A practice note on the key considerations for lenders, and in finance transactions generally, as a result of the establishment of the register of overseas entities.
The register of overseas entities was established under the Economic Crime (Transparency and Enforcement) Act 2022. The Act provides for the creation and maintenance of the register and contains requirements for overseas entities owning UK property to apply for registration and provide information about their beneficial owners.
Scope of this note
The Economic Crime (Transparency and Enforcement) Act 2022 (ECA 2022) provides for the establishment of the long-awaited register of beneficial ownership of overseas owners of UK property (the Register). Under the ECA 2022, overseas entities owning or wishing to acquire certain UK property interests must apply for registration on the Register. The aim of the Register is to improve the transparency of foreign ownership of UK property and to tackle economic crime, and the ECA 2022 uses a mixture of land registration requirements and criminal sanctions to ensure compliance with its provisions.
Most of the provisions of Part 1 of the ECA 2022 relating to registration of overseas entities and creation of the Register came into force on 1 August 2022. However, the majority of the provisions in the ECA 2022 relating to land ownership and transactions (including Schedule 3 to the ECA 2022) will be brought into force on 5 September 2022.
The introduction of the Register may have an impact on certain finance transactions involving an overseas entity owning UK property of which lenders should be aware. This note looks at the key issues for lenders to consider in relation to the Register and the requirements of the ECA 2022.
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This piece was originally published by Practical Law and is reproduced with the permission of the publishers.
Matthew Padian
Lucy Trott