Law 2/2026 in Andorra (Omnibus II): new residency requirements, mandatory deposit and foreign investment rules

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Law 2/2026 (Omnibus II): consolidation, tightening and a new balance in immigration and investment

In April 2025, Law 5/2025, known as the Omnibus Law, entered into force in the Principality, marking a turning point in Andorra’s growth model. That reform clearly reflected the intention to ensure balanced national development, which in practice translated into new limitations on foreign investment.

Less than a year after its entry into force, and considering the effects of the previous reform insufficient, the Government enacted Law 2/2026, doctrinally referred to as Omnibus II. This new law does not introduce a new paradigm, but it consolidates the existing one, reinforces it and closes certain regulatory loopholes.

The Government identified circumvention mechanisms within the new investment regime, the instrumental use of Andorran companies, uncertainty surrounding the deposit framework, and the need to strengthen oversight of temporary authorisations — these being the core areas addressed by the new law.

This is therefore not an expansive reform, but rather a measure of legal precision and structural control, with the still-evident pressure on the real estate market remaining its central axis.

Broadly speaking, its objectives are as follows:

• Limit pressure on the real estate market
• Strengthen the genuine economic commitment of new residents
• Prevent artificial structures in foreign investment
• Expand administrative control capacity
• Consolidate the shift towards a more selective and sustainable model

The main affected areas are outlined below.

Block I — Immigration: higher standards and increased oversight

Law 2/2026 significantly amends Immigration Law 9/2012.

It does not alter the structural framework of the system, but it raises the level of requirements across nearly all residence categories. The underlying principle is clear: access to Andorran residence must reflect a genuine commitment, not merely a formal one.

🔹The deposit for self-employed residence: change in legal nature

Until now, this residence category required a €50,000 deposit, refundable upon loss of resident status. Under the new law, it no longer qualifies as a refundable guarantee linked to continued residence.

For further detail, see the article “The Residency Deposit in Andorra: Origin, Evolution and Applicable Regimes”.

It is now structured as a non-refundable payment to the State, independent of the duration of residence and not subject to future reimbursement.

This fundamentally alters its legal nature, transforming it into a definitive State revenue.

❗ This change has a direct impact on the financial planning of any entrepreneur seeking to establish themselves in Andorra.

For further analysis, we recommend the article “Self-Employed Residence in Andorra: Requirements, Advantages and Real Tax Framework”.

🔹Residence without gainful activity: higher investment, reduced flexibility

The passive residence regime also undergoes a significant shift. The minimum required investment in Andorran assets increases from €600,000 to €1,000,000, on a permanent and effective basis.

Likewise, as with self-employed residence, the €50,000 deposit becomes non-refundable, as does the additional €12,000 deposit per dependent.

Further restrictions apply to asset allocation. Where the investment is made wholly or partially in real estate, the amount must exceed €800,000 per individual property unit.

Additionally, if certain debt or financial instruments are chosen, they must be reinvested in other qualifying assets within a maximum period of 36 months.

The conclusion is clear: access to this category becomes more selective, more capital-intensive and better aligned with solid wealth profiles.

➤ For more information, see “Passive Residence in Andorra: Evolution, Requirements and Legislative Changes”.

🔹Temporary permits: the end of automatic flexibility

Temporary authorisations become non-extendable, and renewals are subject to predefined regulatory deadlines. Grounds for cancellation are expanded in cases of non-compliance with working hours, sector limitations or specific requirements.

The system significantly reduces the ability to chain temporary permits automatically.

🔹Hiring from abroad: efficiency with accountability

Law 2/2026 introduces a new temporary immigration authorisation for recruitment from abroad, allowing collective processing of employment contracts and simultaneous management of multiple permits.

The aim is to increase procedural efficiency without weakening the safeguards of the Andorran legal framework.

However, this administrative facilitation is accompanied by enhanced financial responsibility: a specific fee of €190.96 per authorisation is introduced, payable by the employer. This amount may be offset against sums owed as part of the employee’s final settlement if the employee resigns within the first three months, thereby introducing a mechanism of shared responsibility.

This is therefore a facilitative measure, but one clearly oriented toward control and employer accountability

🔹Ex post control and revocation: from formal compliance to ongoing monitoring

One of the less visible yet most significant changes is the reinforcement of post-grant supervision. The authorities no longer verify compliance solely at the time of approval, but throughout the validity and renewal period.

This translates into:

• increased authority to cancel temporary permits in cases of deviation from declared activity or non-compliance
• cancellation where the permit holder works more than 52 hours per week in total, or more than 12 hours per week in a sector other than the authorised one
• reduced scope to use permits as temporary or strategic tools
• reinforcement of the principle of coherence between residence status, declared activity and actual economic situation
• administrative power to revoke or annul permits in cases of inactivity, structural inconsistency or substantial irregularities

In practical terms, legal risk no longer concentrates solely at the moment of obtaining the permit, but extends to the continuous maintenance of qualifying conditions.

The legislator’s message is clear: Andorran residence is not a one-off administrative step, but a legal status requiring sustained coherence over time.

You may expand on this in the article “Changes in Immigration and Foreign Investment in Andorra: Towards a More Restrictive Model”.

🔹Temporary blocking in cases of inactivity

Law 2/2026 also strengthens control over the genuine continuity of entrepreneurial projects. Where renewal of a self-employed residence permit is rejected twice consecutively due to lack of activity or effective residence, the applicant may not reapply for the same authorisation for at least twelve months.

The same temporary restriction applies in cases of voluntary withdrawal or voluntary deregistration.

