Foreign investment authorization in Andorra: when it’s required and how to obtain it

Reading time: 9 minutes

🏁 Introduction

The foreign investment authorization regime in Andorra has become a key instrument to channel international capital in an orderly and secure way.

Since Law 10/2012, Andorra has allowed full foreign participation in local companies and projects. However, reforms introduced by Law 5/2025 (the “Omnibus Law”) and Decree 137/2025 have modernized the procedures, tightening controls on beneficial ownership and the origin of funds.

Today, foreign investment goes well beyond real estate acquisitions — it also covers company formations, capital increases, share transfers and any change of control within Andorran entities.

➤ To better understand the broader framework, you can read the article on Law 5/2025, the Omnibus Law.

⚖️ When foreign investment authorization is required

🏢 Incorporation of new companies

Prior authorization is required whenever non-resident individuals or entities participate in the incorporation of an Andorran company, or when the new entity will have a direct or indirect foreign ownership of 10% or more of the share capital or voting rights.

The authorization must be obtained before the notarial signing, and both the notary and the Companies Registry must verify its existence before registration.

🏠 Companies with foreign capital

A company is considered to have foreign capital when a non-resident person or entity directly or indirectly controls more than 50% of the share capital or voting rights.

In such cases, the company must:

• be registered as a foreign investment in the Foreign Investment Register,
• be subject to enhanced control by the Ministry regarding ownership changes, and
• if it acquires real estate, automatically fall under the foreign real estate investment regime.

➤ For more information, see our article on the Foreign Real Estate Investment Tax in Andorra.

💰 Capital increases and shareholder changes

The following situations are also treated as new foreign investments:

• a foreign shareholder increases their participation, or
• a new non-resident investor joins the company.

These operations require prior authorization, which must be obtained before executing the public deed.

If the capital increase is carried out entirely with internal funds or among already authorized shareholders, no new authorization is needed.

💡 Example: an Andorran company increases its capital and a French or Spanish partner subscribes to new shares → a prior authorization must be obtained and beneficial ownership information updated.

🧾 Amendment of bylaws

Not every amendment requires authorization. It becomes necessary only when the change:

• involves the entry or control of a foreign investor, or
• introduces regulated or sensitive activities (financial, investment or real estate sectors).

Purely formal changes — such as the registered office, company name or governance structure — do not require authorization.

💡 Example: a service company adds “real estate promotion” to its corporate purpose → prior authorization is required.

🏘️ Acquisition of real estate by companies

A distinction must be made between companies with foreign capital and ordinary Andorran companies.

🟠 Companies with foreign capital

When an Andorran company with foreign ownership of 50% or more acquires property in Andorra, the transaction requires prior authorization under the Foreign Real Estate Investment regime (Law 10/2012 and Decree 137/2025).

There is no minimum value or percentage threshold: any acquisition made by a company controlled or owned by foreign investors must be authorized.

🟢 Ordinary Andorran companies

If most shareholders are residents for more than three years, or non-residents do not hold the majority of voting rights, no authorization is required for real estate purchases.

➤ See the article on Andorra’s real estate market: prices, new developments and access to housing for further context.

📋 Additional obligations for companies with non-resident shareholders

As mentioned earlier, non-residents are allowed to incorporate companies in Andorra, but certain additional obligations apply depending on their activity:

• Passive or holding companies: must keep their registration, tax and beneficial ownership data up to date.
• Active operating companies: must start real business activity within 18 months of incorporation.

If this deadline is not met, the Ministry may revoke the authorization and cancel the company’s registration in the Foreign Investment Register.

This revocation does not entail a financial penalty, but the company loses its status as an authorized foreign investment, effectively blocking future transactions until regularization.

🚫 Denial or prohibition of authorization

The Government may refuse authorization if the investment:

• originates from high-risk jurisdictions identified by the FATF or the EU,
• involves individuals with criminal records for intentional offences, or
• could threaten public order, security, the environment or public health.

🗃️ Declaration and subsequent control

Once formalized, every authorized foreign investment must be declared to the Foreign Investment Register.

The investor must keep up-to-date information on:

• the ownership and control structure,
• the ultimate beneficial owners (UBO), and
• the origin of funds.

The Administration may request supporting documentation at any time (Decree 137/2025, Articles 8 and 12).

⚠️ Consequences of failing to obtain authorization

If the required authorization is not obtained:

• the transaction cannot be notarized or registered,
• an administrative sanction and suspension of the investment may be imposed, and
• the Foreign Investment Register may block future operations until compliance is achieved.

🧭 In summary

Andorra’s foreign investment authorization system aims to ensure transparency and legal security in all cross-border transactions involving international capital.

👉 Key takeaways:

• Prior authorization required when a non-resident participates or foreign ownership ≥ 10%.
• Mandatory declaration to the Foreign Investment Register.
• Ongoing control of beneficial ownership and source of funds.
• Supervision by the competent Ministry.

With Law 5/2025 and Decree 137/2025, Andorra strengthens its position as an open yet responsible and sustainable investment destination.

If you would like to know more, don’t hesitate to request a consultation or contact us through our form.

Last reviewed: November 2025