The Register of Overseas Entities, created under the Economic Crime (Transparency and Enforcement) Act 2022, has recently been launched.
The Register will store details of most foreign companies that own property in the UK, in a similar way to how Companies House stores details on UK companies.
In order to purchase and sell land, foreign companies will need to obtain an Overseas Entity ID. This involves providing details for the company and information on its beneficial ownership, and will need to be updated every 12 months.
Without an Overseas Entity ID, the Land Registry will not permit the company to be registered as a proprietor on a purchase and will enter a restriction on the title of any property owned by a non-compliant company. This will warn any future purchasers or lenders that the company is non-compliant, and that steps will need to taken by the company to obtain their Overseas Entity ID before a transaction can proceed.
There is a 6-month transition period running to 28 February 2023 during which any third-party purchasers will not be prevented from registering themselves as proprietor if a foreign company seller does not have an Overseas Entity ID. Any transactions that could be affected by the deadline should therefore ensure that steps are being taken to be compliant, in case the deadline is missed and an Overseas Entity ID is required.
If you are part of a foreign company that owns, or is intending to own, UK property and you want further advice on the Register, please call 01524 846846 to speak to one of our qualified lawyers.