The Economic Crime (Transparency and Enforcement) Act 2022 (the Act) has introduced a new register at Companies House for all overseas entities which own land in the UK. Overseas entities will be required to register and obtain an Overseas Entity ID (OEID) to undertake any land transactions within the UK and the entity must update its information annually on Companies House.
What is an overseas entity?
An “overseas entity” is any legal entity that is governed by the law of a country or territory that is outside the United Kingdom, including the Channel Islands. It must have been incorporated outside of the UK.
Which overseas entities are affected by the Act?
Overseas entities are within the scope of the Act if they own land in the UK and have done so in:
- England and Wales on or since 1st January 1999
- Scotland on or since December 2014
- Northern Ireland on or since 5th September 2022
How will the Register of Overseas Entities affect land transactions?
The Act prevents any applications being made to register an overseas entity as the owner of land unless, at the time of the application, they have obtained an OEID by being part of the Register of Overseas Entities.
Any application received by the Land Registry without an OEID will be immediately rejected.
Any overseas entities that are currently registered as owners of land in the UK will have a restriction automatically added to their property registers after the 31st January 2023, preventing any transfer taking place without an OEID. Any new successful transfers to a registered overseas entity will also have the restriction automatically added to the property register on registration.
What steps should you take?
A transitional period of 6 months has been put in place from the 1st August 2022 to allow any overseas entities that already own land in the UK to register with Companies House without facing any financial or regulatory repercussions.
However, failure to comply with the registration requirements by 31 January 2023 will not only prohibit property dealings but also constitutes a criminal offence by the entity and its directors.
To discuss if and how you are affected by the requirements of the Act, please contact our Corporate Team.
(January 2023)