The Freehold Question: SPV, Lease or Nominee

The question a non-resident asks before any capital moves is simple, but it is rarely answered honestly. What, precisely, will sit on the title register after closing. In most emerging resort markets the answer is not freehold. It is one of three things: a share in a locally incorporated vehicle that holds the land or building right, a registered lease with a fixed term and a defined renewal mechanism, or — the version that fails on inspection — an arrangement where someone else's name sits on the title and a private contract promises the foreigner a control they do not, in law, hold.

This note maps those three routes across six jurisdictions that carry live resort or second-home demand from non-resident buyers: Thailand, Indonesia, Mexico, the Philippines, Vietnam and the United Arab Emirates. It cites the governing statute for each route, the term or cap that actually applies, and the enforcement record that shows what happens when a structure is tested. It treats the nominee route as what it is in every jurisdiction examined here: not a weaker instrument, but a void one, carrying civil and in some cases criminal exposure that has moved from dormant statute to active enforcement inside the current cycle, 2024 to 2026.

Freehold is the exception, not the default#

Foreign direct investment in real estate is, globally, among the two or three most restricted sectors in cross-border investment law. The OECD's FDI Regulatory Restrictiveness Index, benchmarking measures in force across more than one hundred economies as of end-2024, finds real estate grouped with media, transport and agriculture as the sectors carrying the heaviest restriction. Foreign equity limits account for roughly 60% of restrictiveness globally, but land-specific limitations, the category that governs most of what follows in this note, sit inside the index's "other operational restrictions" bucket, which the OECD puts at close to a quarter of total measured restrictiveness worldwide.

Every jurisdiction in this note restricts non-resident freehold on land in some form, and in four of the six the restriction sits in the constitution or in a founding land statute, not in a regulation that a change of government could quietly rewrite. Indonesia's bar sits in the 1945 Constitution and the 1960 Basic Agrarian Law. Mexico's sits in Article 27 of the 1917 Constitution. Thailand's sits in the Land Code, administered since the 1950s with its core prohibition unchanged. The Philippines' sits across its successive constitutions, cross-referenced through a 1936 Anti-Dummy statute still actively enforced. None of this is a recent protectionist reflex aimed at the resort buyer specifically. It is the default architecture of land tenure in each of these states, and the routes described below are the exceptions the state itself has chosen to carve out, not gaps a structuring lawyer discovered.

Route one: the corporate vehicle#

The corporate-vehicle route puts a locally incorporated company, not the foreign individual, on the title, with the foreigner holding an equity or economic interest in that company instead. Done correctly, this is a legitimate and widely used structure, recognised and taxed as such by the host state. Done incorrectly, with the local shareholding held on paper only, it is indistinguishable in substance from a nominee arrangement, and it is treated as one by the regulators now reviewing it.

Indonesia's version is the cleanest example of the legitimate form. A foreign-owned limited liability company, a PT PMA, can hold Hak Guna Bangunan, the Right to Build, over land designated for business use, including hospitality and villa-rental operations. The company is a genuine legal person, capitalised at the level the current investment list requires, subject to Indonesia's foreign-investment regulator and its own tax and reporting obligations. The land right it holds is real, registrable at the land office, and mortgageable within the limits Indonesian banks apply to foreign-linked entities. The distinction from a nominee structure is that the company exists to conduct business, not to conceal beneficial ownership behind a citizen's signature on a title it never economically holds.

Thailand's version of the same route is where the line between a genuine corporate vehicle and a disguised nominee is drawn most sharply, and most often crossed. A Thai limited company with 51% Thai shareholding can, in principle, own land as a genuine Thai juristic person under the Land Code. The structure becomes a nominee arrangement the moment the Thai shareholders' capital is not real, their shares carry no genuine economic risk, and a side agreement returns full control to the foreign minority shareholder. That is precisely the pattern Thailand's Department of Business Development has been reviewing at scale since 2024, with more than 26,000 companies flagged for suspected nominee shareholding, concentrated in tourism, real estate, hotels and logistics.

