Nominee Ownership: What Happens When You Buy Property in a Local's Name

Published on: August 19, 2026

Last verified: 19 August 2026. Enforcement practice in these jurisdictions is changing quickly; verify the current position with independently instructed local counsel.

Quick answer: A private agreement cannot overrule a land register, and where its purpose is to defeat a nationality restriction, courts frequently treat it as void from the beginning. In Indonesia the arrangement is null by operation of law and the land reverts to the State. In Thailand and the Philippines using a front to evade the restriction is a criminal offence for both parties, and Thai registration orders effective January and April 2026 now demand evidence that Thai shareholders funded their own shares. Most failures are not enforcement, though: the nominee dies, divorces, is sued, or simply refuses. Every one of these markets has a lawful route instead.

In a lot of the world's most attractive places to own a home, foreigners cannot own land. Not through a visa, not through an investment threshold, not through marriage. The prohibition is often constitutional, and it has survived decades of pressure.

Where a legal ban meets sustained foreign demand, an informal workaround appears. A local citizen appears on the title. A private agreement, or a stack of them, is supposed to give the foreign buyer the real control. The arrangement has a different name in every market, and the sales pitch is identical everywhere: everybody does this, it has worked for twenty years, our lawyer has done hundreds.

This article is about what actually happens to those structures, and about the fact that in 2026 the answer changed materially in at least two major markets.

What a nominee arrangement is

Stripped of the local vocabulary, it is this: someone who is legally permitted to own the asset appears on the public register as owner, while a foreign buyer supplies the money and expects to keep the benefit and control, usually supported by private side documents.

That is the whole idea, and it is the reason it does not work. Every land registration system in the world exists to answer one question authoritatively: who owns this? A private agreement between two people cannot overrule the register, and when the purpose of that agreement is to defeat a nationality restriction, courts do not merely decline to enforce it. They frequently treat it as void from the beginning, which is a stronger and much worse outcome for the foreign buyer.

Note on what follows. The sections below describe legal frameworks and enforcement, and set out lawful alternatives. Nothing here explains how to construct such an arrangement, and nothing here should be read as suggesting any version of one can be made safe.

Thailand

Thai law restricts land ownership to Thai nationals and Thai-majority entities, with narrow exceptions that are rarely used in practice. The long-standing workaround was a Thai company with a majority of Thai shareholders holding land while control and economic benefit sat with a foreigner.

Section 36 of the Foreign Business Act prohibits Thai nationals from holding shares to conceal foreign control, and the penalties reach both sides of the arrangement: imprisonment of up to three years and fines in the range of 100,000 to 1,000,000 baht, alongside dissolution orders.

What changed is enforcement. Through 2025 and 2026 the Department of Business Development moved from checking paperwork to checking substance:

• A registration order effective 1 January 2026 requires supporting evidence for Thai shareholders in relevant cases, including bank statements covering the period around payment for the shares.
• A further order effective 1 April 2026 requires Thai shareholders to appear in person for company amendments involving foreign participation, to declare their income and to sign forms referencing criminal liability. Power of attorney is no longer accepted for those transactions.

The evidential question is now simply: can the Thai shareholders show they funded their own shares? A structure where they never did cannot answer it.

Where land is found to be unlawfully held, the Land Code provides for forced disposal within a set period, and an investigation alone can freeze a property so that it cannot be sold or mortgaged while it runs. A proposal to replace forced sale with outright forfeiture to the State has been under study; at the time of writing it is not law, but its existence tells you the direction of policy.

The lawful route in Thailand remains a condominium unit held freehold in your own name within the building's 49 percent foreign quota, together with registered leasehold options. That is ownership registered to you, which is the opposite of a nominee arrangement. Our Thailand buyer guide covers the mechanics.

Indonesia and Bali

Freehold title, Hak Milik, is reserved for Indonesian citizens. Article 26(2) of the Basic Agrarian Law of 1960 provides that a transfer designed to circumvent that restriction is null and void by operation of law, with the land reverting to the State. This is not a penalty imposed after a hearing. It is the starting position.

The consequence is unusually stark. The registered Indonesian owner is the owner. Side agreements that contradict the register are unenforceable. Indonesian courts have annulled such arrangements, and the money paid is not recovered through the title system.

