Law 2/2008, of 8 April, foreign investment in the Principality of Andorra since the General Council in its session of 8 April 2008 approved the following: law 2/2008, of 8 April, foreign investment in the Principality of Andorra preamble The legislation of foreign investment has become a very significant part of the economic policy aimed at promoting progress and competitiveness of the Andorran economy Since, by the attraction of foreign capital, will be achieved increase the level of development and of innovation. Now, to meet this objective effectively and opportunity, it is essential to have a unique and stable regulatory text that promoted a framework of legal security foreign investment decisions and also to increase substantially the current degree of liberalisation of these investments in the Principality.

It is for this reason that the first objective of this law is focused on the approval of a single text covering the diet of all kinds and forms of foreign investment, avoiding both the current proliferation of provisions, such as those born in several moments possible gaps and contradictions in existing ones. The second objective pursued with this law, directed to satisfy the purpose of the legislation in the field of foreign investment, is to significantly increase the current degree of liberalisation of these investments in the Principality, eliminating the requirement of prior administrative authorisation in a higher number of cases.

The law is structured in seven chapters, twenty-three additional provisions transitional articles, a two, a final and a repeal. The chapter I contains general provisions establishing the concept, 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. Also regulate the payments and collections derived from foreign investments to meet a scheduled control function in general in the second additional provision. Finally, the recognition of the right of transfer to the outside, the subjection of the transmissions and the sanction of nullity, are instruments designed to promote and ensure compliance with the law.

Chapters II to V establish the system for each of the four forms of direct foreign investment, on their portfolio in real estate and other forms of defining their significance, delimiting its scope and determining the degree of liberalisation of each. In this regard, it should be noted the liberalisation of direct investments, except for those that wish to carry out in the sectors of activities, to the specificities of the Andorran economy, are expressly subject to the obtaining of a prior administrative authorization, and only when they achieve significantly higher percentages in force, and it is also remarkable the general liberalization of investments in portfolio.

Chapters VI and VII contain, respectively, the rules regarding the competences and procedures and to the formalization and registration of foreign investments. In relation to the competition and the procedure to authorize foreign investments subject to this requirement, the law attributes in all cases to the Government, with preliminary report of the Ministry of economy, and expressly fixed the criteria that can be found the decision by the granting or refusal of the authorisation, thus limiting the degree of discretion of this governmental decision. Once authorization, foreign investment has been made within the deadline laid down in the authorization or the set generally in the law and, in any case, should be formalised in a public document notarized and being declared in the register of investment.

Chapter i. General provisions Article 1 Definition 1. Foreign investments in the Principality of Andorra are the investments made by individuals not resident in Andorra, as long as it does not have the Andorran nationality, for individuals with effective and permanent residence in Andorra but not economic, and for legal persons domiciled abroad, including public entities of foreign sovereignty. The investments made by the Andorran national Andorran investments are in any case.

2. For the purposes of this law, to public entities of foreign sovereignty is meant the foreign States, foreign organisations and public institutions and companies and foreign-owned companies when the owner of the majority of its public capital is some of the entities mentioned, or that are subject to the effective control of the latter or the public rating to the legislation of the country of origin.

3. Likewise are foreign investments in the Principality of Andorra investments made by Andorran companies with foreign participation in the capital or in their voting rights, by a percentage greater than 50 percent and by branches or establishments in Andorra of non-residents through the participation in companies of Andorra.

4. The investments made by individuals resident in Andorra will acquire the status of foreign investment when those to move their residence abroad. Likewise, foreign investments made by non-resident natural persons in Andorra will lose this condition when they purchased the residence in the Principality.

5. Not authorized foreign investments made by natural or legal persons domiciled in countries considered as non-cooperative in the area of money laundering and financing of terrorism defined by the Group of Financial Action Task Force (FATF), as well as to natural or legal persons to whom they report unfavourably on the part of the agencies responsible for the prevention of money laundering.

Article 2 Classes and foreign investments will be materialized by means of monetary contributions or monetary and not carry out through any of the following forms: (a) direct investments, portfolio investments (b), (c) investments in real estate and (d) other forms of investment.

Article 3 collections and payments 1. Payments or payments arising, in its case, of the foreign investments and their settlement should be made through authorized banks in the Principality of Andorra and in accordance with the legislation in force, with the exception of the provisions of paragraph (2).

