Since the economic liberalisation introduced by Law 10/2012, Andorra has established itself as an attractive destination for international investment, encouraging the establishment of foreign companies and the inflow of capital into various sectors of its economy.
However, the growth in investment, combined with pressure on the real estate market and the need to promote higher value-added economic activities, prompted the Andorran Government to review this model. Against this background, Law 5/2025 of 6 March, on Sustainable Growth and the Right to Housing, commonly known as the “Omnibus Law”, entered into force on 16 April 2025 and was further developed through the Foreign Investment Regulation of 9 April 2025.
The new legislation distinguishes between foreign direct investment, primarily linked to shareholdings in companies and the establishment of business activities, and foreign real estate investment. Among its main developments are restrictions on property acquisitions by foreign investors, limitations on certain real estate development projects and, most notably, the introduction of monitoring mechanisms to verify that authorised investments are actually implemented and comply with the applicable conditions.
This new approach entails greater post-authorisation oversight of investments, implemented through various obligations and verification mechanisms. Firstly, as a general rule, authorised investments must be completed within six months, unless the authorisation establishes a different deadline or an extension is granted. Furthermore, companies subject to the new foreign direct investment regime must demonstrate that they are carrying out genuine economic activity within the statutory 18-month period, providing the relevant financial, accounting and corporate registry documentation. These requirements are complemented by the monitoring powers of the Foreign Investment Registry, which may verify compliance with the applicable conditions, request supporting documentation and oversee changes to registered investments.
The legislation also establishes a sanctions regime that may result in fines and, in the circumstances provided for by law, the invalidation of the investment or even the company itself. As a result, foreign investment is no longer viewed solely as an inflow of capital but is increasingly linked to the development and maintenance of a genuine, verifiable business project.
In May 2026, the Government of Andorra presented its first assessment of foreign investment trends following the adoption of the new regulatory framework. Official data revealed several trends which, according to the Andorran Government, suggest a more selective approach to investment projects and a shift towards directing foreign capital into higher value-added activities.
In this context, companies wishing to establish themselves in the Principality must pay particular attention to the feasibility and consistency of their business projects, the financial forecasts submitted to the authorities and their ability to subsequently demonstrate that the committed business activities have been carried out. Similarly, investors already operating in Andorra should review the obligations applicable to their investments, the conditions attached to their existing authorisations, and their reporting and registry update requirements, taking into account the relevant transitional provisions.
Proper investment planning, together with effective monitoring of post-authorisation obligations, enables companies and investors to anticipate risks, facilitate the establishment of their business projects and adapt to the new requirements of Andorra’s regulatory framework.
