How to Buy a Commercial Property: 9 UK Steps for Foreign Companies, From ROE to SDLT

Can a foreign company buy property in the UK? The short answer

Yes: a company formed outside the UK can buy and own UK commercial property, but it must first register on the Register of Overseas Entities and must then account for UK tax on its income and gains from that property. Companies House describes registration as what an overseas entity needs so it can buy, sell or transfer UK land, and HMRC's guidance confirms that a non-resident company can own and let UK property in its own name.

The obligations attach to the type of buyer rather than to the property. Companies House guidance says overseas entities must register before they buy, sell or transfer property or land in the UK, and that an "overseas entity" means any legal entity governed by the law of a country outside the UK, including the Republic of Ireland.

On tax, the position changed decisively between 2019 and 2020. Since April 2019, gains made by overseas companies on UK non-residential property have been taxable in the UK, and since April 2020 their UK rental income has been charged to Corporation Tax rather than Income Tax, according to HMRC's policy paper on the tax implications of the register. The same paper confirms that HMRC will use register data to identify non-compliance.

Residential property sits under a different and harsher set of rules for companies, including a 15% flat rate of Stamp Duty Land Tax on some purchases, the Annual Tax on Enveloped Dwellings and a non-resident surcharge. Our earlier analysis of the rules for foreigners buying property in 10 countries covers the residential picture; this guide is about offices, retail, industrial and other non-residential premises.

How to buy a commercial property in the UK: the 9 steps at a glance

The process for a foreign company runs in nine steps, and the order matters because two of them, overseas entity registration and evidence of corporate capacity, must be finished before completion or the land registry will reject the application to register the buyer as owner. The table below is the checklist most cross-border deal teams work from, with the official source behind each requirement.

Step	What happens	Key rule or deadline
1. Choose the buying vehicle	Decide whether the overseas company buys directly or through a UK subsidiary	A UK-managed company may be UK tax resident
2. Register the overseas entity	Companies House registration with verified beneficial owners	Verification within 3 months before registration; £250 fee
3. Due diligence	Title, leases, planning, survey and seller checks	Seller that is an overseas entity needs an Overseas Entity ID
4. VAT position	Check whether the seller has opted to tax and whether a going concern transfer applies	Option to tax notified within 30 days of the decision
5. Exchange and completion	Contracts exchanged, price paid, transfer completed	SDLT return and payment within 14 days of completion
6. Land registry	Register the company as proprietor	Valid Overseas Entity ID plus evidence of corporate powers
7. Register for Corporation Tax	Tell HMRC about the UK property business	No automatic registration for businesses started after 5 April 2020
8. Keep the register current	Annual overseas entity update statement	Filed no later than 14 days after the due date
9. Plan the exit	Report gains on sale or on a sale of the holding company	Corporation Tax on gains since April 2019

Step 1: choose the buying vehicle

The first decision is whether the overseas parent buys the property in its own name or sets up a UK company to hold it, and the choice changes which registration and tax rules apply. A UK-incorporated company is not an overseas entity, so it does not go on the Register of Overseas Entities, although it has its own UK company law filings.

Buying directly through the foreign company keeps the structure simple and is common where the investor already has a holding company it wants to use. The trade-off is that the company must register as an overseas entity, keep that registration current every year, and file UK Corporation Tax returns on its property profits. HMRC's guidance for non-resident company landlords adds that such a company does not need to register with Companies House unless it has a permanent establishment in the UK, so passive ownership of a let building does not by itself create a UK branch filing.

Two traps sit in this choice. First, where the company actually deals in or develops UK land, HMRC warns that it may have created a UK permanent establishment, and since 5 July 2016 disposals of UK land by non-UK companies dealing in or developing it have been subject to UK Corporation Tax. Second, a foreign-incorporated company that is in fact centrally managed and controlled in the UK, for example by UK resident directors, will be treated as UK tax resident and taxed on its worldwide profits, subject to any double tax treaty. Board meetings, decision-making and signing therefore need to happen where the company is meant to be resident; our guide to UK tax residence tests for individuals explains why directors' own residence can matter here.

