Changes regarding foreign investment in real estate in Andorra and immigration 2025

A new bill has been presented with changes regarding foreign investment in real estate in Andorra and immigration for 2025. This new bill in Andorra, presented by the Minister of the Presidency, Economy, Labour and Housing, Conxita Marsol, together with the Minister of Justice and the Interior, Ester Molné, serves to continue and consolidate the measures promoted in the Law for Sustainable Growth and the Right to Housing, also known as the Omnibus Law.

The purpose of this new law is to increase the financial requirements for foreign investment in Andorra and improve immigration control in the country.

The changes proposed in the new bill will not be retroactive and will apply from the date the law comes into force.

News related to foreign real estate investment in Andorra

The IEI (Foreign Real Estate Investment Tax) will be modified. For the first property, it will be 6% of the actual value of the investment, whether it is intended for the construction or acquisition of a single-family home, flat or apartment, with a maximum of three parking spaces and a storage room. For all other foreign real estate investments, either because they exceed the above characteristics or because the investment is for more than one property, the tax will be set at 10%.

Changes relating to active and passive residence in Andorra

The reservation system currently applicable to certain self-employed workers is extended to qualified professionals. They will have a period of three months to prove that they meet the requirements, which include authorisation to practise their profession and, where applicable, membership of the relevant professional association.

The mandatory deposit of €50,000 that was paid in full to the AFA (Andorran Financial Authority) for the authorisation of residence and self-employment, also known as active residence, is now partially converted into a non-refundable income. In other words, €30,000 will go to the State to strengthen public policies of national interest such as health, education, security, transport and infrastructure in the country.

For the main applicant for non-profit residency – passive residency, €30,000 of the total amount contributed will also go to the State. And of the €12,000 required for each dependent, half will go to the State.

In summary, these amounts going to the State are mandatory, definitive and non-refundable.

The minimum investment amount required for applicants for passive residency in Andorra will increase from €600,000 to €800,000. Likewise, a new type of investment in financial or debt instruments issued by entities domiciled in Andorra is established, which will be subject to a maximum term of 36 months. After this period, the investment must be transferred to other national assets.

New temporary authorisation for recruitment in the country of origin

One of the main new features of this bill is the creation of a temporary immigration authorisation linked to recruitment in the country of origin, which will allow for the collective processing of employment contracts directly in the workers’ countries of origin. This new instrument, which will be regulated by the Government, will enable the joint management of multiple temporary permits, with the aim of streamlining and optimising temporary recruitment procedures, without undermining the guarantees established in current legislation. A specific fee of €190.96 is also established for the issuance of this authorisation.

Sole transitional provision. Applications for foreign real estate investment and immigration submitted prior to the entry into force of the Act

1. Applications for foreign real estate investment submitted prior to the entry into force of this Law shall be governed by the tax rates in force on the date of their submission.
2. Applications for residence and self-employment permits, as well as those for residence without gainful activity, registered prior to the entry into force of this regulation, shall continue to be processed in accordance with the regulations applicable at the time of their submission.
3. The deadline for submitting amendments shall be 5 November, as this Law has been processed under the urgent procedure.
4. This Law shall enter into force on the day following its publication in the Official Gazette of the Principality of Andorra (BOPA).

Table comparing the changes in the new bill