The Register of Overseas Entities – brief outline and verification services

The much anticipated Register of Overseas Entities (“the Register”))  was finally launched by Companies House on 1 August following the passing of the Economic Crime (Transparency and Enforcement) Act 2022 (“the Act”) earlier this year.

A key component of the Act is the establishment of the Register which is intended to provide clarity as regards the identity of those controlling overseas entities that own UK  land (including leases over 7 years) and to combat economic crime, such as money laundering. The transitional period for compliance with the new registration requirement for overseas entities already owning UK land starts on 1 August 2022 and ends on 31 January 2023.

As part of the registration process, overseas entities are required to disclose information about their beneficial owner(s) (if any) and/or managing officer(s) to Companies House. This information will be held on the Register and the overseas entity must update this information annually. The information that must be disclosed for individuals includes date of birth, residential address, nationality and whether the individual is affected by any sanctions.

Individuals and legal entities will be registrable beneficial owners if they meet one or more of the following conditions, and are not exempt for any reason specified under the Act:

• They directly or indirectly own 25% of the shares of the overseas entity;
• They directly or indirectly own more than 25% of the voting rights of the entity;
• They hold the right to appoint one or remove the majority of the board of directors of an overseas entity;
• They have the right to exercise, or do exercise, significant influence or control over an overseas entity.

There are also provisions to include bodies which are not themselves legal entities such as trustees of a trust as registrable beneficial owners where they meet the above mentioned criteria.

Each entity that completes the registration process will be allocated an “overseas entity ID” and the Act provides that the beneficial owner information and certain other details must be verified as part of the registration process.

The Register of Overseas Entities (Verification and Provision of Information) Regulations 2022  sets out who can verify the information and the standard of verification required.  Verification must be undertaken by a “relevant person” who is supervised for the purposes of the Money Laundering Regulations 2017 which includes credit/financial institutions, auditors and similar, independent legal professionals and trust or service company providers.

Cheeswrights LLP has been approved by Companies House as an authorised agent for verification purposes and for more information please contact Edward Gardiner or your usual Cheeswrights contact.

August 2022.