Foreign Ownership Regulations In Andorra

Published on October 3, 2025 and written by Cyril Jarnias

Andorra, a small country nestled between France and Spain, is attracting more and more foreign investors thanks to its favorable taxation and exceptional quality of life. However, before embarking on property acquisition or business creation in the Principality, it’s essential to fully understand the current regulations concerning foreign ownership. This article will guide you through the main legal provisions and provide practical tips for a successful investment in Andorra.

A Legal Framework Open to Foreign Investors

Contrary to some common misconceptions, Andorra is relatively open to foreign investment. The Andorran government has implemented several reforms in recent years aimed at attracting international capital and diversifying the country’s economy.

Few Restrictions on Real Estate Ownership

Regarding real estate, foreigners can freely acquire properties in Andorra, whether primary residences, secondary homes, or commercial premises. There are no quotas or limits on the number of properties a foreigner can own.

Sectors Open to Investment

Most economic sectors are open to foreign investors in Andorra. They can create businesses in various fields such as commerce, services, tourism, or new technologies. However, some strategic sectors like banking, energy, or telecommunications remain subject to special authorizations.

Company Capital Participation

Foreigners can hold up to 100% of the capital of an Andorran company in most cases. There’s no requirement to have a local partner, which greatly facilitates business creation for international investors.

Getting the Green Light: Key Steps for Investing

Despite the country’s openness to foreign capital, certain administrative formalities remain necessary to validate an investment in Andorra.

Prior Authorization Request

For any investment exceeding 10% of an Andorran company’s capital, prior government authorization is required. The application must be submitted to the Ministry of Economy and include in particular:

• A detailed description of the investment project
• The company’s articles of association
• A 3-year business plan
• Information about the origin of funds

Processing Time

The legal timeframe for obtaining a response is 30 business days. In practice, the process generally takes between 2 and 3 months. Administrative silence beyond this period constitutes tacit acceptance.

Evaluation Criteria

• The project’s economic impact (job creation, knowledge transfer, etc.)
• The investor’s financial strength
• Absence of risks to national security

Rights and Responsibilities of Foreign Owners in Andorra

Once the investment is validated, foreign owners generally enjoy the same rights as Andorrans, but must also respect certain specific obligations.

Guaranteed Rights

• The right to freely manage their business
• Protection of their investments against expropriation
• The possibility to repatriate profits without restrictions
• Access to Andorran courts in case of disputes

Obligations to Respect

• Annually declare their investments to the foreign investment registry
• Comply with Andorran legislation regarding tax, social, and environmental matters
• Obtain a residence permit if they wish to settle permanently in Andorra

Attractive Taxation

• Corporate tax capped at 10%
• VAT (IGI) limited to 4.5%
• No wealth tax

Keys to Success for Investing Peacefully in Andorra

To maximize your chances of success as a foreign investor in Andorra, here are some practical tips to keep in mind:

Work with Local Professionals

Get assistance from Andorran lawyers, notaries, and accountants who perfectly master local regulations. Their expertise will help you avoid many pitfalls.

Take Time to Understand the Market

Before investing, thoroughly study the Andorran market, its specificities, and opportunities. Meet with local players to refine your understanding of the country.

Maintain Good Relations with the Administration

Maintain good relations with Andorran authorities by being transparent about your projects and highlighting their positive impact for the country.

Integrate into the Local Economic Fabric

Seek to integrate into Andorran business networks and establish partnerships with local companies. This will greatly facilitate your development.

Respect Andorran Culture

Take time to familiarize yourself with Andorran culture and customs. Respectful behavior will be appreciated and will facilitate your business dealings.

In conclusion, Andorra offers a generally favorable framework for foreign investors, with few restrictions and attractive taxation. Although certain administrative formalities remain necessary, they don’t constitute an insurmountable obstacle for those who are well-prepared. By following the advice presented in this article and surrounding yourself with the right local experts, you’ll maximize your chances of success for your investment in the Principality.