who meet the ownership conditions outlined above. This aligns with draft legislation released by the government in June 2022, which includes any legal entity registered outside the UK which provides regulated ‘trust services', as a legal entity subject to its own disclosure requirements.

Where a Trust owns a non-UK company, which owns UK Real Estate, that company will be required to be included on the ROE (as above), and the Trust will be the registerable beneficial owner. The company will need to provide information in relation to the Trust, including its name, the settlement date, name of the settlor, details of the current and previous trustees, and details of all beneficiaries as part of its registration. Importantly, however, any information provided in respect of a Trust as a result of the trustees being registerable beneficial owners will not be available for public inspection.

What is the Impact of a failure to Register or maintain the Register?

Non-compliance with the Act may lead to:

  • restrictions on the title registers of UK Real Estate owned by overseas entities, preventing the sale or leasing of the property, and making obtaining mortgages difficult
  • criminal sanctions for non-compliance and delivering misleading, false or deceptive information. These sanctions include fines of up to £500 per day or a prison sentence of up to 5 years

How can Verfides help?

Note that registration can only be completed (and ongoing Registry compliance can only be maintained by) a UK regulated agent such as Verfides.

We would be delighted to assist with:

  • Identifying a need to register (including which beneficial ownership information needs to be provided)
  • Completing the registration, and the annual confirmation thereafter
  • Removal from the register

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.