In February 2026, Bali's provincial government signed a regulation adding criminal sanctions at provincial level on top of the national civil voidness. Bali has also demonstrated a willingness to enforce against non-compliant development physically, with a well-publicised clearance of coastal structures in 2025.

The lawful routes in Indonesia are Hak Pakai, a right to use for a term that can extend to a maximum of 80 years through defined extensions and available to foreigners meeting permit and minimum-value conditions; Hak Sewa, straightforward leasehold; and a foreign investment company, PT PMA, holding a right to build. A 2025 procedural regulation streamlined the administration of these routes without changing who may own what. Our Bali and Indonesia guide sets out each title type.

The Philippines

The 1987 Constitution reserves land ownership to Filipino citizens and to corporations at least 60 percent Filipino-owned. The prohibition is enforced not only by the ownership rule itself but by the Anti-Dummy Law, Commonwealth Act 108 as amended, which criminalises the use of Filipino citizens or corporate devices to evade nationality restrictions and reaches arrangements where a foreigner exercises beneficial control.

Two points foreign buyers consistently get wrong:

Marrying a Filipino citizen does not confer the right to own land. The Filipino spouse may own; the foreign spouse may not, regardless of who paid.

A court will not necessarily unwind the deal in your favour. Where an arrangement was knowingly structured to defeat the constitutional prohibition, a foreign buyer can find that the courts decline relief altogether on grounds of illegality and public policy. Being the person who provided the money is not a defence and can be evidence.

The lawful route for a foreigner is a condominium unit, subject to the rule that foreign ownership in a single condominium project may not exceed 40 percent. Long-term leases and ownership of a building separately from the land it stands on are also recognised concepts, and are worth exploring with Philippine counsel rather than assumed. See our Philippines guide.

Note the practical consequence of the 40 percent cap on your exit: it limits who you can resell to, and a building already near quota is harder to sell out of.

Mexico: the case where the workaround is simply unnecessary

Mexico is the market where the nominee habit makes the least sense, because a lawful mechanism already exists.

Foreigners may not hold direct title within the restricted zone, broadly 50 kilometres from the coast and 100 kilometres from a border, which covers most of the destinations foreign buyers want. But the fideicomiso, a bank trust, was created precisely to allow foreign residential ownership in that zone, with the buyer as beneficiary holding the rights to use, improve, lease, sell and bequeath the property. It is renewable, it is registered, and it is entirely normal. Our fideicomiso explainer covers how it is set up.

Against that, putting a house in a friend's or partner's name buys you nothing and costs you every protection the trust would have given. It also runs into a separate Mexican problem: ejido land, communal agrarian land which cannot be sold as ordinary private property until it has been formally converted. Buying ejido land through an informal arrangement is one of the most common ways foreign buyers lose money in Mexico, and the paperwork often looks convincing.

The five ways these arrangements actually fail

Enforcement action is the risk people talk about. It is not the most common one. In practice, most nominee arrangements fail for ordinary human reasons.

1. The nominee dies. Their heirs inherit what the register says they owned, which is your house. Those heirs did not sign your side agreement, may not know it exists, and may not accept it. This is the single most frequent failure mode and it is entirely predictable, because everybody dies.

2. The nominee's circumstances change. A divorce brings the property into a marital estate. A bankruptcy or a judgment brings creditors to a registered asset. A tax debt attaches to the registered owner. None of these people are bound by your private paperwork.

3. The nominee simply refuses. They decline to sign a transfer, or they mortgage the property, or they sell it to a third party who buys in good faith from the registered owner. Your remedy is litigation, in a foreign language, in a foreign court, on a contract the court may hold void.

4. You cannot exit. Even where nothing has gone wrong, you will eventually want to sell. A buyer with a competent lawyer will not take on the structure, and a buyer without one is not the buyer you want. Nor can you mortgage the property, or insure it cleanly, or use it as collateral. The asset is illiquid by construction.

5. Enforcement finds you. Beneficial ownership registers, automatic exchange of financial information, anti-money-laundering checks on the money that funded the purchase, and, increasingly, data matching on rental platform income all point at the same gap between who owns the asset on paper and who receives its benefit. For a foreign national, consequences can extend to immigration status, not only to the property.

