31 January 2024 is the first anniversary of full implementation of the Register of Overseas Entities (RoE). The RoE was established by the Economic Crime (Transparency and Enforcement) Act 2022 (ECTEA), as a strategic move to tackle global economic crime and further transparency in the UK property market. There are now more than 28,000 entities on the RoE, and the RoE has been searched more than 500,000 times. As we approach this one-year anniversary, many entities will be due to submit their first annual update to Companies House.

The update period

In addition to registration, ECTEA imposed an "updating duty" on all registered overseas entities. Each registered overseas entity is required to provide an update statement to Companies House annually. All registered overseas entities must file an annual update statement – even where there has been no change. Registered overseas entities can, by notice, bring forward the update deadline. Hence, theoretically at least, update statements can be filed at any time during the update period and could be filed at the point at which a relevant change is implemented.

Companies House guidance confirms that an update statement must be filed within a year of the anniversary of date of registration or a year of the filing date of the last statement, if filed early. There is then a 14-day grace period within which to file, which should be considered to run from the day preceding the anniversary of registration or filing. While the update period can be shortened by an early filing (with that filing resetting the clock), an update statement may never cover longer than 12 months.

Those overseas entities which registered close to the 31 January 2023 deadline will be in the midst of their current update period. Failure to update in line with legislation is a criminal offence which may result in prosecution or financial penalties. In addition, non-compliant overseas entities will face restrictions on their ability to transact with their property. Companies House guidance indicates that a note will be added to individual registers within the RoE to flag that an update statement has not been filed by the relevant overseas entity by the required deadline.

Looking to the future

On 26 October 2023, the Economic Crime and Corporate Transparency Act 2023 (ECCTA) received Royal Assent and marked a further step in the drive to improve transparency and tackle fraud. While not yet fully in force, Part 3 of ECCTA will bring about some important changes to the RoE, including new requirements for overseas entities acting as nominees in land transactions and measures pertaining to the disclosure of trust-related information.

There is also a consultation on improving transparency of land ownership involving trusts. In particular, the consultation is seeking views on widening access to trust information held on the RoE. The consultation will close on 21 February 2024 and is part of the government's continued work to achieve its transparency aims.

Registered overseas entities will need to be appraised of these changes to ensure compliance going forwards and the accuracy of future update statements.