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Transparency in Overseas Entities: Challenges and Solutions

Published by Chirag
Published Date: September 5, 2023 , Updated Date: September 5, 2023

In a startling revelation, it has come to light that achieving transparency in Overseas Entities remains a significant challenge due to serious design flaws in the government's approach. This pressing issue has been highlighted by a comprehensive report conducted by experts in the field.

The report uncovers the fact that vital information about the ownership of approximately 109,000 properties in England and Wales is either missing or concealed within the records of Companies House's Register of Overseas Entities. This deficiency accounts for a staggering 71% of the total properties held by overseas entities, which currently stands at 152,000 properties.

Concealed Ownership: A Barrier to Transparency in Overseas Entities

Within this alarming statistic, roughly 15,000 properties (10%), known to be held via an overseas entity, remain entirely absent from the Companies House register. Furthermore, an additional 39,000 properties (25%) have failed to report crucial information, shrouding the true ownership of these assets in secrecy. Astonishingly, trusts are being employed to obscure ownership details, playing a pivotal role in concealing the ownership of 69,000 properties, which is 63% of the total properties with obscured overseas ownership.

transparency in Overseas Entities

Experts have voiced their concerns, emphasising the fact that addressing these issues is crucial to achieving transparency in Overseas Entities. There is no point building a dam halfway across a river. They also stated that these gaps are threatening the efficacy of the entire register, and the government should take immediate action to close them.

The Register of Overseas Entities was introduced as a response to the Russian invasion of Ukraine, pledging to uncover the identities of anonymous foreign property owners in the UK. However, substantial gaps in the legislative framework of the register have raised concerns that sanctioned individuals, money launderers, or other nefarious actors may still be benefiting from these properties. 

Transparency Gaps and the Legislative Framework

One of the core issues spotlighted in the report is the lamentable state of data quality. This subpar data quality has resulted in 2,000 to 6,000 properties being impossible to match, leading to missed information and outdated records. Furthermore, while trustees have reported details to HMRC for 1,300 properties, a staggering 17,000 properties remain unreported to any government authority.

transparency in Overseas Entities

Adding to the complexity, the government is opposing changes that would compel nominees and trustees owning shares to reveal their identities to Companies House.

In response to these disconcerting challenges, we want to reassure property owners and stakeholders that we are a regulated agent authorised by Companies House to register overseas entities and file annual update statements. Our mission is to facilitate your compliance journey, as we are committed to ensuring transparency in Overseas Entities. We will guide you through the process, providing the necessary expertise and support.

Chirag
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