Foreign investment in Andorra on the rise

Andorra offers an interesting combination of attractive taxation with high quality of life. In recent years, Andorra has made important advances so that foreign investors see the Principality as a safe destination and in accordance with international laws for their business.

Since the approval of Law 10/2012 on Foreign Investment in 2012, which allows 100% of the capital of an Andorran company to come from abroad, foreign investments have continued to grow. The purpose of this law is to promote economic openness for both the new and traditional sectors of the country.

It should be noted that Andorra, in its effort to adapt to European regulations, is very strict regarding the origin of foreign capital. For this reason, Andorra dismisses foreign investments:

  • of resident, domiciled or national natural persons, or legal entities from some of the countries that do not cooperate with the International Financial Action Group (FATF), the entity in charge of developing and promoting policies to combat money laundering and terrorist financing.
  • of individuals or legal entities that obtain an unfavorable report related to the prevention of money laundering and terrorist financing.
  • that interfere or harm the exercise of public power, sovereignty and security of the country, public and economic order, the environment, public health or the general interest.

Since 2017, an upward trend has been observed, however, the increase in investment volume of 82% in 2019 compared to the previous year is impressive. It should be noted that 94% of the applications received have been approved and 77% of the companies have formalized the investment. It is a capital of around 790 million euros. The investment made in 2019 is 10 times that registered in 2013.

The capital investment was the one that attracted the most capital to the country, followed by the provision of services and real estate development and construction. Most of the investments that have been formalized in Andorra come from neighboring countries: Spain with 45.5% and France with 25.2%.