The wider question of whether to operate through a branch or a subsidiary when expanding abroad applies just as much to property as to trading businesses. Lenders may also have views on which entity borrows and grants security, and those requirements are worth agreeing with banking and finance lawyers before the structure is fixed.

Step 2: register the overseas entity at Companies House

An overseas company cannot be registered as owner of UK land without an Overseas Entity ID, which it only receives by registering on the Register of Overseas Entities and disclosing its registrable beneficial owners. This is the step that most often delays foreign buyers, because it depends on a UK-regulated agent completing identity checks first.

Who counts as a beneficial owner

Companies House guidance defines registrable control as holding more than 25% of the shares or voting rights, having the right to appoint or remove a majority of the directors, or exercising significant influence or control. If no beneficial owner can be identified, the entity must instead report its managing officers, such as directors, managers or the company secretary. Where a beneficial owner is a trustee, information about the trust must also be given.

Verification, fee and the Overseas Entity ID

Before the application is filed, a UK-regulated agent supervised under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 must verify every beneficial owner and managing officer, and those checks must be completed no more than 3 months before registration. The agent needs an agent assurance code from Companies House. The registration fee is £250, refunded if the application is rejected. Once registered, the entity receives a unique Overseas Entity ID, which must be given to the land registry whenever it buys, sells, transfers, leases or charges UK land.

The obligation does not stop at completion. An overseas entity update statement is due one year after registration and every year after that, filed no later than 14 days after the due date. Companies House warns that an entity that does not comply could face a fine, a prison sentence or both, and restrictions on buying, selling, transferring, leasing or charging its land. With regulators across the world stepping up anti-money laundering and sanctions enforcement, banks and agents now treat a clean register entry as a basic condition of doing business.

What changed on 9 July 2026

The register is becoming more transparent. According to Mishcon de Reya's summary of targeted amendments that came into force on 9 July 2026, members of the public applying to see protected trust information no longer need to name the trust, the registrar can release other trust details while protecting a minor's data, and individuals no longer have to supply evidence to suppress a residential address. Investors that hold through trusts should assume their structure will be visible to interested parties, and to HMRC. The Tax Policy Associates study found that 21% of offshore companies owning property in England and Wales listed only a trustee as beneficial owner, the largest category of hidden ownership it identified.

Step 3: due diligence on the property and the seller

Due diligence for a foreign buyer covers everything a domestic buyer checks, title, leases, planning and the physical state of the building, plus one extra question: whether the seller is itself an overseas entity that can lawfully transfer the property. Commercial investors usually instruct a UK property lawyer to report on title and a chartered surveyor to report on condition and value.

Checking an overseas seller

HM Land Registry's Practice Guide 78, updated on 21 September 2026, explains that a restriction is entered on the title of every overseas entity registered as proprietor, so no transfer, lease of more than seven years or charge by it can be registered unless it has a valid Overseas Entity ID or a conveyancer certifies that an exception applies, on certificate OE1 or OE2. A buyer from an offshore seller should therefore insist on seeing the seller's Overseas Entity ID before exchange; without it, the buyer may pay the price and then be unable to register its own title.

Leases and qualifying estates

The register rules apply to "qualifying estates": freeholds, and leaseholds granted for more than seven years. A foreign company taking a long lease of a headquarters building is caught in the same way as one buying the freehold. If the property is let to tenants, the lease terms, rent review dates and break clauses drive its value, and disputes over them are heard in the specialist courts described in our explainer on the new Business and Property Division.

Seller solvency also matters. Buying from a company in financial difficulty, or from an administrator, changes the warranties and title guarantees available, as our guide to what happens when a company goes into administration explains.

Step 4: settle the VAT position and the option to tax

Sales and lettings of commercial land and buildings are normally exempt from VAT, but a seller that has opted to tax must charge VAT on the price unless the deal qualifies as a transfer of a going concern. Getting this wrong can add VAT to the price or cost the seller its recovery, so it is settled in the heads of terms.

HMRC's VAT Notice 742A, last updated on 26 May 2026, explains that once an owner opts to tax, its supplies of that land or building normally become taxable. An option must normally be notified to HMRC within 30 days of the decision, can be revoked within a 6-month cooling-off period only if strict conditions are met, and otherwise cannot normally be revoked until at least 20 years have passed. The notice also explains that where the seller is VAT-registered and the sale is a going concern transfer, the buyer must be, or become, a taxable person for VAT purposes.

