It has been almost a year since the launch of the Register of Overseas Entities, a significant initiative in the government’s strategy to combat global economic crime. This register plays a pivotal role by requiring overseas entities that own property or land in the UK to disclose their beneficial owners or managing officers. Unregistered overseas entities are prohibited from engaging in transactions involving UK land, such as buying, selling, transferring, leasing, or raising charges, until they have registered with Companies House.
Recently, the implementation of the Register of Overseas Entities was acknowledged with an international award from the Corporate Registers Forum (CRF). The judges described the introduction of the register as a
“true display of agile innovation,”
creating a proud moment for the entire team at Companies House.
Progress Made So Far
Since its launch on August 1, 2022, the register has seen significant progress. Thousands of registrations have been processed, and continuous improvements have been made to the service based on user feedback and legislative updates.
To date, the register boasts more than 28,000 entities, and the information within it has been accessed over 500,000 times. The availability of free access to the register’s data through the Find and Update Company Information service, along with its advanced search functionality, demonstrates its success in increasing transparency regarding property and land ownership in the UK.
The Next Phase: Developing the Update Statement Service
Moving forward, the Register of Overseas Entities is entering the next phase of development. This phase involves the creation of a digital service for filing update statements and the upcoming enforcement of financial penalties against entities that have failed to register.
The Importance of the Update Statement
An essential requirement for all entities on the register is the submission of an annual update statement, regardless of whether any changes have occurred. To ensure compliance, entities have been notified about this obligation through their registration confirmation emails. Additionally, email reminders will be sent to the email addresses associated with each entity’s record.
Non-compliance with the update statement filing requirement is a criminal offense and may result in prosecution or financial penalties. Failure to file the update statement within the specified timeframe will render an entity’s Overseas Entity ID invalid. The ID can only regain validity once the entity brings its record up to date and submits the required update statement.
Entities that miss the filing deadline will be unable to engage in activities such as buying, selling, transferring, leasing, or raising charges against property or land in the UK.
Filing the Update Statement
To streamline the filing process, entities and their representatives will have the convenience of submitting the update statement online. However, in cases involving trusts associated with overseas entities, including trusts already disclosed and those requiring disclosure as part of the update statement, a paper form will be made available in the coming weeks.
To ensure authorised access, entities will need to request an authentication code before filing their update statements.
If any changes have occurred since the entity’s initial registration, a UK-regulated agent must conduct verification checks to confirm the accuracy of the updated information. However, if no changes have taken place, additional verification is not required.
Starting from early August, entities will be able to submit their update statements online.
In the near future, financial penalties will be imposed on entities that have failed to register with the Register of Overseas Entities. Detailed guidance on the approach to financial penalties and other enforcement measures can be found on GOV.UK.
Entities that have not registered with Companies House already face restrictions on activities such as selling, transferring, leasing, or raising charges against their property or land. Moreover, these entities are prohibited from acquiring new property or land in the UK without an Overseas Entity ID.
Companies House eagerly anticipates the implementation of these critical next steps for the Register of Overseas Entities. Further updates will be communicated through the organisation’s various channels.
Ref: Companies House
If you would like to discuss the Register of Overseas Entities and how it will impact your business, please get in touch with me, Stuart Hinds, or your usual Ecovis contact.