Law governing the digital economy, entrepreneurship and innovation


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On 1st December, the Andorran Parliament approved Law 42/2022 governing the Digital Economy, Entrepreneurship and Innovation. The aim of this law is to provide the means to develop and promote new business opportunities in the digital sector and that of the new technologies in Andorra. By creating a strong, secure and trustworthy legal framework it also aims to create favourable conditions in which local and foreign investors can promote their activities.


Table of contents:

  1. Regulation of areas and facilities
    Immigration modalities to support the digital economy
    The teleworking contract and digital disconnection
    Foreign investment in 2021
    A step forward for the digitisation of the country

Regulation of areas and facilities

The legal text regulates a series of facilities and areas for the development of new projects connected with the digital economy.
The ordinance covers matters such as the creation, on Andorran territory, of special economic areas in which companies will benefit from competitive advantages. It regulates the creation of controlled testing environments and sandboxes to facilitate the development of innovative products or services. It also includes Living Labs, which are open laboratories in which the participation of the public administration, private individuals or research centres will be encouraged to satisfy the identified needs of the population.
It establishes a legal regime governing shared spaces for working and living (‘co-working’ and ‘co-living’). It also regulates incubators, accelerators and clusters, which will facilitate improvement, development and investment through collaboration among different institutions and companies.


The law includes start-ups among the beneficiaries of the measures to promote financing and investment in digital entrepreneurship initiatives. It establishes a specific legal framework to promote their creation and to protect investors. It also provides for participatory financing and new forms of financing so that entrepreneurs can obtain capital for their projects.

Immigration modalities to support the digital economy

In order to adapt to delocalised forms of working and to promote the digital economy, innovation and entrepreneurship, new types of residence are being created. For this reason, it was necessary to amend Immigration Law 9/2012.

Digital nomads

This law institutes new forms of residence for people who do not need a specific geographical location to carry out their activities. These individuals, who are known as ‘digital nomads’, use technology, telecommunications and other tools to carry out their work. The law also institutes a residence permit for participants in the entrepreneurship programme administered by the Ministry of Economy. This permit is known as the “entrepreneur visa“.
In this way, the granting of an immigration permit for work without residence is made more flexible for foreign workers who work in a company established in Andorra. The entrepreneur visa does not require proof of a fixed salary of more than three times the minimum wage in force.

Foreign investors

In the case of the creation of a company that promotes the digital economy, innovation and entrepreneurship, the granting of residence and self-employment permits is also more flexible. Foreign investors are no longer required to deposit €50,000 with the AFA (Andorran Financial Authority) at the same time as they present their immigration permit.

The teleworking contract and digital disconnection

The law also regulates the teleworking contract. By amending Law 31/2018 on industrial relations, the terms and conditions operating between the company and the employee are specified.
The amendment also introduces the right to “digital disconnection” after working hours.

Foreign investment in 2021

The data show a change in the business models presented for the creation of foreign companies in Andorra. The type of investment that has grown the most is that related to services, particularly those related to digitisation and innovation.
This is good news for the country, which is positioning itself as an attractive location in which to perform digital economic activities. It is also in line with the country’s aim, in recent years, of finding new ways to diversify the economy.
Notably, the number of approved applications for foreign investment in 2021 was double that in the previous year (this increase included many of the applications that had been stalled in 2020 due to the pandemic).
All the data about foreign investment in 2021 may be found in our article:
Foreign investment grows for another year in Andorra

A step forward for the digitisation of the country

The Digital Economy Law, which will be approved at the end of 2022, is the culmination of a journey that began almost two years ago. It was created with the intention of adapting to the digital ecosystem that is increasingly present in the daily life of companies and entrepreneurs. This law establishes a regulatory framework for new forms of work and business initiatives, allowing local and foreign investors to benefit from innovation in Andorra.
In recent years, the Principality has been looking for new sectors through which to diversify its economy. In addition, the country has the Blockchain and Digital Assets Law and the E-Sports Law, which were passed in 2022 and 2021 respectively.
The country is making great strides in creating a favourable environment in which to promote digitisation and research. These legislative changes, together with the fiscal benefits which the country offers, and its good geographical location, are strong points for continuing to attract talent and foreign investors looking for a good return on their investments.

If you are interested in investing in Andorra, Advantia Assessors can advise you on immigration and residence procedures in Andorra, as well as on all the stages involved in setting up your business.
Please do not hesitate to contact us.