Route two: registered leasehold#

A registered leasehold is a term-bound right recorded against the title at the land registry, and it is the route with the clearest paper trail of the three. It does not pretend to be freehold. Its defensibility rests on the term being real, the registration being complete, and the renewal mechanism being something more than a promise from the current owner that may or may not survive a sale, an insolvency or a death.

Thailand caps a registered lease of immovable property at 30 years under Section 540 of the Civil and Commercial Code and Section 538 of the Land Code, and any lease beyond three years must be registered with the Land Department to be enforceable at all. For years, market practice stacked renewal options, sometimes 30 plus 30 plus 30, into a single contract to approximate a 90-year term. A Thai Supreme Court ruling in March 2025 closed that route: a clause extending a registered lease beyond the statutory 30 years is void, and a renewal option is a contractual promise against the current owner, not a registrable right that binds a successor.

Vietnam and Indonesia both grant longer, renewable terms, with the renewal mechanism written into statute rather than left to a side agreement. Vietnam's Housing Law 2023 and Land Law 2024 give a foreign buyer of an approved apartment or house a 50-year lease, renewable on application. Indonesia's Hak Pakai, the Right to Use, runs 30 years, extendable by 20, renewable by a further 30, for a cumulative 80 years under Government Regulation 18 of 2021, and is available to a foreign individual only where that individual holds a qualifying residence permit. In both cases the extension and renewal steps require an application to the relevant authority; an institutional underwrite assumes approval on standard terms but prices the administrative discretion sitting inside that assumption, not the assumption itself.

Route three: the nominee, and why it is not a route#

A nominee arrangement puts a local citizen's or company's name on the title and relies on a private side agreement to give the foreign buyer an economic control the public record does not show. In every jurisdiction examined in this note, that side agreement is either void, criminal, or both. It is not a lower grade of the corporate-vehicle or leasehold routes described above. It sits outside the legal system those routes operate inside.

Thailand addresses it directly through Section 96 of the Land Code: land acquired through an unlawful arrangement on behalf of a foreigner can be forfeited to the state, and the price paid is not recovered through the title system. The Foreign Business Act separately criminalises the use of a Thai nominee to circumvent a foreign-ownership restriction. What changed between 2024 and 2025 was not the statute. It was enforcement capacity: a late-2024 raid on a Phuket law and accounting office uncovered more than sixty nominee companies established for foreign clients, and the Land Department began exchanging data with the Department of Business Development in real time for the first time in the system's history.

Indonesia's Basic Agrarian Law voids a nominee transfer of Hak Milik, full freehold, "by operation of law," with no compensation route, under Article 26(2) — a rule that predates the current wave of enforcement by more than sixty years. A Denpasar district court applied exactly that logic in a Canggu land dispute, Decision No. 274/Pdt.G/2020/PN Dps, where a titled Indonesian party's claim against foreign occupants turned on the nominee structure underlying the original purchase. Bali went further in February 2026: Regional Regulation (Perda) No. 4/2026 adds criminal exposure of up to five years' imprisonment and a fine of IDR 1 billion for anyone who holds, facilitates or intermediates a nominee land arrangement, layered on top of the pre-existing national civil-voidability rule. In July 2025, ahead of that regulation, enforcement authorities demolished 48 structures at Bingin Beach that had operated on exactly this basis for years without incident.

Mexico's exception: a trust, not a workaround#

Mexico's restricted zone, the 50-kilometre coastal band and the 100-kilometre border band set out in Article 27 of the 1917 Constitution, bars non-Mexican nationals from holding direct freehold title. Unlike the informal patterns above, the state did not leave a gap for private structures to fill. It created one: the fideicomiso, a bank trust authorised under Article 11 of the Foreign Investment Law, in place as a mechanism since 1973 and given its current 50-year statutory term by the 1994 reform of that law.

