Foreign company with UK Property

The United Kingdom Launches a Public Register of Beneficial owners and controllers

The Register of Overseas Entities, created under the Economic Crime (Transparency and Enforcement) Act 2022 was launched on 1st August 2022. The Act intends to introduce a mandatory register of overseas entities that hold real estate in the United Kingdom to be maintained by the Companies House. The UK Government in describing the rational for new legislation stated that the new register “will require anonymous foreign owners of UK property to reveal their real identities to ensure Criminals cannot hide behind secretive chains of shell companies, setting a global standard for transparency.”

The Act requires that Overseas entities holding real estate in the United Kingdom since January 1999 in English and Wales and since December 2014 in Scotland will have to register by 31 January 2023. For property held prior to January 1999 registration will be required to enable a transfer of title to take place.

Failure to comply with the registration will result in sanctions such as restrictions being placed on the title that will prohibit that entity from selling, leasing or mortgaging the land and/or criminal sanctions for the entity and its officers, with daily fines of up to £ 2,500 and prison sentences of up to five years.

Review of existing overseas entity property structures should be prioritized to ensure that the reporting obligations of the entity is met.