The new Register of Overseas Entities (ROE) is a public register of beneficial ownership information for overseas entities that own land or property in the UK. The ROE was created under the Economic Crime (Transparency and Enforcement) Act 2022, which was passed in response to the Russian invasion of Ukraine. The ROE is intended to make it more difficult for criminals to launder money through UK property by making it easier for law enforcement to identify the true owners of overseas entities.
The ROE came into force on 1 August 2022. All overseas entities that own land or property in the UK must register with the ROE. The information that must be registered includes the name and address of the beneficial owner of the entity, as well as the date on which the entity acquired the property.
The ROE is a valuable tool for law enforcement and other agencies that are working to combat economic crime. By making it easier to identify the true owners of overseas entities, the ROE can help to deter criminals from using UK property to launder money.
In this article we will cover the following:
- The extent of crime related to property investment in the UK
- A brief overview of the ROE
- An explanation of why the ROE was created
- A description of the information that must be registered on the ROE
- A discussion of the benefits of the ROE
So how big is the problem?
To highlight how big of an issue money laundering through property is in the UK, here are some statistics for 2022 on money laundering related to UK property investment by overseas individuals:
- Total value of UK property investment by overseas individuals: £6.7 billion
- Value of UK property investment by Russians accused of corruption or links to the Kremlin: £1.5 billion
- Percentage of UK property investment by Russians accused of corruption or links to the Kremlin in the City of Westminster: 28.3%
- Percentage of UK property investment by Russians accused of corruption or links to the Kremlin in Kensington and Chelsea: 18.8%
Such statistics highlight the extent of money laundering related to UK property investment by overseas individuals. The UK has long been a target for money launderers, and the property market is a particularly attractive option as it is relatively easy to hide the source of funds. The recent sanctions against Russia have increased the focus on money laundering in the UK, and it is likely that these statistics will only increase in the coming years.
How do criminals achieve their goals? Here are some of the ways that money launderers use UK property investment to launder their money:
Buying property in cash: This is the most common way to launder money through property investment. Criminals can simply buy property in cash, without having to provide any evidence of where the money came from.
Using shell companies: Criminals can set up shell companies to buy property on their behalf. This makes it difficult to trace the ownership of the property, and therefore the source of the funds.
Using trusts: Criminals can set up trusts to own property. This can also make it difficult to trace the ownership of the property, and therefore the source of the funds
This is why the UK government has taken steps to combat money laundering in the property market. These include introducing new regulations for property transactions, increasing the powers of law enforcement agencies to investigate suspected money laundering and recently, the introduction of the ROE.
The creation of the ROE
The ROE is a public register that lists the beneficial owners of overseas entities that own land or property in the UK. The register was created as part of the Economic Crime (Transparency and Enforcement) Act 2022, which was passed in response to the Russian invasion of Ukraine. The aim of the ROE is to increase transparency and make it more difficult for criminals to launder money through UK property. The ROE has been welcomed by anti-corruption campaigners, who believe that it will make it more difficult for criminals to hide their assets. However, some critics have argued that the ROE is too complex and that it will be difficult to enforce.
Are you looking to invest in UK property, or perhaps you already own property here?
If you are an overseas investor who owns property in the UK, or if you are considering buying property in the UK, you will need to be aware of the ROE. The following are some of the key things you need to know:
Who is required to register?
The ROE applies to all overseas entities that own land or property in the UK. An overseas entity is any entity that is not incorporated or registered in the UK. This includes companies, trusts, partnerships, and individuals.
What information must be registered?
- The ROE requires overseas entities to register the following information about their beneficial owners:
- Name
- Date of birth
- Nationality
- Residential address
- Occupation
How do I register?
You can register your beneficial ownership information on the ROE website. The registration process is free.
What are the penalties for non-compliance?
If you fail to register your beneficial ownership information on the ROE, you could face a fine of up to £2,500.
Benefits of registering on the ROE
There are a number of benefits to registering on the ROE, including:
Increased transparency: The ROE makes it easier for law enforcement agencies to track down criminals who use UK property to launder money.
Reduced risk of fraud: The ROE makes it more difficult for criminals to steal your identity and take control of your property.
Improved market reputation: By registering on the ROE, you are demonstrating that you are a responsible investor and that you are committed to compliance with the law.
The ROE system may seem like a lot of additional paperwork, but it is important to remember that it is designed to protect you and your investment. By registering your beneficial ownership information on the ROE, you are helping to make the UK property market a more transparent and secure place.
Final thoughts
The ROE is a new initiative that is designed to increase transparency and reduce the risk of financial crime in the UK property market. If you are an overseas investor who owns property in the UK, or if you are considering buying property in the UK, we strongly suggest that you register your beneficial ownership information on the ROE. By doing so, you are helping to make the UK property market a safer and more secure place for everyone.