Red flags in a sales pitch

• "Everyone does it this way here."
• "Our lawyer sets up the structure, it is included in the price."
• The seller or agent supplies the nominee, or recommends one.
• You are asked to sign a bundle of documents you have not had translated, including undated ones.
• You are told a lease, an option, a power of attorney and a loan agreement together will make the arrangement safe.
• Your independent lawyer is discouraged, or the agent offers to recommend one instead.
• There is time pressure attached to a deposit.
• Nobody will put in writing what happens if the nominee dies.

The last one is the fastest test available. Ask that question in an email and read what comes back.

If you are already in one

This article cannot tell you what to do, because the answer depends on the country, the documents, how the money moved, how long ago, and what the property is being used for. What can be said generally:

• Get advice from a lawyer with no connection to the arrangement. Not the firm that set it up, not one the agent recommends, not the notary who registered it. In several of these jurisdictions the professionals who assembled these structures have their own exposure.
• Do not act unilaterally first. Transfers, restructurings and sales can each carry tax, criminal and immigration consequences, and the order of steps matters.
• Gather the documents now, including proof of the money trail. Reconstructing a payment history from ten years ago is far harder than pulling it from your own records today.
• Understand that timing is a factor. Where jurisdictions are actively tightening enforcement, the range of available options tends to narrow rather than widen.

Frequently asked questions

Is a nominee arrangement illegal, or just risky?
It depends on the country, and both can be true at once. In Indonesia the arrangement is void as a matter of law. In Thailand and the Philippines using a front to evade a nationality restriction is a criminal offence, with penalties for the local participant as well as the foreigner.

What if the nominee is my spouse or my child?
The legal analysis does not change because you trust the person. Prohibitions are drafted around the purpose of the arrangement, not the relationship, and in the Philippines marriage to a citizen expressly does not confer land ownership on the foreign spouse. The human failure modes, death, divorce and creditors, apply to family too.

Can a well-drafted lease and power of attorney make it safe?
No. Where the objective of the package is to give a foreigner what the law says they cannot have, the package inherits the defect. A power of attorney is generally revocable and typically lapses on the death of the person who granted it.

Which countries actually allow foreigners to buy?
Most of them, on some basis. Restrictions are usually specific to land, to agricultural land, to border zones, or to a percentage of a building, rather than absolute. Our master table of foreign property ownership restrictions by country sets out where the lines fall.

How do I find a lawyer who is genuinely independent?
Instruct and pay them yourself, before you sign anything, and do not take the recommendation from the person selling you the property. Our guide on hiring a real estate lawyer abroad covers the questions to ask.

The underlying point

Foreign ownership restrictions are usually not oversights waiting to be worked around. They are deliberate policy, frequently constitutional, and they have withstood decades of commercial pressure precisely because they are popular domestically. Structures built to defeat them are not clever; they are conspicuous, and they are increasingly being looked at directly.

In nearly every one of these markets there is a legal channel: a condominium unit in your own name, a registered long lease, a use right, or a regulated trust. These routes give you less than freehold. They also give you something a nominee arrangement never does, which is a document that a court, a bank and a future buyer will all recognise.

Keep reading on JanusHermes

The lawful route in a restricted market is usually narrower than freehold and always more durable than a side agreement. JanusHermes lists property from local agencies in 11 languages, with the local agency's own contact details on every listing.

For the country detail, see Thailand, Bali and Indonesia, the Philippines and the Mexican fideicomiso. For the wider picture, read foreign ownership restrictions by country, why countries ban foreign buyers and leasehold versus freehold. Before you sign anything, see how to hire a real estate lawyer abroad and the international real estate scam atlas.

This article is general information as at August 2026 about how nationality-based property restrictions and anti-circumvention rules operate. It is not legal advice, creates no advisory relationship, and must not be relied on in relation to any specific property, structure or transaction. Laws, enforcement practice and pending amendments change quickly in every jurisdiction discussed. Anyone who owns or is considering property in these markets should take advice from an independently instructed lawyer qualified in that country. JanusHermes accepts no liability for actions taken based on this content.

Primary sources: Thailand's Land Code and Foreign Business Act, Section 36, together with Department of Business Development registration orders effective 1 January 2026 and 1 April 2026; Indonesia's Basic Agrarian Law of 1960, Article 26(2), and the Bali provincial regulation signed in February 2026; the Philippine Constitution of 1987 and the Anti-Dummy Law, Commonwealth Act 108 as amended; and Mexican foreign investment legislation governing the restricted zone and the fideicomiso, together with agrarian law on ejido land.