Investing in Andorra: Real Estate and Businesses

Investing in Andorra can take several forms: buying property, taking a stake in a company, starting a business, subscribing to a fund, or holding Andorran financial instruments.

Investing and residency are two separate matters. Someone can invest without becoming a resident. Conversely, certain permits require a precise level and category of investment.

The right strategy depends on expected returns, risk, liquidity, taxation, and the goal: income, business growth, residency, diversification, or succession planning.

The main categories

Investment	Possible goal	Point to watch
Residential property	Personal use or rental	Authorisation, foreign investment tax, and net return
Commercial property	Business or professional letting	Tenant, IGI, works, and local market
Andorran company	Business growth	Business plan, bank, and genuine activity
Stake in a company	Growth or diversification	Governance, valuation, and liquidity
Andorran fund	Financial investment	Strategy, fees, risk, and term
Public debt or instruments	Preservation or allocation	Return, maturity, and liquidity

Investing without residing

A foreign investor can acquire certain Andorran assets, subject to applicable authorisations and taxes.

They need to identify, in particular:

• their foreign investor status;
• prior authorisation;
• the origin of the funds;
• the beneficial owner;
• tax obligations;
• the bank;
• the notary;
• future filing obligations.

Investing alone doesn’t automatically grant a right to residency.

Real estate: return and total cost

Before buying, the calculation needs to go beyond the price per square metre.

It’s necessary to include:

• foreign real estate investment tax;
• ITP or IGI, depending on the transaction;
• notary fees;
• financing;
• service charges;
• works;
• municipal fees;
• vacancy;
• management;
• taxation on rent;
• resale costs.

Since 2026, the foreign real estate investment tax has been set at 6% or 10% depending on the category. A first unit and additional investments aren’t necessarily treated the same way.

Returns need to be calculated after these costs, not just on gross rent.

Real estate and passive residency

Buying a property can count towards the investment required for residency without gainful activity, but the permit’s rules are specific.

For new applications:

• general threshold of €600,000;
• more than €600,000 per real estate unit used in the calculation;
• deposits with the AFA, deducted from that threshold and refundable;
• annual means;
• insurance;
• quota;
• maintaining the investment.

Buying two €500,000 properties therefore isn’t equivalent, for this permit, to acquiring a single unit above the required threshold.

Investing in an existing business

A stake in an Andorran SME can offer access to a genuine activity and a local market. It requires due diligence.

It’s necessary to examine:

• annual accounts;
• tax and social security debts;
• contracts;
• employees;
• licences;
• disputes;
• beneficial owners;
• reliance on certain clients;
• valuation;
• the shareholders’ agreement;
• exit conditions.

Buying shares doesn’t erase the company’s history. Warranties and pricing terms need to be negotiated.

Starting a new business

Starting from scratch means building a structure of your own, but it requires a business plan, foreign investment authorisation, a bank, a registered office, and a genuine activity.

The law requires monitoring of companies with direct foreign investment and requires genuine economic activity within 18 months.

The budget needs to cover:

• capital;
• incorporation;
• premises;
• salaries;
• tools;
• marketing;
• working capital;
• accounting;
• fees;
• the time before income starts coming in.

Funds and financial instruments

Funds, debt securities, life insurance, or other Andorran instruments can meet investment goals or form part of certain residency strategies.

Before subscribing, analyse:

• the entity’s authorisation;
• the documentation;
• the strategy;
• fees;
• valuation;
• liquidity;
• the time horizon;
• currency risk;
• taxation;
• exit conditions.

A promised return needs to be weighed against risk and the funds’ actual availability.

Personal ownership or through a company

A company can make governance and reinvestment easier, but it adds costs.

The comparison needs to include:

• income tax;
• distributions to shareholders;
• financing;
• liability;
• succession;
• accounting;
• disposal;
• the country where the assets are located.

A holding company suits shareholdings. An asset-holding company can be considered for other assets. Personal ownership sometimes remains the simplest solution.

Investing from France, Spain, or Switzerland

The investor’s country of residence can tax Andorran income, capital gains, or assets.

It’s necessary to check:

• the tax treaty;
• reporting obligations for accounts and assets;
• withholding taxes;
• wealth tax;
• shareholdings in a foreign company;
• gift and inheritance rules;
• cross-border financing.

The absence of a general wealth tax in Andorra doesn’t remove obligations in the country of residence.

A selection method

1. Define the goal and time horizon.

2. Assess the liquidity needed.

3. Estimate the return after tax and costs.

4. Check foreign investment authorisation requirements.

5. Carry out due diligence on the asset or company.

6. Choose between personal or corporate ownership.

7. Document the origin of funds.

8. Prepare for taxation in the country of residence.

9. Plan ongoing monitoring and the exit.

Frequently asked questions

Do you need to be a resident to buy in Andorra? Not necessarily. Foreign investors still need to comply with applicable authorisations and taxes.

Does an investment automatically grant residency? No. The permit has its own conditions and quotas.

Is Andorran real estate always profitable? No. Returns depend on price, fees, charges, vacancy, and resale.

Can you invest through a company? Yes, but the structure needs to be compared with personal ownership and comply with foreign investment rules.

To go further: Passive residency, Asset-holding company, Holding company, Company formation, Taxation.