The Register of Overseas Entities (“ROE”) was created under the Economic Crime (Transparency and Enforcement) Act 2022.

Whilst changes to introduce this transparency regime around who owns land in the UK had been proposed back in 2016, the legislation was fast tracked onto the statute books earlier this year in response to Russia’s invasion of Ukraine as part of the UK Government’s package of sanctions.

What is the ROE?

It is a public, searchable register maintained by Companies House which will show those who own or control an overseas entity which owns or leases UK property including property in Scotland.   Disclosing these details aims to prevent the use of companies to disguise true ownership.

Who does it apply to?

Any company or entity that is incorporated outside the UK which owns or leases land.  There are no limits on what is considered overseas.  It will apply to companies or entities registered in the Channel Islands or the Isle of Man.

What information do we need to work out whether we should register in ROE?

The criteria is complex. You must (i) have a relevant interest in property in the UK and this includes Scottish land and (ii) work out whether you have any registrable beneficial owner(s) or not (which includes those with certain share or voting rights or who can exercise significant influence or control over the entity).

You may need advice on your corporate structure or how the rules apply and what information you need to gather ahead of making an application. We can help you with this.

What are the key dates?

The regime is already in force (since 1 August 2022).The ROE has some retrospective reach and applies to an overseas entity if it owns property or tenants property (under a 20 year or more lease) in Scotland and their interest was registered in the Land Register of Scotland on or after 8 December 2014 (including if your interest was transferred from the Sasine Register by voluntary registration or induced by automatic plot registration).

What are the deadlines for initial registration?

Overseas Entities who currently own or lease property have until 31 January 2023 to complete their registrations in the ROE.  For any Overseas Entities buying, leasing or granting security over property, they must register before completing the transaction.

How do we register in the ROE?

You need to provide certain information to Companies House to complete an application to register.  The process includes independent verification of the information. We do know that it can take some weeks to complete the registration, so it’s best to start the process as soon as possible.

What if we don’t register on time?

There are both criminal sanctions and transactional consequences:

• Criminal sanctions: Both the overseas entity and its officers (like a director) can commit criminal offences resulting in prosecution.  The crimes are punishable with heavy fines or even prison.
• Transactional consequences: Additional land registration requirements mean you will not be able to register your interest in the Land Register of Scotland if you buy, sell, transfer or lease property or grant security over property. Practically, this means transactions will not complete until registration requirements are finalised and a registration ID is obtained.

Is there a requirement to keep the registration updated?

Yes, there is a duty to annually update the registration.  This applies even if there are no changes to the submitted information.

What should we do now? ACCT

• Appraise the entity’s property portfolio to see if registration in the ROE is triggered;
• Check the entity’s structure to identify any registrable beneficial owner(s) or managing officers whose details need to be disclosed;
• Compile the information you will need to work through the various notification and verification procedures ahead of making your application to the ROE;
• Time any application to ensure it’s completed before the end of the transitional period or before a transaction deadline.

You can find more detail about the ROE in our handy guide.

Burness Paull does not provide verification or application services for ROE, but we can provide legal advice on the new requirements and how they might impact your current property portfolio or transactions.

This is a brief summary of the legislation and process relating to the ROE as at the time of writing and is for information only. It is not legal advice and should not be relied upon.

Please get in touch if you would like more information, or if you need help navigating your way through the new requirements, please get in touch - we’d be delighted to assist.

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