Legal Literacy - The practice of nominees between Indonesian citizens and foreign citizens is still widely practiced in Indonesia, even though it constitutes legal smuggling & violates the provisions of the Law. This article discusses the prohibition of nominee practices on land ownership and investment in laws and regulations. Let's look at the discussion of nominee practices below.

Nominee Agreement between Indonesian Citizens and Foreign Citizens

A nominee agreement (representation or name borrowing) is based on a statement or power of attorney made by both parties, namely a Foreign Citizen (WNA) borrowing the name of an Indonesian Citizen (WNI) to have their name listed as the land owner on the certificate, so that the WNA can carry out legal actions against the land they own. Nominee agreements are also used to borrow someone's name as a shareholder in a company, made in writing and signed by both parties in a notarial deed before a notary.

In this case, the WNA is the original owner as the party who issued the money for the purchase of land or shares in the name of the WNI and the authority or power to manage and utilize the land is carried out or represented to the WNA. In general, foreign citizens who control land through nominee agreements or name borrowing utilize the land for business and tourism activities.

This nominee practice is carried out because ownership rights in the name of Indonesian citizens can last for a long time or forever as long as the party whose name is listed on the certificate is still alive and can be passed down to heirs. If the certificate in question is passed down to the heirs, the WNA can still renew the nominee agreement by including the name of the heir.