Andorra: Country and Foreign Investment
Foreign Investment Regime
The Andorran administration has no formal investment incentive schemes other than offering some financial support for the development of tourist facilities. Until recently, foreign investment into the financial services sector was highly circumscribed (see Offshore Business Sectors), and foreign involvement in domestic business (as opposed to offshore activity) was limited to minority stakes in most sectors. However, with the introduction of the Foreign Investment Law in November 2008, foreigners were permitted to hold 100% of a business in one of the 200 designated economic sectors. This reform was viewed by the government as an important step in Andorra's programme of reforms which are aimed at opening, modernising and diversifying the national economy.
In a move to attract investment into the country following the global financial crisis, a new law came into force in 2012. The Foreign Investment Law of July 2012 allows 100% ownership of any company or trading enterprise by foreign residents and non-residents alike. Any investment which is less than 10% of the capital or voting rights may be made freely and does not require approval by the authorities. Investments of 10% or above require permission from the Ministry of Finance and a decision should take no longer than six weeks to be obtained.
However, non-resident property development companies are not permitted to develop property in the country. Furthermore, non-resident companies are only permitted to buy property intended for their own business use, such as warehousing etc.
Investors, be they individuals or companies, must open an Andorran bank account to pay for their investments and will therefore be subject to due diligence checks carried out by the bank. Investments originating from a country suspected by the OECD to not be compliant with internationally recognised standards on money-laundering will not be approved.