NEW LAW FOR FOREIGN INVESTMENTS Andorra (August 2012)
After being one of the most restrictive countries regarding foreign investment, Andorra has now published a new corporate law regulating foreign ownership in Andorran companies. The new law significantly liberalises all economic sectors and will be implemented from September 2012.
Accordingly, foreign nationals and companies can now establish companies in Andorra with 100% foreign ownership and in all business sectors. There will be no more need for a local partner.
New, foreign-owned businesses will have to be approved by the Ministry responsible for foreign investments. In principle, however, the permission is always granted as long as the activity does not endanger the country's sovereignty or national security, public order and economy, or environment and public health.
The new law will simplify the process of establishing companies and will open the country for foreign entrepreneurs and capital. It also opens for foreign investments into real estate. Significant positive effects are expected for the country's economy.
Please contact us for further information on the application process and our services.
NEW RULES FOR PASSIVE RESIDENCE PERMIT
After 12 years of unchanged rules, the new law for passive residence permits has finally been published, and all new applications will be processed according to the new law. The main changes are:
1. The government deposit has increased to € 50,000 from € 30,000. This will remain refundable but interest-free, and will be returned should the resident leave the country in the future.
2. The obligatory annual stay in the country is reduced to only 90 days from 183 days. This considerably increases flexibility of the resident, who can spend 9 months abroad each year and still be taxed according to Andorran laws.
3. From certain applicants, retired, i.e. no longer actively working, will be required to invest € 400,000 in Andorra as part of the application process. This investment can be made either in real estate, as a bank deposit, as an investment in an Andorran company, or as an interest-free deposit to the INAF (National Financial Institute). Applicants active within international business, sports, culture, arts or research and development are not required to place this investment, to be granted residency.
Our view is that these changes are very positive for most applicants due to the reduced obligatory stay of only 90 days. Most of our clients purchase an Andorran home anyway, so the investment requirement will hardly have an impact. We see the new changes as one step in modernisation of Andorra’s laws, and expect continued strong interest in obtaining residency in one of Europe’s most attractive countries.
OPENING FOR FOREIGN INVESTMENTS IN ANDORRA
The Andorran Government is proposing to change the company law giving foreigners opportunity to hold 100% of local companies. Until now only 49% plus a local trustee structure was possible. This will be a major change, which should attract more business to Andorra. The new law is expected to take effect during 2012.