Foreign investment in Andorra: the prior authorisation

Who is a foreign investor?

A foreign investment is the acquisition of assets located in Andorra, or of rights in rem over those assets, by (Llei 5/2025 of 6 March 2025 “for sustainable growth and the right to housing”, art. 1, as clarified by Llei 2/2026):

• a non-resident natural person;
• for real estate only, a resident who cannot prove 3 years of effective and permanent residence in the 10 years preceding the application, periods of study abroad being counted as residence;
• a foreign legal person, including when it invests through a branch or a permanent establishment;
• an Andorran company held 50% or more, directly or indirectly, by foreigners.

Residence means holding a valid residence authorisation; for residence without gainful activity, it must also be effective and proven by a tax residence certificate (art. 1.2). The law then distinguishes two categories:

Not covered, in particular, are the purchase of movable assets other than company securities, security interests, subscription for securities other than shares in companies with majority foreign capital, and units in Andorran investment funds, except majority-foreign funds invested mainly in real estate (art. 1.5).

The official terminology: inversió estrangera, Registre d’inversions estrangeres

The texts, forms and decisions are written in Catalan. The terms to know for your research and your applications:

The 2012 law no longer applies: what changed in 2025

Llei 10/2012 of 21 June 2012 on foreign investment has been repealed: Llei 5/2025 of 6 March 2025 replaced it, with the exception of its additional, repealing and final provisions (repealing provision). A guide that still presents it as the rule describes a regime that is no longer in force. The regulation of 9 April 2025 sets out the new procedure.

According to its explanatory memorandum, Llei 5/2025:

• redefines foreign investment and distinguishes direct investment, in companies, from real estate investment;
• treats as a foreign investor, for real estate, a resident who cannot prove 3 years of residence in the previous 10 years;
• prohibits foreign investors from property development, with exceptions;
• introduces monitoring of the declared investment, to check that it is effective, with penalties that may go as far as the nullity of the investment and of the company used.

The procedure for self-employed residency has followed suit: according to Decree 75/2026, the reservation of the immigration authorisation now precedes the foreign investment formalities.

When is prior authorisation compulsory?

In most cases: setting up a company, acquiring or changing a holding, amending the corporate purpose and any property purchase by a foreign investor require it. Only a few transactions are exempt, provided they are declared.

Llei 5/2025, consolidated version at 10 October 2026. Investments exempt from authorisation must be declared to the Register of Foreign Investments: failing that, after 30 days, the fine is €5,000 (art. 18.3).

For a resident who sets up their company, no authorisation is therefore required: the notary records their declarations and checks their residence on the basis of a certificate from the Immigration Service (regulation of 9 April 2025, art. 4).

Can the authorisation be refused?

Yes, in two cases: when the investor is one of the persons the law excludes, or when the transaction could harm one of the interests it protects.

To assess this, the Register of Foreign Investments asks for information on your identity, on the activity carried on abroad and that planned in Andorra, and on the origin of the funds (2025 regulation, art. 3).

Applying for authorisation (inversió estrangera): the procedure step by step

1. 1

   Obtain an NIA

   The administrative identification number allows you to complete any procedure with the Andorran administration. It is applied for in person or online, with a certified copy of the passport.

2. 2

   Reserve the company name

   For setting up a company, opening a branch or transferring a registered office, reserving the company name is a compulsory prerequisite. See the steps for incorporating an Andorran company.

3. 3

   File the application online

   Using the official form, with the documents requested: according to the Govern, a criminal record certificate less than three months old, a CV with photo, a certified copy of the passport and a business plan (target market, added value, activity, amounts invested). Fee: €300.

4. 4

   Wait for the decision

   The ministry decides within two months, which can be extended by one month. The time limit is suspended when additional documents are requested; you then have ten working days to provide them. The authorisation may be subject to conditions.

5. 5

   Carry out the investment before a notary

   Within the time limit set or, failing that, within six months, which can be extended once by three months. The Andorran notary attaches the authorisation to the deed and declares the transaction to the Register of Foreign Investments within fifteen days.

6. 6

   Report afterwards

   The investor provides, periodically or at the ministry’s request, the documents proving that they comply with the law (art. 11.3).

After the investment: effective activity and penalties

An Andorran company with foreign capital must carry on an effective economic activity within 18 months of its incorporation (art. 6.3). The regulation then gives three months to prove it, with (art. 7):

• the registration of a commercial or industrial business licence for the activity, except for a company managing its own assets or holding securities;
• the filing of the annual accounts;
• accounts showing at least 75% of the turnover, expenditure, investments or assets announced in the application; between 50 and 75%, a justification is assessed by the register;
• the identity of the beneficial owners;
• an account with a bank established in Andorra, opened and used.

Breaches are costly:

Llei 5/2025, art. 15, 17 and 18.

The evidence of a genuine activity is detailed in our guide to the economic substance of an Andorran company.

Real estate investment: authorisation, ceilings and prohibitions

Any property purchase by a foreign investor requires prior authorisation (art. 8). A non-resident natural person, or one who has been resident for less than 3 of the last 10 years, is entitled to the authorisation, unless there is a ground for prohibition or refusal, if after the purchase they do not hold more than (art. 9):

detachedor a plot on which to build one

1 house

or studioswith at most 3 parking spaces and 3 storerooms each

2 apartments

for parkingin the absence of a home

6 spaces

This ceiling applies for 10 years from the purchase that reached it. Homes let at an affordable price, as a habitual residence, for at least 10 years are not counted. A resident of less than 3 years may also be authorised to buy premises for their own commercial activity.

The following are prohibited for foreign investors (art. 9.5 to 9.7):

• property development, except for programmes entirely intended for the letting of main residences, at least half of them at an affordable price for 10 years, or located in a parish that has revised its urban development plan;
• the purchase of tourist apartments and of homes for tourist use;
• arrangements involving a lease with an option to buy or letting to related persons that may constitute fraud on the law.

The purchase also bears the foreign property investment tax: 6% for a home within the legal limits, 10% beyond them, in addition to transfer tax or IGI. See our guide to buying an apartment in Andorra and our news item on the 6% tax on property purchases by foreigners.

An investment does not give residency

Residency is applied for separately, from the Immigration Service. To run a business, it is self-employed residency: more than 34% of an Andorran company, effective management, €50,000 non-refundable paid to the AFA. To invest without working, it is passive residency, which requires €1,000,000 invested in Andorra, with more than €800,000 per property in the case of a property purchase.

Which status suits you?

Four questions to identify the residency status to look into, and its conditions.

Take the test