Law 10/2012, June 21, foreign investment in the Principality of Andorra since the General Council in its session of 21 June 2012, has approved the following: law 10/2012, June 21, foreign investment in the Principality of Andorra preamble The private foreign investment has become a strategic tool for the policy to foster economic growth driven by the United States , seeking to attract these resources to attract entrepreneurship, talent, innovation and knowledge.

According to the OECD, beyond the stimulation derived from the same investment, foreign investment, especially foreign direct investment, influences the growth and increases the productivity and efficiency in the use of the resources of the recipient country. So, one of the main effects of foreign investment is the diversification of the economy, with the creation of new economic sectors, and increasing the competitiveness of existing industries. Other effects produced by foreign investment are the dissemination of good practices in the field of business management, the transfer of technology, the implementation of training programmes and the increase of tax income of the recipient countries. So much so that one of the most used incentives by Governments has been to open the respective markets to foreign investors through the modification of the regulations, with the aim of reducing the protectionism that traditionally many States awarded to certain national economic sectors.

The Principality of Andorra has also not been oblivious to this trend, as it reveals the law 2/2008, of 8 April, foreign investments, which led to the opening of the 100 percent of some activities to foreign capital. However, four years after the path begun by that reform that was intended to attract activities essentially not present in Andorra, it has been confirmed that the measures promoted have not been sufficient to achieve the objectives that had been anticipated. And in a context of crisis in which most of the Principality's economic indicators are still a downward trend, confirming the need to carry out structural reforms and, in particular, to modify the current legislative framework in the field of foreign investment, with the aim to find a broader space for progress and competitiveness.

Thus, the liberalization of foreign investments, along with the signing of double taxation conventions, after the recent application of a direct tax on the companies and the economic activities, you must position the Andorran economy in a situation of competing on equal terms with the neighboring economies, and at the same time has to make Andorra is an attractive destination for new sectors and companies. In short, the economic opening is the path that best guarantees of success can give to make sure a new phase of growth and prosperity in the economy and the Andorran society.

However, this liberalisation of investments will not be made without taking into account a series of safeguards to preserve the interests that the State considers strategic. As well, the Act makes express reservation of certain subjects that are worth protecting, both to avoid investments in countries not considered cooperative in the area of money laundering, such as enabling the Government to deny, for due authorisation, the conditions of investment realization of which can impair the exercise of public power, of sovereignty and national security, of public order , the environment or public health.

The main objectives of the economic opening are to attract investments and businesses that can contribute more to economic development, they can offer a greater diversification of the economy and providing a high added value. At the same time, the aim is to avoid a negative effect on competition, the labour market and the financial balance of the public resources. Accordingly, a number of factors are established objectives to assess the investment, such as occupational and training model, the value of the investment, the expansion plan or the level of commitment to the Principality, among others.

On the other hand, the liberalization of foreign investments in all sectors of the economy is also a major reform with respect to the obtaining of the economic rights of individuals. Thus, it establishes that the economic rights of individuals are acquired with obtaining their legal residence in the Principality. In particular, it modifies the current legislation on the exercise of liberal professions by removing the requirement of twenty years of residence for non-nationals to exercise the professional activity in Andorra. However, the exercise of the activity of professionals will determine your effective and permanent residence, as well as the criterion of reciprocity, which allows the effective exercise of the profession to the Andorran national liberal in the State of origin of the person who requests to exercise a liberal profession in Andorra.

With regard to investments in real estate, you eliminate the current limitations set over two floors or apartments to foreign physical person, and also suppresses the link required in the business for investment in real estate by Andorran companies with majority of foreign capital.

With regard to the procedure for authorisation, it remains the procedure of prior authorisation in all direct investments that exceed the 10 percent participation in societies, as well as investments in real estate. In this way increase the guarantees that the new regime of foreign investments is suited to the goals established. And to streamline the procedure, reduces the deadline to resolve the request for foreign investment in a month, may be extended for a period of fifteen days, and establishes the acceptance in case of silence of the administration.

With respect to the structure of the law, it is essentially that of the law 2/2008, while the changes introduced have made necessary the drafting of a new legislative text which derogates the law 2/2008. Thus, this law is divided into eight chapters, twenty-two articles, four additional provisions, a transitory, a derogatory and three final provisions.


The chapter first contains general provisions that establish the definitions and the legal status of foreign investments, safeguard clauses, the kinds and forms of foreign investment, according to the categories used traditionally in the area of the European Union in order to increase legal certainty, and also regulate the payments and collections derived from foreign investments to fulfill a function of control.

