What is considered foreign investment in Andorra?

The acquisitions, by any title, of assets located in the Principality of:

1. Natural persons not resident in Andorra, provided that they do not have Andorran nationality.
2. Legal persons of foreign nationality.
3. Andorran companies with foreign participation in their capital or in their voting rights, directly or indirectly, in a percentage equal to or greater than 50 percent.
4. They are also foreign investments intended for branches or other types of permanent establishments in Andorra for non-residents; and those carried out by other Andorran legal entities when at least 50% of the voting rights of its decision-making body belong, directly or indirectly, to non-resident individuals or foreign legal entities.

Foreign investment authorization

• The ministry responsible for foreign investment must verify, among other elements, that the investment cannot produce an unfavorable effect on free competition, the labor market and the balance of public resources, and must give a reasoned decision on the request for authorization. of foreign investment within a maximum period of one month.
• The competent ministry in foreign investment matters may only deny the authorization of foreign investment, always with reasons, when the investment may harm, even occasionally, the exercise of public power, sovereignty and national security, public and economic order. , the environment, public health or the general interest of the Principality and any foreign direct investment related to sensitive goods.

Forms of foreign investment

Foreign investments can materialize through monetary or non-monetary contributions, and can be made through any of the following forms:

I. Direct investments

• Direct investments are investments that are to be made through participation in Andorran companies or through the establishment or expansion of branches or other types of permanent establishments.
• Prior authorization is required to make direct investments consisting of acquiring shares or rights in an Andorran company when, as a result of the acquisition, the acquirer has directly or indirectly a share of more than 10% of the share capital or voting rights. Shares equal to or less than 10% are subject to a subsequent declaration to the Foreign Investment Registry.

II. Portfolio investments

• Portfolio investments are investments that are to be made by subscribing securities representing loans, except those that are considered direct investments, issued by resident natural persons or Andorran private or public legal persons, of preferred shares or participations that do not include the right to vote and participations or shares in investment entities regulated in the regulations of the financial system.
• Portfolio investments are free and are not subject to the obligation to request prior authorization.

III. Investments in real estate

• Investments in real estate are investments that are to be made through the acquisition of property and other real rights over real estate, and of administrative concessions that entail exclusive use of real estate, located in the territory of the Principality of Andorra.
• Investments in real estate that non-resident individuals in Andorra want to make are subject to prior authorization, provided they do not have Andorran nationality; Andorran companies when the foreign participation in the share capital or voting rights is equal to or greater than 50 percent, and non-resident branches or other types of permanent establishments in Andorra.
• Investments in real estate that legal entities of foreign nationality want to make, including public entities of foreign sovereignty, are also subject to prior authorization. These investments in real estate must necessarily be linked to the development of the activity of the legal entity.
• Investments in real estate that want to be made by foreign legal entities that are dedicated to the acquisition or construction of real estate for the purpose of marketing them, including leasing, cannot be authorized.