2. the payment or payments made abroad by reason of the


transmission of direct investments in Andorran companies or branch offices that develop their activities outside Andorra, are not subject to the obligations laid down in paragraph 1.

Article 4 transfer to foreign 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 5 transmission in any case the transmission of foreign investments in the Principality of Andorra shall be subject to compliance with the requirements and conditions established in this law for the class and the form of the corresponding investment regardless of the place where the parties made to be territory of the Principality or abroad.

Article 6 Nullity acts and businesses against this law and are made with the same fraud 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.

Chapter II. Direct investments Article 7 Definition Are direct investments investments that will want to check through the participation in companies of Andorra or the establishment or extension of branch offices.

Article 8 Field direct investments consisting of participation in Andorran companies include the incorporation of the company, the subscription and acquisition of all or part of its shares or social investments, the acquisition of values such as 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 share capital of the company , as well as any legal business in virtue of which acquire political rights.

Article 9 1 Scheme. Direct investments consisting of participation in companies of Andorra have to any of the activities listed in annex I of this law are subject to the prior authorization of the Government when foreign participation in its share capital or voting rights is equal to or greater than 50 percent.

2. In any case, it is necessary to obtain the prior authorization of the Government to make direct investments consisting of any participation in Andorran companies to deploy any of the activities set out in annex II of this law.

3. Also you must obtain prior permission from the Government to make direct investments consisting of the provision or extension of branch offices whatever the nature of the business activities through the branch you want to deploy.

4. However, the direct investments who want to make credit or financial institutions abroad in any sector of the Andorran economy cannot exceed either directly or indirectly of the percentage of participation in the share capital set forth in article 2 letter e) of the law regulating the powers of the various operational components of the financial system.

5. Once the authorization, in accordance with what is established in this article, are subject to prior administrative authorisation, amendment of the corporate purpose, the increase of the share capital, the increase in the percentage of foreign participation or modification of any condition that the authorization had been imposed.

6. The Ministry of economy may require, in general or particular, to Andorran companies participated by foreigners and in branches in the Principality of people or non-resident companies, submit an annual report, in the period and with the content as established by the regulations in force.

Chapter III. Investments in portfolio Article 10 Definition Are investments in portfolio investments that you want to check through the subscription of securities representing borrowings issued by persons, private or public legal entities, resident or physical, Andorra, and participations in investment regulated in chapter IV of the of the law regulating the powers of the various operational components of the financial system of 19 December 1996.

Article 11 The Scheme investments in portfolio are free and are not subject to the duty of prior authorization request, or the duty of registering foreseen in article 20, or the duty of declaration subsequent to the completion of the investment in the registry of investments of the Ministry of economy. However, it requires the prior authorization of the Government the subscription of shares in a venture capital fund or real estate, all or part of the assets of which are invested, respectively, in shares in Andorran companies or in real estate located in the Principality, as long as the percentage of foreign participation allowed by the Fund exceeds 50 per 100. For this purpose, and in any case, the managing bodies of these funds, prior to the granting of the compulsory public deed of incorporation of the same ahead a notary must indicate to the Government of Andorra, the percentage of foreign investment that will allow each Fund, having to get the permission to form them.

Chapter IV. Investments in real estate investments real estate investments Are Definition Article 12 which wish to carry out by means of the acquisition of the ownership and other real rights over immovable property situated in the territory of the Principality of Andorra.

Article 13 the scheme are subject to the prior authorization of the Government investments in real estate who want to make both individuals, which in no case may exceed the acquisition of a plot of land of thousand square meters for the construction of a chalet or tower, or the acquisition of a flat, apartment or Studio, or the acquisition of two parking spaces as legal persons, investments in real estate of which must be necessarily linked to the implementation of the business activity of the legal person. In no case may authorize investment in real estate who want to make legal persons who engage in the acquisition or construction of property in order to sell them, including the lease.

V. other forms of investment Article 14 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, excluding, in the latter case, the investment


regulated in chapter IV of the of the law regulating the powers of the various operational components of the financial system of 19 December 1996.

Article 15 the realization Scheme of qualificables investments as other forms of investment requires in all cases, prior permission of the Government. However, the credits of any nature, whether or not remunerated, which derived from the transfer of own capital in any operating component of the financial system are not subject to the prior authorization of the Government, nor the duties of registering and declaration provided for in this law.

