The UK Economic Crimes (Transparency and Enforcement) Act 2022 was passed by Parliament in early 2023 as a result of the outbreak of war in Ukraine. The aforementioned act created the Register of Overseas Entities.
The latest law states that most foreign companies or other entities that own or intend to buy property in the UK must:
- obligatorily submit to registration at the British Companies House;
- obligatorily identify the real beneficiaries who stand behind the company, as well as another entity through which the land was acquired or, in some cases, identify its "managing directors";
- if a foreign entity has sold land since February 28, 2022, it must provide information about this sale.
Companies House in the UK then issues a unique identification number which will then be passed on to the Land Registry when each transaction is recorded. It is also important that the new legal provisions in this area apply retroactively to certain properties, even if their purchase dates are earlier than the date of entry into force of the new law.
The aforementioned register has been operating since August 2022, but on January 31, 2023, the deadline for performing the activities required by British law expires. Up to this date, foreign entities subject to registration will have to register with Companies House under the newly enacted legal rules.
Failure to comply by January 31:
If a foreign entity fails to complete the necessary registration by January 31, 2023, such a situation will be treated as a crime, and additionally it makes the property inalienable. This is because the land registry will not be able to process any transaction in cases where the registration of a foreign entity has not taken place.
For more information in this regard, please contact the Eberhard Advisory Team.
