Why nominee or straw-man arrangements are risky or illegal, what happened in Thailand and elsewhere, and the lawful routes: condo quota, leasehold and compliant company rules.
In some countries foreigners cannot own certain property, usually land. A recurring answer from sellers and agents is an arrangement in which a local person, or a local company controlled by locals only on paper, holds the title, and the foreigner pays for it and relies on side agreements. This is called nominee or straw-man ownership. It is a legal risk for the buyer at best and a crime at worst. This article explains why, gives the example of Thailand and then describes lawful ways to buy. It is informational, not legal, tax or investment advice, and it does not describe how to get round any rule. Local rules change, so check them with an independent local lawyer.
What a nominee arrangement is
Typically the title is registered in the name of a local citizen, a spouse, a friend or a company where local shareholders hold a majority of shares. The real buyer pays, uses the property and holds papers that say the nominee holds it for him or her: a loan, a lease, a power of attorney, a side letter, a share pledge or voting arrangement. The point of the arrangement is that the register does not show the foreigner.
Where a rule limits foreign ownership, a paper arrangement made to hide the true owner is generally treated as a way of getting round the rule. It can therefore be void or illegal, and the side agreements may be unenforceable. In plain terms, the buyer has paid for something that the law does not recognise as his or hers.
Thailand: the clearest example
Under the Thai Land Code a foreigner cannot generally own land. Legal commentary from law firms such as Luther and Tilleke describes an enforcement drive in 2025 and 2026 against nominee structures, coordinated between the Department of Lands, the Department of Business Development and the police. We could not open the Department of Lands' own announcement, so the following comes from those law-firm summaries.
- Penalties. Sources report that a foreigner who acquires land unlawfully, and a Thai person who acts as a nominee, can face imprisonment of up to two years and a fine of up to THB 20,000, and that a company can face a fine of up to THB 50,000. Land held in breach can be ordered to be disposed of, within a period reported as 180 days to one year.
- Detection. Authorities are reported to compare company registry data with tax data and to look at who funded the shares, who controls decisions and who receives the economic benefit. A majority of Thai shareholders on paper is not a safe harbour if the money and control are foreign.
- Consequences for buyers. The risks are loss of the property or the proceeds, a forced sale, criminal exposure for the nominee and for you, and a nominee who simply refuses to give the land back, because the law will not help to enforce a hidden arrangement.
Our guides to buying property in Thailand and the Thailand due diligence and scam checklist describe lawful routes in more detail.
Other places where the question appears
- Turkey. Foreigners may buy property under conditions, subject to rules on location, area and reciprocity, and some of these have changed over the years. We did not research the details for this article; check the current rules with a Turkish lawyer before using any company or third-party structure, and see Turkey property investment risks.
- Georgia. According to news and legal sources, agricultural land is restricted for foreigners and can be held only by citizens, the state or Georgian-owned entities. Other categories of property are open, as discussed in our Georgia guides. A Georgian entity controlled by a foreigner for the purpose of buying farmland is exactly the kind of structure to examine carefully before relying on it.
- Bulgaria. Before Bulgaria joined the EU in 2007, non-EU foreigners could not own land directly and local companies were the usual workaround. Sources describe a transitional period for EU citizens and farmland that ended in 2014, and the rules for non-EU buyers and agricultural land may still differ, so do not treat the old practice as a model. See EU and non-EU property.
Lawful ways to buy
The legal alternatives usually offered by the countries themselves are limited but real.
- Condominium or apartment quota. In Thailand, a foreigner may own units in a registered condominium up to 49% of the total unit area, with proof that the money came in from abroad as a foreign currency transfer. Check the quota and the required documents at the Land Department.
- Leasehold. Registered leases of up to 30 years are the usual route for a villa on land. Check the renewal clause, what happens at the end, and that the lease is registered, not only signed. Rights such as usufruct and superficies exist in Thai law as well; a local lawyer should explain what each does and does not give you.
- Company rules that are real, not nominal. In some countries a company with foreign shareholders may own certain property or land within its legal limits. Genuine means that the owners really are who the register says, the money comes from them and the company runs an actual business. If the only reason for the Thai shareholders is to meet a percentage, the structure is likely the kind the authorities are targeting.
- Choose a different country or product. If a country does not allow what you want, another one may, with the same budget. Our country comparison helps with a first screen.
- Family and co-ownership. In some countries a spouse or relative who is a citizen can lawfully own property in their own name. That is lawful only if it reflects a genuine arrangement and the rules on gifts, matrimonial property and inheritance are respected; take advice.
If you already hold a property through a nominee
Do not try to fix it by yourself with new side agreements. Ask an independent local lawyer, who does not act for the nominee or the seller, what your position is and whether the structure can be regularised. Keep records of the payments and contracts. Some countries have procedures for voluntary correction; availability and consequences differ, and we cannot judge them from here.
FAQ
Is nominee ownership always illegal? Not everywhere and not in every form. Where a rule limits foreign ownership and the arrangement hides the true owner, it is generally treated as circumvention. Local law decides, so ask a lawyer.
Is a 51% Thai company a safe way for a foreigner to own land? Reports say authorities now look at who provided the money and who controls the company, so Thai majority shareholders on paper do not make it safe.
Can a side agreement protect me? In nominee cases the courts often will not enforce it, because it supports something the law prohibits. Do not rely on it.
What is the legal way to have a home in Thailand? Common routes are a condominium unit within the foreign quota or a registered long leasehold. Verify the conditions at the Land Department.
Does this affect only Thailand? No. Any country that restricts foreign ownership has a similar risk; Thailand is simply the best documented at the moment.
How we help
We are a trilingual platform that finds properties and coordinates independent local lawyers who can explain what a foreign buyer can lawfully own in a given country. We do not arrange or advise on nominee structures. This article is informational and is not legal, tax or investment advice; rules and enforcement change, so verify the current rules before you buy.