The Register of Overseas Entities (ROE) was launched by Companies House on 1st August 2022. Find out what this could mean for you and what we at CDS Mayfair can do to help.
The Register of Overseas Entities (ROE) came into force in the UK through the Economic Crime (Transparency and Enforcement) Act 2022. Companies House launched the ROE on 1 August 2022.
The ROE is intended to improve transparency, which will allow law enforcement agencies to investigate suspicious wealth more effectively.
Who does this apply to?
Overseas entities which currently own or propose to buy, sell or transfer property or land in the UK must register with Companies House and tell the Registrar who their registrable beneficial owners or managing officers are.
An “overseas entity” is generally any company or organisation (including a trust) that is governed by laws outside of the UK.
A “beneficial owner” is any individual or entity that has significant control over the overseas entity. It can be:
- an individual person
- another legal entity, such as a company
- a government or public authority
- a trustee of a trust
- a member of a firm that is not a legal person under its governing law
The conditions relating to when a beneficial owner is deemed to have significant control are similar to the existing regulations in relation to persons with significant control (PSC Regulations) already in force in the UK.
An overseas entity must register any beneficial owner that meets one or more of the following conditions known as the ‘natures of control’.
The beneficial owner is an individual person, other legal entity, government or public authority and:
- holds, directly or indirectly, more than 25% of the shares in the entity;
- holds, directly or indirectly, more than 25% of the voting rights in the entity;
- holds the right, directly or indirectly, to appoint or remove a majority of the board of directors of the entity; or
- has the right to exercise, or actually exercises, significant influence or control over the entity.
The beneficial owner is a trustee of a trust and:
- the trustees of that trust (in their capacity as such) hold, directly or indirectly, more than 25% of the shares in the entity;
- the trustees of that trust (in their capacity as such) hold, directly or indirectly, more than 25% of the voting rights in the entity;
- the trustees of that trust (in their capacity as such) hold the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company; or
- the trustees of that trust (in their capacity as such) have the right to exercise, or actually exercise, significant influence or control over the company.
The beneficial owner is a member of a firm that is not a legal person under its governing law and:
- the members of that firm (in their capacity as such) hold, directly or indirectly, more than 25% of the shares in the entity;
- the members of that firm (in their capacity as such) hold, directly or indirectly, more than 25% of the voting rights in the entity;
- the members of that firm (in their capacity as such) hold the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company; or
- the members of that firm (in their capacity as such) have the right to exercise, or actually exercise, significant influence or control over the company.
If there are no beneficial owners, or it is not possible to identify all of the beneficial owners, the representatives of the overseas entity need to give the Registrar information about the overseas entity’s managing officers. This is a director, manager or company secretary of the overseas entity.
The rules regarding who is required to register will apply retrospectively to overseas entities who brought property or land on or after 1 January 1999 in England and Wales.
Entities that disposed of property or land after 28 February 2022 will also need to register and give details of that disposal.
After registering the overseas entity at Companies House, it will receive a unique Overseas Entity ID to give to the Land Registry when it buys, sells, transfers, leases or charges UK property or land. If the overseas entity does not have this code, the Land Registry will refuse to deal with the application.
Verification by a UK-Regulated agent
The filing of the application can be completed by any officer, employee or representative of the overseas entity, but before the entity can be registered at Companies House, a UK-regulated agent is required to independently carry out verification checks on the beneficial owners and managers and provide the Companies House Registrar with an entity verification check statement and an agency verification code. Therefore, it is quicker and easier for an overseas entity to be registered by the same UK-regulated agent that carried out its verification checks.
If the UK-regulated agent that carried out the verification checks is also registering the overseas entity, it can complete an overseas entity verification statement as part of the registration service. Otherwise, the agent will need to separately submit an overseas entity verification checks statement once the entity (or its representatives) have filed the application.
The verification must be completed by a verification agent no more than 3 months before the overseas entity is registered.
Registration fee
Each application to register an overseas company will attract a Companies House fee of £100. This does not include any other professional fees.
Deadline for compliance
Overseas entities caught by the regulations will have until 31 January 2023 to register with Companies House.
If a person fails to comply with the regulations, they could be fined up to £2,500 per day or get a prison sentence of up to 5 years. They will also face restrictions when buying, selling, transferring, leasing or charging property or land in the UK.
Updating information on the register
The overseas entity must file an annual update one year after it was registered, and every year after that. This will be used to tell the Registrar about any changes, or confirm that the information they hold is still correct. It must be filed no later than 14 days after the due date. It can also be filed earlier if it needs to update any information.
Removing an overseas entity
An overseas entity can apply to be removed from the ROE if it is not, or is no longer, a registered owner of land or property in the UK.
The sections of The Economic Crime (Transparency and Enforcement) Act 2022 relating to updates and removal have not yet come into force. This means that updates and removal applications can only be made once this happens.
How can CDS help?
CDS is registered as a verification agent and can assist you with carrying out verification checks on the information to be delivered to Companies House and/or submitting your application. Please contact our corporate team (details below) for a fee estimate or for further information.
Should you have any questions about the ROE regulations generally, please also get in touch.
Contact our corporate team at:
Silke Buschmann - Partner - silkebuschmann@cdsmayfair.com
Selina Lau - Senior Associate - selinalau@cdsmayfair.com
Whilst care has been taken in the production of this article and the information contained within it has been obtained from sources that Charles Douglas Solicitors LLP believes to be reliable, Charles Douglas Solicitors LLP does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the article or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this report. This report has been compiled using information available to us up to its date of publication.