The second to fifth down the system for each of the four forms of direct foreign investment, on their portfolio in real estate and other forms. It defines the meaning, it delineates the area, it is expected a total liberalization of each one and specify which require a prior authorization, such as direct investments that exceed the 10 percent of engaging, investments in real estate and other forms of investment. For investments in portfolio, maintaining the liberalisation in general and without authorization procedure.

The sixth and seventh chapters contain, respectively, the rules regarding the skills and procedures, and also to the formalisation and registration of foreign investments. To this effect, you enter an eighth chapter regulating the registration of foreign investments as a body of the Administration in charge of the registry functions of foreign investments.

In the additional provisions modifying Law 6/2008, May 15, on the exercise of liberal professions and educational institutions and professional associations; law 20/2007, of 18 October, corporations and limited liability, amended by law 4/2008, from May 15, and the law on real estate transfers, of 15 December 2000.

The transitory provision establishes a procedure for the registration of foreign investments made prior to the entry into force of the law.

Finally, the final provisions empowering the Government to develop the regulations of the law, regulating the economic rights of foreign natural persons when acquire residency in Andorra and set the entry into force of the law.

Chapter first. General provisions Article 1 definitions and legal nature 1. Are considered foreign investments in the Principality of Andorra the acquisition, by any title, of goods located in the Principality by: a) non-resident natural persons in Andorra, as long as they do not have the Andorran nationality.

b) legal persons of foreign nationality, including public entities of foreign sovereignty.

c) Andorran companies with foreign participation in the capital or in their voting rights, directly or indirectly, by a percentage equal to or greater than 50 percent. The foreign investments are also applied to branches or other permanent establishments in Andorra of non-residents; and carried out by other Andorran legal persons when at least 50% of the voting rights of its decision-making body belongs to, directly or indirectly, to persons non-residents or foreign legal persons.

Do not have the consideration of foreign investment or are subject to the present law, the acquisition of real estate property or the acquisition or establishment of rights unless the Law specifically defines this as a foreign investment.

2. In accordance with this law, it is understood that they are foreign natural persons resident in Andorra are holders of permits to reside in the country delivered by the competent Ministry, excluding the temporary authorizations are not extendable. The investments made by holders of temporary residence permits are not extendable are considered foreign investment and are subject to the provisions of this law.

3. In accordance with this law, it is understood that they are public entities of foreign sovereignty, foreign States, organizations and public officials and foreign institutions and public companies of foreign nationality when the owner of the majority of its capital belongs to any of the above mentioned entities, or are subject to his control or have the public rating to the legislation of the country of origin.

4. The investments made by foreign natural persons resident in Andorra acquired the status of foreign investments when the people mentioned seem to have residency in Andorra. Likewise, foreign investments made by foreign non-resident natural persons in Andorra lost this condition when these people acquire residence in the Principality.

In turn, they become foreign investments made by the Andorran legal persons when they change their nationality, or when foreign participation therein, in accordance with the provisions in section 1. c) above, is equal to or greater than 50 percent. And lose that status as the investments made by foreign legal persons when they become the Andorran law, or when the foreign participation in the same boils down to less than 50 percent.

Coping with qualification as a foreign investment brings with it the obligation of declaration in the register of foreign investment.

Article 2 safeguard Clause 1. Not authorized foreign investments made by residents, resident or, in the case of legal entities, nationals of one of the countries not considered cooperative in the area of money laundering and financing of terrorism defined by the Group of Financial Action Task Force (FATF) or by the international body competent in this matter, and to natural or legal persons of which the agencies responsible for the prevention of money laundering and the financing of terrorism reporting unfavorably.

2. The Ministry responsible for foreign investment can only refuse the authorisation of foreign investment, always so motivated, when the investment can damage, albeit occasionally, the exercise of public power, sovereignty and national security, public order and economic, the environment, public health or the general interest of the Principality and any foreign direct investment related sensitive goods , defined in the law on the control of sensitive goods, of 4 March 1999.


In order to assess compliance with the precepts laid down in the above paragraph and in accordance with what is prescribed by the regulations, the Ministry responsible for foreign investment has to verify, among other things, that the investment may not produce an unfavorable effect on the competition, the job market and the balance of public resources, taking into consideration the factors that but not limited to, are set out below:-the nature of the activity;

-the direction of the market;

-the value of the investment and planning;

-The occupational model and training;

-The plan of expansion;

-The economic links and strategic partners;

-the planning of the necessary resources, public and private, and their financing;

-the model of corporate social responsibility;

-The level of commitment with the Principality of Andorra.