Block II — Foreign investment: expanded scope and closure of loopholes

Law 2/2026 does not redefine the concept of foreign investment (already addressed by Law 5/2025), but consolidates its scope, reinforces systemic coherence and removes interpretative ambiguity.

Foreign investment status continues to apply where:

• the individual is resident but cannot prove at least 3 years of residence within the previous 10 years
• an Andorran company has foreign participation of 50% or more, directly or through intermediate entities
• an individual subsequently loses Andorran residence (subsequent foreign qualification)

This last point is particularly significant: the qualification of an operation is no longer static. If residence status changes, the investment may retroactively acquire foreign status.

This may trigger the foreign investment authorisation regime and the Foreign Real Estate Investment Tax, along with potential administrative liabilities.

The system thus becomes dynamic: compliance must be maintained over time.

➤ Learn more in “Foreign Investment Authorisation in Andorra: When It Is Required and How It Is Processed”.

🔹Elimination of the transitional regime

One of the clearest substantive changes introduced by Law 2/2026 is the repeal of the third transitional provision of Law 5/2025 (Omnibus Law). With this repeal, the temporary framework that had allowed the continued application of the previous regime to certain pending situations definitively disappears: the adaptation period is deemed to be concluded.

The model established by the first Omnibus Law ceases to operate as a transitional system and acquires a fully structural and consolidated character from its entry into force.

In practical terms, this removes any expectation of flexibility based on timelines or on situations initiated prior to the entry into force of the reform..

🔹Sanctioning regime

In cases where a foreign investment authorisation is required and is not requested, or where information is misrepresented or falsified, this may result in the nullity of the transaction, administrative sanctions, or the assessment and enforcement of the applicable tax, together with the corresponding surcharges.

Block III — Commerce: strengthened regulatory authorityn

Although the regulatory framework governing commerce or commercial authorisations is not substantively modified, certain changes do generate, in practice, a significant impact. In particular, the main changes are as follows:

• reinforcement of the Government’s competence to limit authorisations, which may be further developed at regulatory level
• introduction of socio-economic criteria in the authorisation process
• possibility to assess the impact on the market or on employment
• adaptation of authorisations to considerations of general interest

The law does not establish specific criteria itself, but instead empowers the Government to define them through regulatory instruments.

According to recent parliamentary activity, the possibility is being considered of refusing new applications that could generate excessive tension in the labour market — such as in the restaurant or hospitality sectors — with the objective of preventing artificial wage inflation caused by labour shortages, or structural misalignment between supply and market demand.

Although this approach may be characterised as protective in nature, its ultimate objective is to ensure the economic viability of businesses and individuals.

Block IV — Foreign Real Estate Investment Tax

Law 2/2026 amends Law 3/2024 on the Foreign Real Estate Investment Tax, introducing a particularly relevant change: the increase of the general applicable rate.

The minimum tax rate increases from 3% to 6% on the value of the investment classified as foreign, with both a deterrent and revenue-generating purpose, while the maximum rate of 10% remains in force.

The objective is twofold:

• to discourage certain acquisitions of a purely speculative nature
• to increase fiscal capacity linked to housing policy measures

In this new context, the correct classification of a transaction as foreign investment ceases to be merely a formal matter and becomes a central element of financial planning and structuring.

🔹Sanctioning regime

If the investment is not properly declared, is incorrectly classified, or there is an attempt to avoid application of the 6% rate without meeting the legal requirements, the general tax penalty regime will apply.

➤ You may expand on this in the article “The Foreign Real Estate Investment Tax in Andorra: Purpose, Structure and Practical Application”.

➤ Likewise, if you wish to explore the existing reduction mechanism, see “The 90% Reduction of the Foreign Real Estate Investment Tax in Andorra”.

Four structural messages of Law 2/2026

Although its scope is not as foundational as that of Omnibus Law 5/2025, this new law conveys four clear structural messages:

1. the economic commitment of new residents is intended to be real and definitive
2. access to passive residence is significantly tightened, with the evident intention of substantially limiting its potential obtainment
3. avenues for circumvention in real estate investment are closed
4. the State strengthens its regulatory authority in matters of commerce and immigration

Accordingly, Andorra moves even further toward a selective model rather than one based on volume, taking into account its territorial, labour, economic and social realities.

Practical impact for investors and new residents

For those considering establishing themselves in Andorra, the question is no longer merely fiscal, but structural and long-term in nature. Viewing Andorra as a temporary solution has become more complex than before, which makes it particularly relevant to analyse:

• which type of residence genuinely fits the individual’s profile
• what impact a future loss of residence may have
• how to structure an investment correctly from the outset
• how to avoid risks of annulment or revocation

The role of a specialised advisor therefore becomes more relevant than ever.

A more selective Andorra, not a closed one

Law 2/2026 consolidates the shift initiated by Law 5/2025, toward a more restrictive and controlled model. The possibility of relocating to the Principality is not eliminated, but the requirements are strengthened in order to preserve the country’s socio-economic stability and ensure that existing resources (water, infrastructure, electricity) remain sufficient for residents.

What is clear is that the Government seeks to prevent abuse, to ensure not only formal compliance with the law but also adherence to the purpose for which the rules were conceived, and to guarantee that new capital — whether human or economic — is directed toward genuine activity and long-term commitment, avoiding opportunistic or speculative operations.

📞Do you have questions about how these changes may affect you?

If you are considering relocating your residence or structuring a real estate investment, it is essential to understand how your profile fits within this new framework.

You may contact us through the contact form or book your meeting at the bottom of the page in order to analyse your situation with technical rigor and strategic vision.

Last review: February 2026