The much anticipated Economic Crime (Transparency and Enforcement) Act 2022 was passed on 15 March 2022. It was rushed through Parliament in just over two weeks in response to the war in Ukraine and pressure to crack down on Russian oligarchs and (amongst other measures) introduced (1) a new Register of Overseas Entities operated by Companies House and (2) an obligation on “overseas entities” who currently own or wish to buy UK real estate to disclose details of their beneficial owners.

The Act came into force on 1 August 2022 and the requirement to register took effect from 5 September 2022.

The Act imposes an obligation on overseas entities that currently own a freehold or leasehold interest of over 7 years in England and Wales (“a qualifying estate”) that was acquired after 1 January 1999 or that acquire such interest after 5 September 2022 to be registered on the Register of Overseas Entities at Companies House (there are corresponding provisions in Scotland and Northern Ireland).

As a result:

• overseas entities who are already owners of a qualifying estate in land will have a restriction put on their Land Registry title. This will prevent them from dealing (selling, charging or granting a lease of seven years or longer) with the land unless they are registered on the Register at Companies House or are exempt from registration;
• no overseas entity can be registered at the UK Land Registry as the proprietor of a new qualifying estate in land unless it has first been registered on the Register at Companies House or is exempt from registration. Anyone purchasing land or taking a lease for seven years or longer from an overseas entity or lending against such interests will therefore need to ensure that the seller/landlord’s beneficial ownership registration is uptodate before they commit to a purchase, lease or loan. If not the purchaser, tenant or lender will be unable to register their own interest due to the restriction on the overseas owner’s title prohibiting dealings.

Overseas Entities should therefore be acting now to obtain an OE ID Number.

Our commercial property team have put together a summary of the main points of the legislation relating to the Overseas Register.

Download the useful summary here.