The mechanism is straightforward and, unusually among the routes in this note, was designed for exactly this purpose rather than adapted to it after the fact. A Mexican bank holds legal title as trustee, subject to authorisation from the Secretaría de Relaciones Exteriores. The foreign buyer is the trust's beneficiary, with the contractual right to use, lease, improve, sell and bequeath the property. The trust runs an initial term of 50 years and can be renewed for a further 50 years on application, with no statutory limit on the number of renewals, and the structure has now operated for over five decades without the enforcement discontinuities seen in Thailand or Indonesia over the same period.

The distinction the principal should hold onto is that a fideicomiso is not a private workaround dressed up in trust language. It is the government-created, government-registered route, authorised by a named federal ministry on a named statutory basis, and its defensibility comes from being exactly what the statute describes rather than from resembling it closely enough to pass scrutiny.

The Philippines: freehold on the unit, never the land#

The Philippines offers a foreign buyer something none of the other Southeast Asian jurisdictions in this note do: outright freehold, but only on a condominium unit, and only up to a building-wide cap. Republic Act 4726, the Condominium Act, allows a foreign national to hold a condominium certificate of title, a real freehold interest, provided foreign ownership across the project does not exceed 40% of the total floor area at any point. The land beneath the building remains under Filipino ownership through the condominium corporation; the foreigner's freehold attaches to the unit and a proportional interest in the common areas, not to the ground the building sits on.

Land itself, outside the condominium structure, is not accessible to a foreign buyer through any corporate workaround the Anti-Dummy Law does not already anticipate. Commonwealth Act 108 makes it an offence to use a Filipino citizen's name, or a Filipino-controlled entity's, as a front for foreign control of land, with penalties running five to fifteen years' imprisonment plus forfeiture of the property or shares involved. The 40% condominium cap is not a ceiling to be routed past with a creative structure. It is the ceiling, and the statute enforcing it carries some of the heaviest personal penalties of any jurisdiction examined in this note.

Vietnam: caps measured by building and by ward#

Vietnam's Housing Law 2023 and Land Law 2024 grant foreign individuals and entities the right to buy apartments, and in designated projects standalone houses, on a 50-year renewable lease rather than freehold. The cap is structural rather than a single national ceiling: no more than 30% of the units in a single apartment building or block may be foreign-owned, and for standalone houses the limit is set relative to population, calculated on a ward-equivalent unit of 10,000 residents, at 250 houses or 10% of the local housing stock, whichever figure is greater.

The mechanics reward precision over intuition. A buyer cannot assume availability from a development's overall scale; the relevant denominator is the specific building or block, and in mixed developments with several blocks sharing a common base, the cap is applied block by block, not across the project as a whole. The 50-year term is renewable, consistent with the leasehold pattern seen in Thailand and Indonesia above, and the same underwriting discipline applies here too: the renewal is a statutory right subject to application to the competent authority, not an automatic extension written into the original contract.

The freehold counter-case: designated zones#

The United Arab Emirates, through Dubai specifically, is the clearest counter-example in this note: a jurisdiction where a foreign national can hold true, perpetual freehold, not a capped or term-bound substitute. Dubai Law No. 7 of 2006, and the designated-area list set out in Regulation No. 3 of 2006, opened more than 40 named zones to full foreign ownership, with the same bundle of rights a UAE national holds inside them: the unit and the underlying land, the right to sell, lease, mortgage or gift it, and a title deed issued by the Dubai Land Department.

The freehold is real, but it is zone-bound and it is a sovereign grant, not a constitutional default extended to non-residents generally. Outside the designated areas, foreign ownership in Dubai does not exist in the same form. Registration with the DLD is what constitutes title; a signed sale and purchase agreement without that registration is a contractual claim against the seller, not an ownership interest that can be asserted against a third party. Freehold, where a jurisdiction grants it to non-residents at all, tends to arrive exactly this way: as a defined, mapped exception carved deliberately out of a default that still reserves land to citizens everywhere else in the same country.

