Foreign investment grows for another year in Andorra


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The number of foreign investment applications in Andorra and the volume of initial investment declared grew substantially in 2021. Figures have improved compared to the pre-pandemic period, with results well above those of 2020.

These are the conclusions after analysing the figures that the Government’s statistics department has shown in its report. All the relevant data are summarised for you here.


Table of contents

  1. 1. Growth in the number of applications submitted
    2. Nearly 1,000 foreign investment requests were approved and formalised
    3. The reported total volume of initial investment also breaks records
    4. Sectors with the largest numbers of applications for foreign investment
    5. Spain and France: the countries that invest the most in Andorra
    6. Foreign investment in property
    7. Progression of foreign investment in Andorra
    8. Proposed new law governing foreign investment

1. Growth in the number of applications submitted

1,138 applications were registered, which was 69.6% more than in 2020 and, for the first time, more than 1,000 applications were submitted in a single year.

Of the 1,138 applications submitted, 1,094 were approved, 8 were rejected, 1 is still in progress and 35 have expired.

Decisions about applications:

  • Requests denied are those that either did not fulfil the criteria of the institutions in charge of the prevention of money laundering or were considered to be potentially detrimental to public and economic order.
  • Expired applications are those which did not submit the documentation required by the administration within the stipulated two months.

Although the number of direct foreign investment requests increased significantly, the numbers of both rejected and expired applications were similar to those of previous years.

2. Nearly 1,000 foreign investment requests were approved and formalised

Of the 1,094 applications approved, 916 have already been formalised, a figure that more than doubles last year’s 433. Previously, 2016 had been the year with the largest number of formalised applications, 632 in total, the year with the lowest number having been 2020.

Formalised applications for foreign investment are those on which the notary has begun to work following approval by the authorities. The date of formalisation of the application is not the same as the date of its approval. In fact, the statistics department stresses that there may be a gap of as much as nine months between the two steps.

3. The reported total volume of initial investment also breaks records

In 2021, a total of €823 million was declared, of which €775 million corresponded to approved requests and €539 million to approved and formalised applications. The latter represented an increase of 289% compared to the €138 million in 2020.

The amount declared is the amount quoted by the investor at the beginning of the business plan when submitting the request for foreign investment, both for setting up the activity and for beginning it.

4. Sectors with the largest numbers of applications for foreign investment

Service provision, property and marketing are the sectors that have attracted the largest numbers of requests for investment in Andorra. In this sense, there is no variation compared with previous years, when they were also the sectors that generated the most demand.

There have also been requests to invest in property development or construction, hospitality, design or research and manufacturing projects.

Of the 916 approved and formalised applications, 593 are in the service provision sector, 142 are for property projects and 132 are for marketing, retail or wholesale purposes. The property sector, which has declared a total value of 436 million euros, is the sector that has contributed the most in economic terms, although it is the second in terms of the number of applications. The provision of services contributed 42 million euros, and in third place in terms of investment was the projects, design and research sector, with 26 million euros.

5. Spain and France: the countries that invest the most in Andorra

Of the 916 applications formalised, almost half (438) are from Spain, followed by 230 from France. In third place, 47 applications come from Andorra. This is followed by countries such as Great Britain and Northern Ireland, with 31 approved and formalised applications, and Russia, with 27. The latter country had fallen to only two applications in 2020.

The applicants from Andorra are Andorran companies more than 50% of whose shares are held by non-resident partners making a new investment. The majority are Spanish residents (37), followed by French residents (5) and 5 more from other countries.

6. Foreign investment in property

In 2021, 501 requests were submitted. Although this was not the period with the largest number of requests of this kind, it was the best in terms of investment, with 176 million euros. It closed the year with growth of 77% compared to 2020, when investment was just under 100 million euros.

In terms of volume, these figures did not exceed those of 2017 (537 property investments), although investments did grow in terms of value (the 537 requests for property investments in 2017 represented only 96 million euros).

7. Progression of foreign investment in Andorra

Although there were more requests in 2020 than in 2019, fewer were formalised. Foreign investment requests grew between 2015 (which is the first year covered by the report) and 2017. In 2018 and 2019, fewer requests were recorded, resulting in fewer approvals and formalisations. However, it is worth noting that, from 2019 onwards, the total initial investment declared in euros, in all the requests, grew in comparison with previous years and reached 337 million euros. In 2018 it reached 179 million euros, while in 2015 it was just under 100 million euros.

8. Proposed new law governing foreign investment

The draft law to amend the 2012 foreign investment law is imminent. The legal changes are aimed at adapting to the new challenges and needs of the Andorran economy.

  • The new regulatory framework aims to release some investments to facilitate this process.
  • The new regulation will require a record to be filed once the investment has been made.
  • It provides for the establishment of control mechanisms by the administration and a system of penalties to prevent damage to health, safety or the environment.

Another goal is to modernise and streamline processes so that companies can set themselves up more quickly. In this regard, the aim is to allow investments from countries with a double taxation agreement in force to skip the step of submitting the application. This could save up to a month of paperwork. It should be remembered that most of the projects come from Spain and France, two of the countries that have this type of agreement with the Principality. Although they do not have to submit the initial application, they will still have to register in the registry to keep an official control and ensure that the investments comply with the requirements of the law.

Overall, 2021 was the best year for foreign investment so far. The figures obtained, which far exceed those of the pre-pandemic years, consolidate the economic openness of Andorra, which is positioning itself as a country where investors want to come to live and set up businesses.

Source: Data from the Department of Statistics for press release ref. NP-A140_20220519.