The liberalization of foreign investment in Andorra
Andorra Expats | 05.19.2016 | MoraBanc editorial staff
Since 2011, the Andorran government has introduced several new laws aimed at encouraging private foreign investment. The goal of these laws is to diversify the economy through the creation of new economic sectors and by increasing competition among existing companies. Ever since these laws favoring liberalization were put into place, foreign investors have flown into the country much as the snowmelt from Andorra’s snow capped mountains transforms into gushing waterfalls. A new economic framework was introduced, allowing Andorra to step down from its isolated mountaintops and join its neighbouring countries in a more egalitarian economic competition.
Recently introduced Andorran laws favor the liberalization of foreign investment
Prior to 2012 several laws were put into place designed to modernize Andorra’s legal structure and to increase economic activity. These changes acclimated the economy to foreign capital, laying the foundation for the Law 10/2012 on Foreign Investment in the Principality of Andorra.
This law granted the liberalization of foreign investments, opening up all economic sectors to foreign inventors in the hopes of diversifying Andorra’s economy. This law coupled with the signing of agreements preventing double taxation with France, Spain and Luxembourg have placed Andorra on the global economic chessboard, attracted new economic sectors and companies while increasing competition within the country. These changes have introduced a wide array of international ideas, transforming Andorra into an increasingly attractive destination for foreign investors to develop their businesses.
Foreign investments in Andorra may occur in several settings:
• Non-Andorrans or individuals who are not residents (expatriates with temporary residency permits are subject to the law)
• Foreign public entities
• An Andorran company which has a foreign shareholder
• Permanent establishments or company branches in Andorra owned by foreigners of non-residents
The above foreign investors are permitted to make the following types of investments in Andorra:
• Invest in shares of companies already established in Andorra
• Purchasing property or partial share in property located in Andorra
• 100% ownership of an Andorran company
Investments are not permitted under the following circumstances:
• The funds to be invested are from countries not signatory to FATF (Financial Action Task Force on Money Laundering)
• Individuals or legal entities who have received negative reports from FATF
• Foreign investments which may have negative effects on the Andorran government, economy, the public, national security or the environment
Taxation on income generated by foreign investment
The Andorran government considers an individual to be a fiscal resident if they reside in Andorra more than 183 days a year or if the individual’s main economic activity is directly or indirectly centred in Andorra. All fiscal residents are subject to IRPF income taxes. IRPF income tax-rates are extremely low however they vary depending on the individual’s net income; see the following chart for details:
| Income | IRPF income tax-rate |
| Less than €24,000 | Exempt |
| Net income €24,001 – €40,000 | 5% |
| Net income of more than €40,000 | 10% |
| Income from savings the first €3,000 | Exempt, the remainder pays 10% |
How to set up a company in Andorra
Due to new Immigration Laws foreign investors are now allowed to create and own 100% of an Andorran Company. Expatriates looking to form their own company should apply for an Active Residency permit once their business proposal is accepted. The following list gives detailed information on how to set up a company in Andorra:
• Legalized police certificate from your main country of residence
• A copy of your passport which bears the Apostille of the Hague Convention
• Obtain a local trade license (or Obertura de Comerç in Catalan) and reserve a company name
• Obtain a work permit for the shareholder(s)
• Apply to Andorra’s social security system, CASS
• Provide proof of a rental contract or property title
• Certificate of civil status
Once a foreign investor looking to set up a company has compiled the above papers a public deed needs to be drawn up by an Andorran Notary. Once this process, which can take up to 15 days, is completed the company gains its legal identity and is entered in the Andorran Company Register.
Information on the processing of personal data
In compliance with Law 15/2003 of 18 December on protection of personal data, the customer authorizes that the applicant’s personal data entered on this form will be incorporated into files owned and managed by MORA BANC GRUP, SA – MORA BANC, SAU (hereafter referred to as “MoraBanc”) to process the requested service and, if necessary, to comply with the contracts finally entered into, and also to ensure correct operational procedures.
The applicant expressly authorises MoraBanc to send him/her commercial and promotional communications for products and services and information on the Bank itself, social or other activities, in hardcopy by post or by electronic means (among others, short messages (SMS) to mobile phones, e-mail, etc.). This consent can always be withdrawn, without retroactive effect.
The fact of filling out this form implies that the applicant acknowledges that the information and personal data provided are true, accurate and correct; otherwise, MoraBanc declines all responsibility for the lack of truthfulness or correctness of the data.
The applicant authorises the data provided to be communicated or shared with third parties forming part of the MoraBanc business group, entities which are primarily active in the financial, insurance and service sectors. The applicant is considered as having been informed of this transfer of information by means of this clause. The applicant accepts that he/she may be sent information on any product or service marketed by these companies.
The data processing manager is MoraBanc. The applicant is hereby informed that the rights of access, rectification, suppression or opposition may be exercised in the terms established in current legislation.
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Information on the processing of personal data
In compliance with Law 15/2003 of 18 December on protection of personal data, the customer authorizes that the applicant’s personal data entered on this form will be incorporated into files owned and managed by MORA BANC GRUP, SA – MORA BANC, SAU (hereafter referred to as “MoraBanc”) to process the requested service and, if necessary, to comply with the contracts finally entered into, and also to ensure correct operational procedures.
The applicant expressly authorises MoraBanc to send him/her commercial and promotional communications for products and services and information on the Bank itself, social or other activities, in hardcopy by post or by electronic means (among others, short messages (SMS) to mobile phones, e-mail, etc.). This consent can always be withdrawn, without retroactive effect.
The fact of filling out this form implies that the applicant acknowledges that the information and personal data provided are true, accurate and correct; otherwise, MoraBanc declines all responsibility for the lack of truthfulness or correctness of the data.
The applicant authorises the data provided to be communicated or shared with third parties forming part of the MoraBanc business group, entities which are primarily active in the financial, insurance and service sectors. The applicant is considered as having been informed of this transfer of information by means of this clause. The applicant accepts that he/she may be sent information on any product or service marketed by these companies.
The data processing manager is MoraBanc. The applicant is hereby informed that the rights of access, rectification, suppression or opposition may be exercised in the terms established in current legislation.
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