New Register of Offshore Companies holding Property in the UK

The Economic Crime (Transparency and Enforcement) Act  (ECTEA) 2022 creates a register of “Overseas Entities”, which compels companies registered in foreign jurisdictions (including Jersey) to register with Companies House and provide certain information about themselves and their beneficial owners, if they currently own (or wish to own) or dispose of land in the UK. The intention is that much of this information will then be made publicly available to increase transparency.

Parts of the Act have now come into force and the immediate practical effects for Overseas Entities (OEs) are as follows:

  • From 1st August 2022, OEs who already own (and were registered pursuant to an application to Land Registry made on or after 1st January 1999), who wish to own or who disposed of (after 28th February 2022) property in the UK must register with Companies House and provide the required information, including details about their beneficial ownership (and disposal if that is the reason for registration). The deadline for registration is 31st January 2023. An OE ID (Overseas Entity Identification code) will be provided by Companies House upon completion of registration, which can then be submitted to Land Registry.
  • From 5th September 2022, Land Registry will not register a new acquisition without the OE ID and all registrations with be accompanied by the OE restriction.
  • From 1st February 2023, if the OE has not registered to comply with the Act, they could be fined up to £2,500 per day or  a prison sentence of up to 5 years. They will also face restrictions when buying or selling property in the UK, so these provisions must be taken seriously. Land Registry are intending to write to all OEs owning property in the UK to warn them of this in good time before the deadline.

If you deal with Overseas Entities, it is important to familiarise yourselves with the new legislation and procedures. DKLM will be able to assist with any queries you may have in relation to the implementation of the new rules, with further practical guidance as it becomes apparent how the new system will work. It will be important to monitor transactions where they involve another party who is an OE to ensure that the requirements are met and the transaction is registrable.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.