One year has now passed since the Register of Overseas Entities (“ROE”) came into effect on 1st August 2022. As explained in further detail in our previous newsletters (our most recent newsletter on ROE is available here), overseas entities that own residential or commercial property in the UK or who are tenants in a lease of more than 7 years in length must be listed on the Companies House Register of Overseas Entities.
The Economic Crime (Transparency and Enforcement) Act 2022, which prescribes the ROE registration requirements, also imposes a duty on overseas entities to file update statements annually.
What is the overseas entity update statement?
The purpose of the update statement is to confirm that all of the information about the overseas entity held on the ROE register is still correct, and to update any information that has changed. This includes information about the entity’s beneficial owners and managing officers. For further details about the information held on the ROE register, please see our previous newsletter. Even if there have been no changes since registration, an update statement must be filed.
What information must be updated?
If there are any new beneficial owners or managing officers, their required information (e.g. residential address and nationality) must be provided. In addition, if someone is no longer a registrable beneficial owner or managing officer, the entity must provide the date on which they ceased to be registrable, and ensure that their information is correct as of that date. Information must also be provided about any individuals who both became and ceased to be a registrable beneficial owner or managing officer during the update period (explained below), and this information must be correct as of the date they ceased to be registrable.
When do you need to file the update statement?
The update statement must be filed within 14 days of the end of each ‘update period’. The ‘update period’ is either: (a) the 12 month-period beginning with the date of the overseas entity’s registration or (b) the 12-month period beginning with the day after the end of the previous update period. Therefore for the very first update statement, the filing deadline (a) will apply.
Anyone can check the filing due date by searching for the relevant entity on the Companies House register.
What verification checks need to be completed?
As part of the registration process, all information supplied to Companies House would have been verified by a UK-supervised “relevant person” such as 3CS, who are registered verification agents. Similarly, for the update statement, verification checks must be completed for any new information supplied to Companies House. Verification checks must be carried out no more than 3 months before the date of the update statement.
What are the consequences of non-compliance with the update duty?
There are potentially severe consequences if an overseas entity does not file its update statement. Firstly, the overseas entity and every officer in default would be committing a criminal offence, and may face prosecution or a financial penalty. When determining the financial penalty amount, Companies House will take into account the value of the entity’s property portfolio.
In addition to this, the Overseas Entity ID will become invalid, which means that the entity will not be able to buy, sell, transfer, lease or charge its property or land in the UK. Companies House will also add a note on the public record which states that the entity has not filed its update statement.
How 3CS can help
3CS is an authorised UK verification agent, and our London-based team has considerable experience in dealing with the ROE registration and verification process. If you have any questions regarding the ROE requirements or would like assistance with your annual update filings, please get in touch with your usual 3CS contact.