3. For the exercise of economic activities of a foreign investment, the holder should observe and comply with the laws and regulations governing the sector or the specific sectors where you develop the activities.

Article 3 Classes and foreign investments will be materialized by means of monetary contributions or non-cash contributions, and can be made through any of the following forms: (a) direct investments, portfolio investments (b), (c) investments in real estate and (d) other forms of investment.

Article 4 collections and payments Are payments or payments derived from foreign investments and their settlement should be made through authorized banks in the Principality of Andorra or of banks domiciled in one of the countries that are not considered to be non-cooperative in the area of prevention of money laundering and financing of terrorism, defined by the Group of Financial Action Task Force (FATF).

Article 5 transfer to the outside Are holders of foreign investments made in accordance with this law and the regulations that develop can transfer abroad the product who have obtained their settlement and the yields obtained with such investments.

Article 6 transmission in any case, the transfer of foreign investment in the Principality of Andorra are subject to compliance with the requirements and conditions established in this law regardless of the place where the parties made to be territory of the Principality or abroad.

Article 7 Nullity acts and business contrary to this law and are made in fraud of the same is null in its own right, without prejudice to the acts and businesses signed with third parties of good faith, which will maintain its effectiveness.

Second chapter. Direct investments Article 8 Definition Are direct investments investments that will want to check through the participation in companies of Andorra or the Constitution or the extension of branches or other permanent establishments.

Article 9 Scope direct investments consisting of participation in Andorran companies include the incorporation of the company; the subscription and the total or partial acquisition of the shares or of the social shares, the acquisition of values such as the subscription rights of shares or social interests, shares or bonds convertible into shares or other analogues which by its very nature legitimise the right to participate in the capital of the society, as well as any legal business in virtue of which acquire political rights.

Article 10 1 Scheme. Prior authorization is required from the Ministry competent in matters of foreign investment, to make direct investments consisting of acquired participations or rights of an Andorran society when as a result of the acquisition, the acquirer has directly or indirectly a participation higher than 10% of the share capital or of the voting rights.

The direct foreign investment consisting of a participation, directly or indirectly, less than or equal to 10% of the share capital or of the voting rights of Andorran companies, while they do not require prior authorisation, subject to a subsequent statement to the registry of foreign investment.

2. Also you must obtain the prior authorisation of the competent Ministry in the area of foreign investment to make direct investments consistent to set up or expand branches or other permanent establishments of any business activity you want to deploy.

3. In the case of transfers of shares or voting rights of an Andorran society by cause of death in which the beneficiary is a person, physical or legal entities, resident or not, no Andorran in accordance with the provisions of this law, the acquisition will be valid and effective, even though it is compulsory the subsequent declaration in the register of foreign investment.

4. direct investments who want to make credit or financial institutions non-financial institutions foreign Andorra may not exceed either directly or indirectly the percentage of participation in the share capital set out in the regulations of the current financial system.

5. Once the authorization, in accordance with the provisions of this article, are subject to prior administrative authorisation, amendment of the corporate purpose; the increase of the share capital, provided that is not charged to voluntary reserves; the increase in the percentage of foreign participation, and the modification of any condition that permission has been imposed.

Third chapter. Investments in portfolio investments portfolio investments Are Definition Article 11 who wish to make through the subscription of securities representing borrowings, excluding those who are considered to be direct investments, issued by resident natural persons or legal entities, public or private, of Andorra, of shares or preferred shares that do not include the right to vote shares or shares in investment regulated in the regulations of the financial system.

Article 12 The Scheme investments in portfolio are free and are not subject to the duty of prior authorization request or the duties of registering and declaration provided for in this law.

However, it requires the prior authorization of the competent Ministry in the area of foreign investment to subscribe shares in a collective investment organism of Andorran law when they meet cumulatively the following requirements:-at least 50 percent of its assets are comprised of investments in companies of Andorra and/or to property located in the Principality of Andorra or real rights on these , excluding those of warranty;


-that the percentage of foreign participation in the body of collective investment is equal to or greater than 50 percent.

Also the participation in the organisation of collective investment will be valued foreign investment if, after being acquired, will attain the above mentioned percentages.