Honestly disclosed: enforcement risk is the variable that moves#

The statutes underlying every route in this note are old. Thailand's Land Code prohibition on foreign land ownership and its nominee-forfeiture provision have existed for decades. Indonesia's Basic Agrarian Law dates to 1960. What has changed between 2024 and 2026, in both jurisdictions, is not the text of the law. It is the intensity and the technology of enforcement: real-time data-sharing between Thai land offices and the corporate registrar, a Bali regional regulation that adds criminal sanctions on top of a sixty-year-old civil rule, and physical demolitions of structures that had operated for years under an arrangement every party involved knew was informal.

This is the honest risk in this note, and it does not have a clean hedge. A structure that was market practice, tolerated in effect if not in law, for a decade can become an active enforcement target without any change to the statute that always made it void. No title-insurance product available in these markets prices this risk comprehensively, because the exposure is administrative posture, not a defect in the drafting of the instrument itself. The only mitigant available to the principal is using a route the state actually sanctions, the fideicomiso, the registered lease, the properly capitalised PT PMA or Thai company, and treating anything that depends on informality, however widespread the practice, as a position that could be unwound at a cost the principal, not the facilitator who arranged it, will ultimately bear.

The Dubai counter-case is not an exception to this caution, it is a reminder of its edges. A sovereign grant of freehold in a designated zone is, in law, still a grant, made and administrable by the same authority that made it. It has not been reversed in this market to date, and nothing in the sources for this note points toward that; the honest statement is that a defined exception carved out by one authority sits on a different foundation than a freehold right enshrined outside any single administrative discretion, and a principal underwriting across jurisdictions should hold both facts at once rather than collapsing them into a single comfort level.

What a defensible structure requires#

Across all six jurisdictions, the routes that hold up share the same three characteristics, and the route that fails shares the opposite of each. The instrument is registered against the public title record, not evidenced only by a private contract. Any capital or shareholding standing behind it is real and genuinely at risk, not nominal. And the term, cap or renewal mechanism is stated in a statute a counterparty's own counsel can cite by section number, rather than described as simply how business is usually done in that market.

A working diligence process for a non-resident buyer follows from those three characteristics directly. It verifies the specific statute and section governing the route being used. It requests a title or land-registry search current to the transaction date, not one performed months earlier and carried forward on trust. It obtains a local-counsel opinion addressed to the buyer directly, rather than relayed through the seller's own agent. And it prices the renewal or extension step as a discretionary administrative act subject to timing and documentary risk, not as a formality already priced into the purchase. Where the route depends on a corporate vehicle, the diligence extends to the other shareholders' actual capital contribution, because that is precisely the fact Thai regulators are now testing at scale, project by project.

None of this converts a term-bound right into freehold, or a capped condominium interest into unrestricted land ownership, and it is not meant to. The point of the exercise is not to manufacture the appearance of a Western freehold title in a jurisdiction that has never offered one. It is to hold the instrument the jurisdiction actually offers, on the terms it actually offers it, with nothing in the structure resting on an arrangement that a court or a regulator could, at any point in the enforcement cycle, reclassify as void.

Disclosure#

Every statute, ruling and regulation cited in this note is dated and sourced; where a figure could not be tied to a primary or clearly attributed source, it has been left out of this note rather than estimated. The enforcement patterns described here reflect the position as reported through 2026. A principal evaluating any of these routes today should confirm the current statute and the current enforcement posture with local counsel before relying on either.

Skin in the game disclosure. Victaura, through its parent Greystone B.V. (Netherlands), holds an active operating position in prime resort property. Readers should assume commentary may be influenced by, or benefit, Greystone's position. This document is classified as marketing material under MiFID II Article 24(3). It is not investment advice.