Can an Offshore Company Own Property in Great Britain?

The new Foreign Company Register will clarify the situation with offshore companies owning real property in the UK. The new Register became effective on February 1, 2023 and it contains a lot of interesting information about the owners of British flats, houses, villas, and other property.

Where do companies that buy property in the UK come from?

According to the official statistics, 32,440 offshore companies own nearly 100,000 pieces of real property in Great Britain including land plots.

As of February 1, 2023, 19,790 foreign companies reported to the Register that they had property in the UK. These companies own over 56,000 pieces of property of the total value of 6.7 billion pounds. These figures are a bright indication of the popularity of the use of an offshore company to buy property in Great Britain.

The analysis of the data from the Foreign Company Register shows that there are 14,000 beneficial property owners, of which 3,190 control more than one offshore company. The most popular jurisdictions where foreign company owners come from are listed in the table below.

Jurisdiction	Number of companies	%
British Virgin Islands (BVI)	5,938	30.22%
Jersey	3,998	20.35%
Isle of Man	2,283	11.62%
Guernsey	1,579	8.04%
Luxembourg	733	3.73%
Seychelles	499	2.54%
Gibraltar	477	2.43%
Hong Kong	411	2.09%
Panama	396	2.02%
Cyprus	349	1.78%
USA	210	1.07%
Bahamas	210	1.07%
Other	2,568	13.07%

As you can see, over 60% of offshore companies owning property in the UK are registered in British overseas territories of the BVI, Jersey, and the Isle of Man.

Regions of the UK where offshore companies buy property

Bloomberg analysts have studied the British Land Cadaster and compiled a list of UK regions where offshore companies often buy property. Please find the list below:

UK region	Approximate number of property pieces
Greater London	41,200
South East	14,700
North West	10,700
Yorkshire and Humber	5,700
South West	5,100
West Midlands	4,400
East Midlands	3,900
North	2,500
East of England	2,400
Wales	2,200

Using offshore companies to conceal the names of real property owners in Great Britain

According to Transparency International UK research, nearly 90,000 pieces of real property in the country belong to anonymous (or unknown) owners notwithstanding the new regulations on property ownership transparency. The researchers are speaking about 18,000 foreign companies whose ultimate beneficial owners are unclear. Some of them have simply ignored the new requirements and submitted no information at all while others submitted insufficient information to identify the company UBOs.   

Let us remind you that from February 1, 2023, all foreign companies that own real property in the UK have to submit the information about their UBOs to the Register of Foreign Companies.

Confidentiality of property ownership is an important factor for some people because it helps protect the assets that they have. This is why investors often try to find a way to keep the property ownership information secret. Below we list five methods of concealing the information used by foreign property owners in the UK.

The owner refuses to submit the information pointblank  

This is not the best way to go. The property owner will face a fine of £2,500 and he/ she won’t be able to sell the property or let it on a lease. There can be other unpleasant consequences too.

The property is owned by an offshore company whose UBOs are impossible to identify

If you want to buy property through a company, you have to identify the ultimate beneficial owner of this company, in accordance with the British regulations. Now, if the company that is buying property belongs to another company, you can indicate the second company as the UBO of the first company. This is sort of legal. ‘Sort of’ because the ownership chain remains incomplete: the UBOs of the second company are still unknown.

According to the official data, 3,151 foreign companies owning property in the UK have indicated at least one offshore company as their beneficial owners. Most of these companies are registered in such offshore jurisdictions as Jersey and the British Virgin Islands.

Here is a real life example: BVI-registered Lengard Projects Ltd owns a flat in Chelsea Harbour residential complex in Hammersmith, and the company’s UBO is Ics4 Holdings Investment Ltd also registered in the BVI.  

Trusts are indicated as company owners

Trusts are often used to control the offshore companies that own property in the UK. This is one more method of concealing the names of the UBOs. According to Transparency International UK analysts, the Register of Foreign Companies contains the names of 1,600 ultimate beneficial owners who act as trustees for more than 4,000 companies. This means that a trust controls the foreign company that owns UK property, in its turn. The legislation allows companies to indicate trustees as their ultimate beneficial owners.  

One more real life example: a company registered in the Isle of Man owns a piece of real estate in Great Britain. The company is held in trust and the trust is also registered in the Isle of Man.

Please find out more about the use of trusts for asset protection by following the link.

‘Managing directors’ are indicated as company owners

Some foreign companies owning property in the UK pretend that their UBOs cannot be identified. In this case, the legislation allows listing a ‘managing director’ as the company owner and 2,358 companies have made use of this legal opportunity.

Service providers are indicated as company UBOs

The law does not prohibit listing foreign attorneys, accountants, or managers as company owners. Some companies owning property in Great Britain use this opportunity but it is hard to say if these attorneys, accountants, etc. are true company owners or they are nominee owners only. 

Requirements to offshore companies wishing to own real property in the UK

As you can see, the answer to the question in the title of the article is affirmative. An offshore company can own property in Great Britain. Moreover, many offshore companies do own property there! However, they have to meet certain requirements to be able to become property owners in the UK:

• The company has to be registered with the UK corporate register, follow all the corporate rules, do the reporting, pay the taxes, and so on.  
• The company has to have a representative in Great Britain who will serve as a point of contact for the UK state agencies.

In addition to that, offshore companies owning real property in Great Britain have to pay an additional tax on the land that they purchase. The new requirement was introduced in 2021 and it is referred to as ‘non-resident’s extra’. Non-residents of Great Britain are charged 2% extra when they buy residential property in the country and pay the stamp duty.  

Owning real property through an offshore company will bring about different tax obligations depending on the country where the property is located as well as the country where the company is registered. However, writing foreign property in the name of an offshore company (rather than your personal name) has several important advantages without any doubt. If you would like to choose the best offshore jurisdiction to register a company there, open a corporate bank account, and use the company to buy property in foreign countries, please write to info@offshore-pro.info and request our assistance in the matter.