For this reason, and in any case, the managing bodies of collective investment institutions that enable the achievement of the above percentages, must obtain the authorization of the competent Ministry always to constitute them.

The transmission due to death of the investments in the portfolio that are not free, require subsequent declaration in the register of foreign investment.

The fourth chapter. Investments in real estate investments real estate investments Are Definition Article 13 which wish to carry out by means of the acquisition of the ownership and other real rights on real estates, and of the administrative concessions that imply a proprietary use of real property situated in the territory of the Principality of Andorra.

Article 14 1 Scheme. Are subject to the prior authorization of the competent Ministry in the area of foreign investment investments in real estate who want to make individuals non-residents in Andorra, as long as they do not have the Andorran nationality; the Andorran companies when foreign participation in the capital or the voting rights is equal to or greater than 50 percent, and the branches or other permanent establishments in Andorra of non-residents.

2. Are also subject to the prior authorization of the competent Ministry in the area of foreign investment investments in real estate who want to make legal persons of foreign nationality, including public entities of foreign sovereignty. These investments on real estate have to be necessarily linked to the implementation of the activity of the legal person.

3. Cannot authorize investment in real estate who want to carry out foreign legal persons who engage in the acquisition or construction of property in order to sell them, including the lease.

4. In accordance with this law, acquisitions by cause of death of real property by an individual or legal entity non-resident, the transmission is valid and effective, but requires subsequent declaration in the register of foreign investment.

Chapter five. Other forms of investment Article 15 Definition Are other forms of investment investments that will want to check in using any other way not foreseen in the previous chapters, including through the participation in accounts contracts in participation, foundations, cooperatives or communities of goods.

Article 16 the regime to make qualificables investments as other forms of investment is required prior authorization from the Ministry responsible for foreign investment. The requirement of prior authorization is replaced by subsequent declaration in the register of foreign investment in the case of acquisitions by cause of death.

Chapter six. Powers and procedure of authorization Article 17 competent Corresponds to the Ministry responsible for foreign investment to grant the authorization, or deny it, to make foreign investments in the Principality of Andorra, in accordance with the provisions of this law, are subject to the prior authorisation of the same Ministry.

Article 18 Procedure 1. Requests for authorization of foreign investment have been presented to the Government.

The Government determines the regulations on the procedure of processing the application for prior authorisation of foreign investment and the documentation that must be accompanied.

2. In the case of direct investments referred to in paragraph 4 of article 10, it is mandatory that the Ministry competent in matters of foreign investment, before taking a decision, get a report of the Institut Nacional Andorrà de Finances (INAF).

3. The Ministry responsible for foreign investment have to solve motivadament the request for authorisation of foreign investment within a maximum period of one month, unless you choose to extend the decision by reason of the instruction of the file. In any case, that overtime may not exceed half of the initial term, and must be communicated to the person concerned.

After the deadline of resolution indicated above, including the extension, without having adopted a resolution, the authorization is understood in any case granted.

4. In everything that is not specifically set forth in this law, it has to apply the code of the administration.

Article 19 Implementation The authorized foreign investments should be made in the period specifically indicated the authorization, or failing that, within a period of six months. After the deadline without that investment has been materialized, the authorization is understood to have expired, unless they get a single extension, under the conditions that must be determined.

Chapter seven. Formalization and registration Article 20 Registering except in cases where this law does not require nor the prior authorization of the competent Ministry in the area of foreign investment nor the subsequent statement, all foreign investment must be formalised in a public document authorized by a notary of Andorra, and to authorize it, the notary has to require investors, when appropriate, the documents that prove that they have fulfilled the requirements of the rules on foreign investments in the Principality in order to incorporate them into the matrix.

Article 21 statement and record except in cases where this law does not require the subsequent declaration in the register of foreign investments, the notaries who will be authorised the public document in which will formalize are required to declare foreign investments and their settlement in the register of foreign investments within a maximum period of fifteen days of the granting of the public document. This declaration must be made by the official form and is mandatory regardless of the fact that foreign investment requires the prior authorization of the competent Ministry in the area of foreign investment.

Eighth chapter. The registry of foreign investment Article 22 Organization and functions the registry of foreign investments is the organ of the Administration in charge of the deployment of the registry functions set out in this Act and the regulations that develop it, and reports to the Ministry responsible for foreign investment.

First additional provision


1. Modifies the letter a of paragraph 1 of article 5, in the exercise of law 6/2008, May 15, on the exercise of liberal professions and educational institutions and professional associations, with the following content: "a) requirements of nationality or residence: having the Andorran nationality or prove effective and permanent residence in the Principality.

