The Department for Business, Energy and Industrial Strategy (DBEIS) said in a statement that the register will make it easier for law enforcement agencies to tackle money laundering while reducing opportunities for criminals to hide.
According to recent research by Transparency International, more than £4.2bn ($5.5bn, €4.7bn) worth of London properties have been bought with suspicious wealth.
Those who knowingly try to deceive the register by providing false information will face up to two years in jail and an unlimited fine, the department said.
Business minister Richard Harrington said: “While the vast majority of foreign companies which buy property in the UK do so legitimately, this world-leading register will help ensure the UK remains a great dependable place to work, invest and do business.”
5 years jail
A further penalty under the draft law places a ban on any foreign entity selling or leasing property without first publicly declaring its beneficial owner.
If an individual is found to have committed this offence they could face up to five years in jail and an unlimited fine
UK government minister for Scotland, Lord Duncan said: “For too long criminals have been able to use the property industry as a front for investing dodgy funds, hiding dirty money and evading the law. This stops now.”
The register follows the introduction of the Criminal Finances Act 2017, which is part of the UK government’s updated anti-corruption strategy.
This strategy looks to give more powers, such as unexplained wealth orders, to law enforcement agencies to help them seize the proceeds of crime.
More than £2bn of criminal assets have been recovered under the Proceeds of Crime Act 2002, while the government has recovered more than £3bn extra since 2010 through recovery under additional powers.