Chapter VI. Powers and procedure of authorization Article 16 the Government is up to the Government, after the report of the Ministry of economy, 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 its prior authorisation.

Article 17 Procedure 1. Requests for authorization of foreign investment have been presented to the Government. It will be mandatory that the Government, upon its decision, obtain a report of the Ministry of economy in relation to every application for foreign investment.

2. In the case of direct investments relating to the fifth paragraph of article 9 of this law, the previous report mentioned in the previous section must be issued by the INAF.

3. In everything that is not specifically set forth in this law, shall apply the code of the administration.

Article 18 Decision 1. The Government, once we receive the required previous report mentioned in the previous article 17, should be taken within a period of 30 working days, a reasoned decision on the application for the authorization of foreign investment on the basis of its form and nature, of the general interest of the Principality and of the protection of the environment, natural resources, the health of its population and the tourism of quality.

2. In the event that following the deadlines within which the Government has to make a decision without having adopted an express agreement, the authorization is understood in any case denied.

Article 19 Implementation The authorized foreign investments should be made in the period specifically indicated the authorization, or failing that, in six months;

After the deadline without that investment has been materialized, the authorization is understood to have expired, unless they get an extension, in the conditions that must be determined.

Chapter VII. Formalization and registration Article 20 Registering except in cases where this law does not require nor the prior authorization of the Government or the subsequent statement, all foreign investment must be formalised in a public document authorized by a notary of Andorra; and, in order 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, with the aim of incorporating them into the matrix.

Article 21 registration and Statement except in cases where this law does not require the subsequent declaration in the registry of investments, the holders of foreign investment and, in his case, the notary who will be authorised the public document in which will formalize or, in default of the above, the Andorran banking entities through which you made payments or collections derived from that and other operating components of the financial system , are required to declare foreign investments and their settlement in the registry of investments attached to the Ministry of the economy within a maximum period of 15 days from the granting of the public document and in the official form. This statement is mandatory regardless of what foreign investment requires prior permission of the Government.

Additional provisions First 1. All payments or collections made in the Principality between residents and non-residents related to foreign investments covered in this law, as well as the transfer to the outside or from the outside, irrespective of the currency with which you xifrin, must necessarily be made through a bank authorised in the Principality of Andorra.

2. The Andorran banking entities and other operating components of the financial system must provide to the Ministry of finance the information you require, with individual character and exceptional circumstances, on the origin, destination and concept of operations related to foreign investments covered in this law where necessary.

3. The Andorran banking entities and other operating components of the financial system must notify the Ministry of finance with quarterly information on aggregate basis and sorted by country of origin and of destination and of the nationality of the ordering party and recipients for any movement of capitals from the outside or on the outside.

4. The Andorran banking entities cannot run any of the operations referred to in paragraph 1 without obtaining the information to which it refers in section 2, unless they are carried out by other components of the financial system, and all persons involved in operations are required to facilitate it.

Second, you create the investment Record, attached to the Ministry of the economy, with the purpose and the skills contained in this law. The Government, through regulatory, you will be able to regulate its operation.

Third, the Government, in accordance with the needs of the economy, must draw up and submit to the General Council, no earlier than two years and not later than six, a plan that establishes the timeframe and the conditions of opening to foreign investment in sectors of the economy that are not included in the annexes of this law. The implementation of the plan referred to by the Government can only be carried out if you get the favorable decision of the General Council.

Transitional provisions the first 1. The individual situations of investment prior to the validity of this law are valid. In any case, will have to declare in the register of investment in the period of one year from the entry into force of this law. Without prejudice to its validity, it also must be declared within the same one-year period the real estate investment funds and risk capital already constituted, with express indication on the part of the respective institutions of the percentage of the maximum foreign investment that can admit those investment funds.

2. However, do not have the consideration of foreign investments and, therefore, are not subject to this law, Andorran companies investments that


prior to the validity of this law have a foreign participation in its capital greater than 50 to 100.

This provision shall not be applicable to the Andorran banking entities that are governed in accordance with the specific regulations of the financial sector and, especially, by the provisions of paragraph b) of article 2 of the law on regulation of the basic administrative regime of the banks of 30 June 1998.

