Overseas entities & the need to renew ROE status annually
Overseas entities that hold UK property registered at the UK Land Registry are required to register as a Registered Overseas Entity (ROE) on a separate Register maintained by Companies House.
Overseas Entities have been able to register as an ROE from 1 August 2022, and registration has been a compulsory requirement from 1 February 2023. An overseas entity that holds property in the UK and is not registered as an ROE will not be able to acquire, dispose of or charge UK property as a result of standard form restrictions now placed on the Land Registry titles for all properties held by overseas entities. Failure to register as an ROE with Companies House is also a criminal offence.
The majority of overseas entities delayed registration as a ROE until the end of the short transition period, registering shortly before the 1 February 2023 deadline. However, those ROE that were quick of the mark to register on or after 1 August 2022 will now be approaching 12 months from the date of their initial registration, triggering a 14 day period within which to renew their registration. The renewal process is not automatic and will require the ROE to take positive steps to provide and verify the information required by Companies House, regardless of whether there have been any changes to the beneficial owners of the ROE. If this deadline is not met the ROE status will become void and the overseas entity will not be able to acquire, dispose of or charge UK property and criminal and financial penalties may apply.
Whilst in most cases renewal should be straightforward, an overseas entity that is an ROE should ensure, so far as is possible, that the renewal process is completed in advance of any pending acquisition, disposal or charge that will require the provision of an ROE number. We understand that it is possible for ROE to pre-empt the difficulties that the renewal process may cause to any such pending transactions by starting the renewal process in advance of the 12 month period.
As for those overseas entities that have registered as an ROE, but have now disposed of all UK property interests, registration can simply be left to lapse at the end of the initial 12 month registration period. This would seem, in the absence of any statutory procedure, to solve the conundrum as to how to remove a ROE from the register, but does not mean that the information provided as part of the initial ROE application will be removed from the public register.
Whilst renewal will be a matter for each ROE to diarise and take appropriate steps to complete, the complexity of the registration and renewal process will vary from company to company. We will be happy to advise as to the necessary steps to renew a ROE registration and the potential impact of the Act on any pending property transactions.