The permissions for the exercise of a liberal profession in the Principality of Andorra on behalf of individuals with effective and permanent residence in Andorra and that do not have Andorran nationality are subject to reciprocal treatment to allow the effective exercise of the profession to the Andorran national liberal in the State of origin of the applicant. "

2. Modifies the second additional provision, Need of qualified professionals, the law 6/2008, May 15, on the exercise of liberal professions and educational institutions and professional associations, with the following content: "permits for professionals of Andorran nationality by the Government, by means of special rating by Decree, you can grant permissions for the exercise of liberal professions to foreign persons who do not meet the requirement of effective and permanent residence , or the principle of reciprocity, set out in article 5, taking into account criteria of experience rating, and/or professional and business reputation of the professionals concerned, and also in accordance with the specific needs of the Principality. "

Second additional provision modifies the article 20 of law 20/2007, of 18 October, corporations and limited liability, amended by law 4/2008, from May 15, with the following content: "Article 20 1 Requirements. The business of transmission of the shares and/or shares must include in public deed authorised by a notary of Andorra.

2. Administrators of the society have to enroll the acquirer in the log book of members that all corporations and limited liability should take. "

Third additional provision modifies the article 2 of the law on real estate transfers, of 15 December 2000, with the following content: "Article 2 provided that, in accordance with the specific regulations in force are foreigners require a prior administrative authorisation to purchase real estate, is licensing the requirement of validity of the acquisition."

Fourth additional provision 1. The Andorran banking entities must provide to the Ministry in charge of finance information that requires, with individual character and exceptional circumstances, on the origin, destination and the concept of operations related to the investments covered in this law, where necessary.

2. The Andorran banking entities must report to the Ministry in charge of finance with quarterly information relating to capital movements in aggregate basis and sorted by country of origin and of destination.

3. The Andorran banking entities cannot run any of the operations referred to in article 4 of this law without obtaining the information to which it refers in paragraph 1, and all the people who participate in operations are required to facilitate it.

Transitional provision 1. The individual situations of investment prior to the entry into force of the law 2/2008, of 8 April, foreign investment in the Principality of Andorra, amended by law 36/2008 of 18 December and by law 93/2010, from 16 December, are valid. In any case, have to declare in the register of foreign investment.

2. Foreign investments formalised during the term of the law 2/2008, of 8 April, foreign investment in the Principality of Andorra, amended by law 36/2008 of 18 December and by law 93/2010, from 16 December, and that in accordance with this law will have to register in the register of foreign investment have the deadline of a year to do it.

3. Have the consideration of foreign investments and, therefore, are subject to this law Andorran companies investments that prior to the applicability of the law 2/2008, of 8 April, foreign investment in the Principality of Andorra, amended by law 36/2008 of 18 December and by law 93/2010, from 16 December, they had a foreign participation in its capital , direct and indirect, greater than 50 percent. In any case, have to declare in the register of foreign investments in the period of one year from the entry into force of this law.

4. The declarations in the register of foreign investments made in the merits of this transitional provision is entered with the date of effect corresponding to the respective acquisition.

Repealing provision abolishes the Regulations number 3 of development, relative to the commercial permits to foreigners, of 25 June 1976; Law 2/2008, of 8 April, foreign investment in the Principality of Andorra; law 36/2008 of 18 December on modification of the law 2/2008, of 8 April, foreign investment in the Principality of Andorra; article 9 of law 93/2010, of December 16, of measures for the promotion of the economic and social activity, and of rationalization and optimization of the resources of the Administration, and any provision of rank less than or equal to be opposed to the provisions of this law.

First final provision the Government has approved the development provisions of this law and, in particular, the official models of request for authorisation and declaration in the register of foreign investment.

Second final provision without prejudice to the provisions of this law, as from the entry into force of the law, the economic rights of foreign natural persons who want to carry out an economic activity in the Principality of Andorra with the obtaining of the residence in the Principality as defined in article 1 of this law.

Third final provision this law shall enter into force the day after being published in the official bulletin of the Principality of Andorra.

Casa de la Vall, 21 June 2012 Vicenç Mateu Zamora Syndic General Us the co-princes the sancionem and promulguem and let's get the publication in the official bulletin of the Principality of Andorra.

Joan Enric Vives Sicília François Hollande Bishop of Urgell, President of the French Republic Co-prince of Andorra Co-prince of Andorra