3. Within a period of three months from the closing date of its exercise, the companies mentioned in the first paragraph of the previous section must be presented in front of the Ministry of economy a detailed report of all kinds and forms of investments provided for in this law and its liquidation who have performed in the Principality during the year.

Second the Government through Decree must approve the development provisions of this law and, in particular, the official models of request for authorisation and declaration in the registry of investments, within a maximum period of five months from the publication of this law.

Repealing provision abolishes all provisions of equal or lower rank that conflict with what is established in this law.

Final provision this law enters into force in six months to be published in the official bulletin of the Principality of Andorra.

Casa de la Vall, April 8, 2008, Joan Gabriel i Estany 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 Nicolas Sarkozy President of the French Republic and the Bishop of Urgell Co-prince of Andorra Co-prince of Andorra Annex I Reception of women with accommodations welcoming accommodation with welcoming persons, with accommodations welcoming people with accommodation activities of news agencies activities of libraries and archives activities of residual water treatment and sewerage activities of museums activities of cleaning of roads and waste treatment activities of radio Activities of aid to film production and video Activities for the conservation of historic buildings and sites Activities of fairs and amusement parks, zoos and Botanical Gardens activities, parks and social services activities in home social services Activities for people with decreased activities of services related to the oil and gas holdings, with the exception of the prospecting activities other activities of public sanitation Other textile finishes other shows Other activities related with the show Other sports-related activities Other social services without accommodation other types of lodging accommodations with other types of secondary education technical and professional training Centres and holiday camps & Wellness Centers, activities related to the aesthetics and aesthetic medicine and body wellness Clubs and sports schools, retail trade by correspondence Preparation of other types of apparel and Clothing Accessories women's lingerie manufacture of leather clothing manufacture of work clothes manufacture of sportswear Clothing clothing Clothing underwear for baby and early childhood Aeronautics and space Construction construction of telecommunication lines power lines construction Construction of networks construction and repair of ships Construction and repair of railways artistic and literary Creation; interpretation of drama, music and similar deposit and distribution of cinematographic films and refrigerated storage video tape distribution of films on video tape Editing recorded sound supports publishing books Edition of magazines producing other prepared ice cream Making diet making ready for the development of infant feeding products frozen or chilled fish and other marine products production of fishery products smoked elaboration of cider and other fermented beverages in from fruit production of spices, sauces and condiments broadcast of television programs children's secondary Education secondary education specific training general training in higher education of non-university higher education and postgraduate specialization university higher education schools of pilot Printing of textiles manufacture of leather goods manufacture of textiles manufacture of other transport materials manufacture of other diverse furniture manufacture of other ceramic products manufacture of other technical ceramic products of use manufacture of other pharmaceutical products manufacture of other grain mill products Manufacture other various metal products manufacture of other non-metallic mineral products manufacture of other fruit and vegetable juices manufacture of other textiles manufacture of other general purpose machinery for the manufacture of other types of machinery for specific uses manufacture of other machine tools manufacture of other types of equipment for lifting and handling the manufacture of other types of electrical equipment and materials manufacture of electrical distribution and control apparatus manufacture of reception apparatus , recording and reproduction of sound and image manufacture of non-electric appliances Manufacture of electrical lighting and signalling for transport equipment manufacture appliances Manufacture of appliances and electrical devices for internal combustion engines Manufacture of apparatus for the radiotelefonia and the Telegraph with threads manufacture of ceramic sanitary appliances manufacture of baskets and wicker manufacture of cutlery and cutlery manufacture of leather goods and travel manufacture of sports goods manufacture of jewellery and silverware Manufacturing metal articles of domestic household goods manufacture of elevators, freight lifts, escalators and the like manufacture of corrective lenses the manufacture of perfumes and beauty products and Manufacturing hygiene Virgin Media for recording production of equipment and surgical instruments and orthopedic appliances Manufacture of instruments and appliances for measuring, checking, control, navigation and other purposes, except industrial process control equipment manufacture of bicycles manufacture of imitation jewellery


