ANDORRA Law and Practice Contributed by: Albert Hinojosa and Marc Ambrós, Cases Lacambra
1. General 1.1 Main Sources of Law
• two residential units, including apartments or stu - dios, along with their annexes; • a single-family home or a plot of land for its con - struction; or • six parking slots. However, the Act introduced some exemptions to the application for prior administrative authorisation as follows: • if the acquisition is either due to death or due to the liquidation of the matrimonial economic regime; and • for administrative concessions, the applicable regime is established in the corresponding terms and conditions. Further to the general restrictions on quantity, Andor - ran companies with direct or indirect foreign equity participation equal to or greater than 50% in its share capital or its voting rights and natural persons with less than three years of uninterrupted residence in Andorra may purchase real estate for the purpose of conducting their own business activity. In addition, the Act banned foreign investment aimed at urban or real estate development, except for real estate developments involving residential rental prop - erties intended for habitual and permanent residence, provided that the ownership was maintained for a min - imum of ten years. The Act introduces two exceptions: • real estate developments that are entirely intended for rental housing for habitual and permanent residence (including common areas, car parks and storage rooms assigned to the rent), provided that at least 50% is at an affordable price, and that the ownership of the lease is maintained for a minimum of ten years; and • real estate developments that are required to be adapted to the conclusions of the study of maxi - mum parish load capacity. Finally, concerning the penalty regime established by the Act for non-compliance with its provisions, among the penalties provided for in the Act, unauthorised foreign investments may incur fines ranging from EUR10,000 to EUR20,000 and may also result in the
As a preliminary consideration, Andorra has neither a civil code nor any regulation based on civil law, to the extent that there was no codification process as in other neighbouring civil law countries that are mem - bers of the European Union. Consequently, generic provisions in real estate are based on the applicable Roman Law or Digest, as are guarantee rights. Notwithstanding this, the pace of change in the Andorran society has led to the need to develop spe - cific regulations governing land and urban planning, real estate building, condominiums, urban leasing and emphyteutic census, namely through the Land and Urban Planning Act ( Llei General d’Ordenació del Ter- ritori i Urbanisme ) of 29 December 2000, as amended on 11 December 2025. Additionally, the following normative provisions are relevant in the housing sector: planning instruments, guidelines and specific regulations on urban planning and real estate building, as well as projects of national interest and sectorial plans ( Projectes d’interès nacion- als i plans sectorials ) and the Plan and the Master Plan of Urban Planning and Development ( Pla d’Ordenació i Urbanisme Parroquial – POUP) issued by the respec - tive town halls ( Comuns ). 1.2 Main Market Trends and Deals On 26 March 2025, the Act 5/2025 for sustainable growth and the right to housing ( Llei 5/2025, del 6 de març, per al creixement sostenible i el dret a l’habitatge ) was published in the official gazette of the Principality of Andorra. The Act entered into force 15 days after its publication and was last amended on 13 February 2026. The Act repealed the vast majority of the existing Foreign Investment Act (Act 10/2012) and replaced it with a new set of provisions that introduces sig - nificant changes. Among these changes, real estate investments have been affected. In this respect, for - eign investment authorisation is now mandatory for all foreign investors wishing to acquire ownership rights and other in rem rights in respect of real estate located in Andorra, subject to these limits:
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