Where the building is sold with tenants in place and the buyer carries on the same letting business, the sale can be a transfer of a going concern, which is outside the scope of VAT. For land, Notice 742A adds two conditions where the seller has opted to tax: the buyer must have opted to tax and notified HMRC on or before the relevant date, and must tell the seller that its option will not be disapplied under the anti-avoidance rule. Missing either condition turns a VAT-free deal into a taxable one. These are points to clear with tax advisers before exchange.

Step 5: exchange, completion and Stamp Duty Land Tax

On completion in England or Northern Ireland, the buyer pays Stamp Duty Land Tax at non-residential rates, which rise in bands to 5% of the price above £250,000, and must file a return within 14 days. Foreign companies pay the same commercial rates as UK buyers: the 2% surcharge for non-UK residents applies only to residential property.

The non-residential rates

Under the official SDLT rates for non-residential and mixed land and property, nothing is due on the first £150,000, 2% applies on the next £100,000 and 5% on the remainder above £250,000. A return is still required for most transactions below £150,000. Mixed-use property, such as a shop with a flat above, is charged at these rates too.

Price of freehold commercial property	SDLT on the band	Total SDLT
£150,000	0% on the whole amount	£0
£275,000 (HMRC's own example)	£2,000 at 2% plus £1,250 at 5%	£3,250
£1,000,000	£2,000 at 2% plus £37,500 at 5%	£39,500
£5,000,000	£2,000 at 2% plus £237,500 at 5%	£239,500

New leases and devolved taxes

When a company takes a new non-residential lease, SDLT is charged on any premium at the rates above and separately on the net present value of the rent over the term: nothing on the first £150,000, 1% on the portion from £150,001 to £5,000,000, and 2% above that. A lease whose rent has a net present value of £1,000,000 would therefore carry £8,500 of SDLT on the rent. Assigned (existing) leases are charged only on the price paid.

SDLT applies only in England and Northern Ireland. Property in Scotland carries Land and Buildings Transaction Tax and property in Wales carries Land Transaction Tax, each with its own rates, so an investor looking at Scotland needs separate local advice. Your conveyancer will normally file the return and pay the tax on completion day.

Step 6: register the title at HM Land Registry

The purchase is only protected once HM Land Registry has registered the foreign company as proprietor, and it will not do so without a valid Overseas Entity ID and evidence that the company exists and has power to hold land. Practice Guide 78 states plainly that if a valid ID is not provided, the application will be rejected, and the ID must be valid at the date of the application.

Evidence of corporate status

Rule 183 of the Land Registration Rules 2003 requires one of two forms of evidence with the first application by an overseas company: a certificate in Form 7 completed by a qualified lawyer practising in the country of incorporation, or a certified copy of the company's constitutional documents. Anything not in English or Welsh must come with a certified or notarised translation. A legal opinion letter is accepted only if it gives all the Form 7 information and is neither qualified nor conditional.

Signing the transfer

An overseas company can execute a deed in any manner permitted by the law of its place of incorporation, under regulation 4 of the Overseas Companies Regulations 2009 (OCR 2009), but the registry will want evidence, which may be a letter from a lawyer familiar with that law, that the method used is effective. If the company signs through an attorney appointed under a foreign power, the registry requires a certified copy of the power and an unqualified legal opinion from a lawyer in the country of incorporation confirming that execution by attorney is permitted and that the power was valid when used. Organising certified copies, translations and opinions from abroad can take time, so it should start alongside due diligence. Advisers with the right local and UK experience can be found among legal experts in England.

Steps 7 and 8: tax and filings while you hold the property

Once the building is let, the foreign company pays UK Corporation Tax on its rental profits and must keep its overseas entity registration up to date every year. Both obligations are easy to miss because nothing in the purchase process triggers them automatically.

Registering for Corporation Tax

HMRC's guidance states that from 6 April 2020 non-UK resident companies pay Corporation Tax instead of Income Tax on profits from UK property, and that companies starting a UK property business on or after that date are not automatically registered. The company must therefore notify HMRC, obtain a Company Unique Taxpayer Reference and file Company Tax Returns using commercial software, since the free HMRC filing service cannot be used.