Manufacture of vacuum or air pumps for liquids production of cocoa and chocolate manufacture of safes and security doors Manufacture of footwear manufacture of hosiery Manufacture of bodywork for motor vehicles, trailers and semi-trailers manufacture of carpets and carpet Manufacture of beer manufacture of dyes and pigments Manufacture of compressors manufacture of canned fruit manufacture of canned fish production of strings , String, icicles and manufacture of glass fibre manufacture of artificial and synthetic fibers manufacture of fibre cement manufacture of sewing thread Manufacture of wires and cables, insulated electrical Manufacture Manufacturing cheese biscuits manufacture of steam generators manufacturing of pullovers, cardigans and similar articles with knitted fabrics manufacture of games and toys manufacture of lamps and electric tubes manufacturing machinery of dry cleaning and dry cleaning machinery Manufacturing of ventilation and cooling not domestic manufacture of machinery and equipment of packing and conditioning manufacture of machinery and equipment for graphic arts production of machinery for the food industry, beverages and tobacco manufacture of machinery for the leather and footwear industries manufacture of machinery for paper and cardboard industries manufacture of machinery for the mining and construction industries manufacture of machinery for the metallurgical industries manufacture of machinery for in the textile and clothing industries, manufacture of office machinery manufacture of machine tools for working metals manufacture of machine tools for working wood, Manufacture of machines for the rubber and plastics manufacture of margarine and similar edible fats manufacture of photographic material and Virgin chemicals for Manufacturing photography to weigh materials manufacture of garden furniture manufacture of office furniture and commercial establishments manufacturing coins and medals Fabrication moulds manufacture of motorcycles manufacture of electric motors, generators and transformers manufacture of engines and turbines, except those intended for aircraft, vehicles cars and mopeds manufacture of locks and fittings Manufacture of pasta alimentoses manufacture of technical parts with plastics manufacture of synthetic binders artificial stone manufacture of bolts, screws, chains and springs manufacture of plates, sheets, tubes and profiles of plastics manufacture of basic pharmaceutical products manufacture of products for feeding animals Manufacturing company of products for feeding farm animals manufacture of radiators and boilers for central heating clock Manufacturing manufacture of bearings manufacture of grape juice manufacture of cotton fabric and its mixtures manufacture of wool fabrics cardada and its mixtures manufacture of wool fabrics sweep and its mixtures manufacture of knitted fabrics manufacture of silk fabrics manufacture of impregnated fabrics racketeers, or coated with plastics manufacture of non-woven fabrics and articles made with these fabrics, except for clothes manufacture of agricultural tractors manufacture of taps and valves manufacture of valves, tubes and other electronic components manufacture of motor vehicles manufacture of vehicles for people with decreased production of hand tools manufacture of mechanical tools manufacture of control equipment for industrial processes making radio and television broadcast equipment manufacture of brooms , brushes and brushes manufacture of pharmaceutical products manufacture of photographic and optical instruments Manufacture of musical instruments manufacture of essential oils manufacture of computers and other data processing equipment training for adults and continuing vocational training management of other sports facilities's management management of stadiums and gymnasiums installation of instruments and measuring devices of the time installation, repair and maintenance of instruments and measuring devices , verification, control, navigation and other purposes, except industrial process control equipment installation, repair and maintenance of equipment and surgical instruments and orthopedic equipment research, development, research and management of intellectual and industrial property maintenance and rewinding of motors, transformers and generators nursery air transport rental singular Works of civil engineering in surface height and organization of trade fairs exhibitions and conferences, preparation of milk, manufacture of butter and other dairy products frozen vegetable Preparation preparation and spinning of other textile fibres preparation and spinning of cotton fibres and their blends preparation and spinning of wool fibers cardada and its mixtures preparation and spinning of wool fibers sweep and its mixtures preparation and spinning of flax fibers and its mixtures Preparation tanning and leather finishing, preparation, staining and tanning of skins fur production and first transformation of precious metals production of films, Production of shows for television production and distribution supports Playback of recorded sound research and development on natural sciences and social sciences and Humanities Research and development about technical repair and maintenance of photographic instruments and optical supports Playback of recorded video reproduction of computer media recorded slaughter cattle Sacrificial meat, preparation and conservation, preparation and preservation of poultry retail sale of antiques and ancient art objects, Home Sales in establishments Selling over the internet Annex II manufacture of heavy arms manufacture of light weapons production of hydraulic energy production of thermal energy production of nuclear energy production of other energy distribution of electric energy production of gas; distribution of gaseous fuels for urban behaviors, with the exception of gas pipelines of steam and hot water production and distribution Gathering, purification and distribution of water, Telecommunications