Recent government proposals will affect overseas companies that own UK land and that bid for UK government contracts.
On 12 May 2016, the UK's Prime Minister, David Cameron, announced plans to introduce a public register of the beneficial ownership of overseas companies owning property in the UK. The announcement follows a consultation earlier this year on increasing transparency around who really owns overseas companies that hold property in England and Wales and/or that are bidding for certain contracts with the UK government.
The announcement forms part of the UK government's drive to tackle corruption and was timed to coincide with the Anti-Corruption Summit hosted by David Cameron in London in May 2016.
Whilst few details were given, it appears from the announcement that the intention is:
- to create a public register of who really owns overseas companies similar to the newly introduced register of persons with significant control required to be maintained by companies incorporated in England and Wales;
- the proposals will apply equally to overseas companies that already own property here and those that are looking to acquire property here; and
- overseas companies bidding for certain contracts from the UK government will also be required to join and maintain details on the register.
The announcement stated that "the new register for foreign companies will mean corrupt individuals and countries will no longer be able to move, launder and hide illicit funds through London's property market, and will not benefit from our public funds".
Whilst the measures will be aimed at tackling corruption, if implemented they will also impact on legitimate overseas investors, who may have concerns about the fact that the register will be open to the public.
Further updates will follow as and when the proposals are taken forward. However, it is possible that there may be further consultation regarding implementation in due course. For the time being, these proposals will be of interest to overseas companies that have, or are looking to have, exposure to property in England and Wales or that may be looking to bid for contracts with the UK government in the future.
Read the Prime Minister's Office press release here.