The main rate of Corporation Tax is 25% for profits above £250,000, with a 19% small profits rate at £50,000 or less and marginal relief in between. Those thresholds are reduced for short accounting periods and by the number of associated companies, which in a multinational group can be large. Because rental profits are now taxed under Corporation Tax rules, HMRC points out that interest deductions may be restricted under the Corporate Interest Restriction and transfer pricing rules, which matters for a building financed with shareholder loans.

What does not apply to commercial property

The Annual Tax on Enveloped Dwellings, which since 1 April 2016 has applied to company-owned residential property worth over £500,000, does not reach offices, shops or warehouses. Family investors should still consider estate planning: the rules on how long you must live outside the UK to avoid inheritance tax can affect the shareholders even when the company itself pays only Corporation Tax.

Step 9: selling or restructuring later

A foreign company that later sells UK commercial property pays UK Corporation Tax on the gain, and the same applies, in many cases, when it sells shares in a company whose value comes mainly from UK land. The exit therefore needs planning at the point of purchase.

HMRC's guidance on reporting gains on UK property or land by non-residents, last updated on 13 January 2026, confirms that non-resident companies pay Corporation Tax on gains from UK land and report them on a Corporation Tax return. Non-residential property is expressly in scope. An indirect disposal is caught where the asset sold derives 75% or more of its gross value from UK land and the seller has at least a 25% interest, counting connected persons. Selling a property-rich holding company is therefore not a way around the charge.

The register matters at exit too. Because the land registry will not register a transfer by an overseas entity without a valid Overseas Entity ID, a company that has let its registration lapse, or failed to file its annual update, may find that its buyer cannot complete. Removal from the register is only possible once the entity is no longer a registered owner of UK land.

Common mistakes foreign companies make

Most problems in cross-border commercial purchases come from timing rather than law: a requirement that is simple on its own becomes a crisis when it surfaces in completion week. The recurring errors are these.

• Starting overseas entity registration too late. Verification must be done within 3 months before filing, and the registry rejects applications without a valid ID.
• Not checking the seller's status. An offshore seller without an Overseas Entity ID, or an OE1 or OE2 certificate, can leave the buyer unable to register title.
• Unqualified legal opinions that turn out qualified. The registry will not accept a conditional opinion on corporate powers or a foreign power of attorney.
• Assuming VAT will not apply. A missed option to tax notification can turn a going concern transfer into a taxable sale.
• Forgetting Corporation Tax registration. New UK property businesses are not registered automatically.
• Managing the company from London. UK central management and control can make the whole company UK tax resident.
• Ignoring enforcement abroad. If a tenant or seller defaults, judgments may need to cross borders; see our guide to enforcing a foreign judgment.

When to bring in an adviser

Every UK commercial purchase by a foreign company needs a UK property lawyer for title, contract and registration, and most also need a tax adviser for VAT, SDLT and the Corporation Tax position, plus a lawyer in the home jurisdiction for the Form 7 certificate or legal opinion. The UK-regulated agent who verifies beneficial owners can be an individual or a firm, such as a financial institution or legal professional.

The point at which advice pays for itself is before heads of terms are signed, when the buying vehicle, VAT treatment and financing structure can still change without cost. Corporate INTL's directory lists real estate and property lawyers worldwide, including real estate advisers in the United Kingdom, so a foreign buyer can pair a UK property team with counsel in its own jurisdiction.

Related guides for cross-border investors

Buying UK commercial property is usually one part of a wider expansion plan. These Corporate INTL guides cover the decisions that sit alongside it.

Guide	Why it matters to a property buyer
Can foreigners buy property abroad?	Residential ownership rules in 10 countries, including the UK
Branch vs subsidiary	Choosing the vehicle that will hold the building
How to open a business in Dubai	For Gulf-based groups setting up a holding company first
How to become non resident for UK tax	Residence tests that affect directors and shareholders

Frequently asked questions

Can a foreign company buy property in the UK?

Yes. A company incorporated outside the UK can buy and own UK commercial property in its own name. It must first register on the Register of Overseas Entities and obtain an Overseas Entity ID, which HM Land Registry needs before it will register the company as owner, and it must then pay UK tax on rent and gains.

