Mishcon de Reya page structure
Site header
Main menu
Main content section

Overseas companies in the spotlight again

Posted on 13 December 2023

The Register of Overseas Entities (ROE) is the latest tool in the Government's armoury to increase transparency. Launched by the Economic Crime (Transparency and Enforcement) Act 2022 (ECTEA), new legislation, the Economic Crime and Corporate Transparency Act 2023 (ECCTA), was introduced on 26 October 2023 to tweak the rules and makes its impact wider. Relevant to all overseas entities (OEs) that deal with UK property, the changes are noticeable. 

Briefly, it requires OEs that own certain UK property to identify their beneficial owners and register them on the register. If the OE does not register and obtain an Overseas Entity ID, it will not be possible for the OE to deal with the property, for example, buy, sell, transfer, lease or charge. Once registrable beneficial owners (RBOs) have been identified, the OE needs to provide information about each RBO to Companies House. The register is open to the public, subject to some limited exceptions. 

The principal changes introduced are summarised as follows:

  1. Where someone holds an interest in an OE on behalf of someone else as nominee, both the nominee and the ultimate beneficiary will be RBOs and registrable. The nominee condition was perhaps not necessary as anyone able to exert significant control over the OE was registrable. However, there is no de minimis ownership threshold for the ownership condition where a nominee is involved.
  2. The new rules imposed by ECCTA will require OEs to record any changes to beneficial owners following the announcement of the ROE and prior to the original registration deadline. Structuring that took place between 21 February 2022 and 31 January 2023 (the update period) will need to be assessed.
  3. Any trustee indirectly owning an interest in the OE will now need to be registered and information about the trust disclosed. 
  4. Any corporate trustee which is a beneficial owner of the OE will now need to register. 
  5. On the annual statement, the OE will need to provide information about any changes to beneficiaries, including where a trustee ceases to be an RBO.
  6. Limited public access to information relating to trusts in the ownership chain will be allowed where there is a legitimate interest (for example, scenarios involving a risk of money laundering). This aligns the ROE with the Trust Registration Service.

The increased administrative burden on OEs is significant. Following the changes announced by ECCTA, we would recommend property portfolios, nominee arrangements and current records are reviewed, with particular attention to beneficial ownership changes during the update period.

For further information contact Carol Katz.

How can we help you?

How can we help you?

Subscribe: I'd like to keep in touch

If your enquiry is urgent please call +44 20 3321 7000

Crisis Hotline

I'm a client

I'm looking for advice

Something else