Secretive Andorra opens up to foreign investments

Andorra is an old tax haven in Europe and is well known for its bank secrecy. Andorra plan to liberalize foreign investments and foster more economic openness. This comes as part of Andorra’s policy in the past few years to open its economy.

Back in 2008, Andorra had enacted a law to reduce protectionism in the Principality, and allow 100% foreign ownership in Andorran companies. However, in its recently published implementing regulation, the Andorran government observes this has not been enough and argues that it is necessary to liberalize further.

Under the new law, foreign individuals wanting to exercise a profession in Andorra will no longer be required to have been resident in Andorra for at least 20 years, provided there is a reciprocal agreement between Andorra and the relevant foreign country.

However, a system of authorizations from the administration still applies. Prior authorizations are required for foreigners to own property in Andorra, unless they are individuals resident in Andorra. All investments in at least 10% of the capital or voting rights of an Andorran firm also require prior authorization. Quantitative restrictions on ownership of real estate by foreigners (previously no more than two flats per individual) will be abolished. Portfolio investments do not require authorization, but they must be reported to the registry of foreign investments in the event they are in substance akin to direct investments.