We previously brought you news of the register of overseas entities deadline, which you can read more about here. This deadline passed on 31st January, and overseas companies which have failed to register now face the possibility of sales restrictions and tough fines, according to the Department for Business, Energy and Industrial Strategy’s latest press release. Lisa’s Law is one of a select group of UK-regulated agents who are able to complete verification checks on beneficial owners of an overseas entity. This involves completing verification checks on beneficial owners of an overseas entity The full list is available on the government website here.


Following the deadline on 31st January, it has been revealed that an estimated 19,510 out of a total of 32,440 register overseas organisations have declared their beneficial owners. According to the government, the register will help to bring transparency to offshore trusts, something they often lack due to frequently being used to obscure assets for tax purposes.


Haven’t already registered? Contact us right away. The government has announced that they are now assessing and preparing cases for enforcement action, so any time wasted at this point could be hugely costly for you and your business. The UK government have made it very clear that they are serious about individuals using UK property to launder wealth.


Keep reading to learn more about the register of overseas entities, what will happens to overseas entities which fail to register, as well as potential issues with the register in terms of increasing transparency of property ownership.


What is the register of overseas entities? A reminder.


The Register of Overseas Entities was introduced by the government on 1st August 2022 in an attempt to crack down on corruption by overseas entities.  Following the introduction of the register, overseas entities that own land or property in the UK must declare their beneficial owners and/or managing officers. Entities which do not register face the possibility of getting a fine, a prison sentence, or both, as well as restrictions on buying, selling, transferring, leasing or charging their land or property in the UK.


The government has recently made a concerted effort to better crack down on corruption, a timely intervention given London’s reputation as the money-laundering capital of the world. This has coincided with Russian’s invasion of Ukraine, with the UK government cracking down on Russian oligarchs who often resided in London.


The Economic Crime and Corporate Transparency Bill comes under this approach towards cracking down on corruption, with the bill currently making its way through Parliament. Its intention is reportedly to “make provision about economic crime and corporate transparency; to make further provision about companies, limited partnerships and other kinds of corporate entity; and to make provision about the registration of overseas entities.”


What happens now?


Once you have registered with Companies House as an overseas entity you will receive a unique Overseas Entity ID. Beneficial owners and managing officers will also be added to the register. You will be able to use the Overseas Entity ID to give to the land registry when you buy, sell, transfer, lease or charge for UK property or land. However, if your application is rejected then Companies House will notify you of what to do next and also refund you the £100 registration fee.


It’s important to point out that, like many registers, you will need to notify Companies House with any changes. This will be done on an annual basis, and not only will you be required to let them know of any changes, but also to ensure that the information held is still correct. This must be done no later than 14 days following the anniversary of the initial registration.


In some cases you might find it necessary to remove yourself from the register of overseas entities. This may be the case if you are no longer a registered owner of land or property in the UK.


Potential issues with the register of overseas entities


As of now, there are still thousands of properties which are undeclared in terms of who owns them. Transparency International, a non-profit which aims to increase transparency and reduce corruption, recently released analysis which found that nearly 52,000 UK properties were still owned anonymously despite the new laws. This translates as 18,000 offshore companies, near half of the offshore companies required to register having not done so. You can read Transparency International’s full report here.


Some organisations like Transparency have criticised the laws for not going far enough, raising concerns that there are potential loopholes within the register of overseas entities which could allow offshore companies to avoid the rules.  One particular issue is that 12 per cent of companies which have filed information claim to have no beneficial owners, ensuring that the identity of, for example shareholders in the company remains a secret.


Our thoughts


As a select group of agents who are able to carry out verification checks on beneficial owners of an overseas entity, Lisa’s Law can help to assist your business with these matters. The government have made it clear that they will take action on overseas entities which do not register by pledging to introduce fines and prison sentences against those individuals.


Ultimately, the aim of the register is to make it more difficult for foreign criminals to launder money through UK property. If you would like our help with these verification checks, please don’t hesitate to contact us using the methods below. Read our previous article for the full guide to how to enrol on the register of overseas entities.


Have questions about this article? Get in touch today!


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