Do non-residents have to pay stamp duty on commercial property?

Yes, at the same non-residential rates as UK buyers: nothing on the first £150,000, 2% on the next £100,000 and 5% above £250,000. The 2% surcharge for non-UK residents applies only to residential property in England and Northern Ireland, so it does not affect offices, shops or warehouses.

How much is stamp duty when a company buys commercial property?

A company pays the standard non-residential rates. HMRC's own example of a £275,000 freehold produces £3,250 of SDLT. On a £1,000,000 building the tax is £39,500. New leases also attract SDLT of 1% on rent with a net present value between £150,001 and £5,000,000, and 2% above that.

How do I register a beneficial owner on the Register of Overseas Entities?

The overseas entity applies online to Companies House, naming everyone with more than 25% of shares or votes, the right to appoint most directors, or significant influence. A UK-regulated agent must verify them within 3 months before filing, and the fee is £250. Trust details must be given if a beneficial owner is a trustee.

Does a foreign company need a UK company to buy property?

No. The overseas company can buy in its own name. HMRC says a non-resident company landlord does not need to register with Companies House unless it has a UK permanent establishment, although it must still register on the Register of Overseas Entities and for Corporation Tax. Some investors still choose a UK subsidiary for financing or management reasons.

What tax does a foreign company pay on UK rental income?

Since 6 April 2020, non-UK resident companies pay Corporation Tax, not Income Tax, on UK property profits. The main rate is 25% on profits above £250,000, with a 19% small profits rate at £50,000 or less. Interest deductions may be limited by the Corporate Interest Restriction and transfer pricing rules.

Does a foreign company pay tax when it sells UK commercial property?

Yes. Since April 2019, non-resident companies have paid Corporation Tax on gains from UK non-residential property. Selling shares in a company that derives 75% or more of its value from UK land can also be taxed, where the seller holds at least a 25% interest, so routing a sale through a holding company does not avoid the charge.

Is VAT charged on UK commercial property?

Not automatically. Sales and lettings of commercial property are normally exempt, but if the seller has opted to tax, VAT applies unless the sale is a transfer of a going concern. For that relief, the buyer must have opted to tax and notified HMRC by the relevant date and confirmed its option will not be disapplied.

What happens if an overseas entity does not register?

It cannot be registered as owner, and HM Land Registry will reject its application. A restriction on the title also blocks registration of any later sale, long lease or charge by it. Companies House warns that non-compliance can lead to a fine, a prison sentence or both, alongside the practical inability to deal with the property.

Sources

1. Companies House: Register an overseas entity and its beneficial owners (updated 1 February 2026)
2. HM Land Registry: Practice guide 78, overseas companies and limited liability partnerships (updated 21 September 2026)
3. GOV.UK: Stamp Duty Land Tax rates for non-residential and mixed land and property
4. HMRC: Tax implications of the Register of Overseas Entities (16 December 2022)
5. HMRC: Paying Corporation Tax if you're a non-resident company landlord
6. HMRC: Tell HMRC about Capital Gains Tax on UK property or land if you're not a UK resident (updated 13 January 2026)
7. GOV.UK: Corporation Tax rates and reliefs
8. HMRC: Opting to tax land and buildings, VAT Notice 742A (updated 26 May 2026)
9. Tax Policy Associates: Who secretly owns Britain? (29 January 2026)
10. Mishcon de Reya: Register of Overseas Entities, targeted amendments to protected trusts (6 August 2026)

About this article

This guide was researched and written by The Corporate INTL Newsroom, which covers cross-border legal, regulatory and business developments for lawyers, professional advisers and financiers in over 150 jurisdictions. It has been checked against Companies House and HM Land Registry guidance, HMRC's published rates and manuals, and primary research on overseas ownership of UK property. SDLT figures above £275,000 are our own calculations from the official rate bands. It covers the position in England and Wales, with notes on Scotland and Northern Ireland, and does not cover residential property. This article is general information, not legal or tax advice; for advice on a specific transaction, consult a qualified adviser. Last reviewed 25 October 2026. For more analysis like this, visit the Corporate INTL newsroom or subscribe to Corporate INTL.