It Is Time for Filing an Overseas Entity Update Statement

In the summer of 2022, the UK Government introduced the registration of overseas entity as part of their plan to address global economic crime. It requires overseas entities that own UK property or land to declare their beneficial owners or managing officers. Without registration with Companies House, such overseas entities cannot acquire, sell, transfer, lease or charge land in the UK.

As this requirement sets back a year, in this blog post, we will explain how to file an overseas entity update statement so that no criminal offences are committed, and an overseas entity is able to transact with their property or land in the UK.

Overseas Entity Update Statement

An overseas entity update statement is a statement that needs to be filed annually by all overseas entities on the Register of Overseas Entities. In other words, overseas entities have an annual duty to file an updated statement to Companies House confirming that the information on the register is up-to-date and correct.

To complete this filing, each entity needs an authentication code. This is a unique 6-digit alphanumeric code. The code is used to authorise information filed online and serves as the equivalent of a company officer’s signature. The code is requested through creating or signing into an account on WebFiling and is sent to the entity’s email address.

Failure to comply with the duty to update statement constituted a criminal offence. Further, non-compliance may lead to prosecution or the imposition of a financial penalty. Additionally, the overseas entity’s ID becomes invalid until records are updated and filed.

What Is Needed?

The following documents are needed to file an overseas entity update statement:

• Companies House Account
• The Overseas Entity ID
• The Overseas Entity’s Authentication Code
• The contact (name and email address) of someone to be communicated about the update
• Information about the UK-regulated agent that conducted the verification checks, if relevant
• A credit or debit card to pay £120 fee

Timing

Every overseas entity is required to submit an updated statement annually, regardless of whether any changes have occurred. However, this annual frequency is minimum and if an overseas entity decides to file more often, they may do so.

The annual date for filing, the statement date, is 12 months from the later of the overseas entity was first registered on the registry or the date the latest updated statement provided to Companies House. Since the expiry of the statement date, an overseas entity has 14-days to file. Beyond these14-days the entity is considered late in filing and is required to file at the earliest opportunity.

Each updated statement covers only the 12-month period. Where an overseas entity needs to cover a longer duration, then another update statement should be filed. Hence, an update statement cannot be filed for a term longer than 12 months. The Companies House register provides the update statement dates for entities.

Late Filing

Non or late filings amount is a criminal offence and entities may encounter prosecution or a financial penalty for breaching this obligation. Furthermore, the overseas entity’s ID will become invalid preventing the company from dealing with their existing property or registering with HM Land Registry. Finally, in case of a default a note to the entity’s public record will be added.

Who Can File an Overseas Entity Update Statement

Anyone employed or working on behalf of the overseas entity is allowed to use the online service. However, where any trusts are involved in the overseas entity or any beneficial owners or managing officers of the entity have their personal information protected at the Companies House, this service is not available.

In case where a trust is involved in the overseas entity, the updated statement should be provided in paper format instead of filing it online.

Content of the Update Statement

Ensuring the accuracy of all submitted information is of utmost importance. The register outlines all the information about the overseas entity, its beneficial owners or managing officers that needs to be reviewed and/or updated. Home addresses of individual beneficial owners and managing officers may be needed to be entered anew. Where changes are made, such changes should be verified by a UK-regulated agent no more than 3 months prior the update statement’s date.

Regarding the content of the update statement more specifically, where there is a new beneficial owner or managing officer, information about that new member must be provided, or were a person stopped being a beneficial owner or managing officer, the statement should indicate the date they stopped being in that position.

If the overseas entity has no active beneficial owners, then information on each managing officer should be provided.

Prior amending any information verification checks must be conducted. These checks are required only in the case of new information, and they must be carried out no later than 3 months before the date of the update statement. If the information remains unaltered, no verification is needed.

Only UK-regulated agents may carry out verification checks. These agents have an agent assurance code. They must be based in the UK and supervised according to the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. Financial institutions or legal professionals may be competent to carry out these checks.

You can find a list of UK-regulated agents here.