ANDORRA Law and Practice Contributed by: Albert Hinojosa and Marc Ambrós, Cases Lacambra
as the advisory and executive body responsible for regulating development and designated land use, as well as determining the applicable legislation. Its func - tions include: • deciding appeals against resolutions issued by town halls in relation to urban development; • reviewing and reporting on draft special plans or partial town plans; and • ordering the suspension of building licences ( llicèn- cies d’obra ). Building licences ( llicències d’obra ) and approval of construction projects ( projectes d’edificació ) must be obtained from the town halls in order to carry out a new development or a major refurbishment. In general terms, the procedure for obtaining a building licence from a town hall involves the following steps. First, the applicant submits an application including personal details, information relating to the plot of land or building, the type of urban licence requested, and the place and date of application, together with the applicant’s signature and the required project docu - mentation. Once the legally required documentation and licence application have been received, the town hall obtains the internal and external legal, technical and optional reports required under its procedures. A decision must be issued within two months from submission of the application. Third parties do not have the right to participate in or object to the proce - dure before a decision has been issued. Applicants may appeal decisions through administrative channels and, subsequently, by bringing contentious adminis - trative proceedings. Agreements with local or governmental authorities, public bodies, or utility providers to facilitate a devel - opment project are governed by urban planning and construction legislation and may vary on a case-by- case basis depending on the relevant town hall. 4.2 Development Process, Challenges and Enforcement In summary, restrictions on development operate on either an ex ante or an ex post basis. Ex ante mechanisms are implemented through the granting
of licences under a regulated procedure and through the exercise of urban supervisory powers. Ex post mechanisms consist of the administration’s sanction - ing powers and the imposition of additional measures intended to halt the administrative offence, including the cessation of building works ( cessació de l’obra ), the demolition of construction works ( demolició ), or the suspension of works ( aturada ). 5. Investment Vehicles 5.1 Types of Entities Available to Investors to Hold Real Estate Assets Entities available to investors are: • corporate vehicles, which may take the form of a limited liability company ( societat limitada ) or a public limited company ( societat anònima ); or • regulated investment vehicles, which may take the form of an open-ended collective investment scheme ( Societat d’Inversió de Capital Variable – SICAV) or a real estate fund. In respect of corporate vehicles, the incorporation of an SPV is a common instrument for investing in real estate assets. It should, however, be noted that under the current foreign investment framework, an SPV is subject to the same acquisition limits as a natural person. By way of example, where a natural person is restricted to the acquisition of two apartments, an SPV is likewise limited to acquiring two apart - ments, irrespective of the number of its members or shareholders. Accordingly, an SPV cannot aggregate or pool the individual investment entitlements of its members in order to expand its acquisition capacity; on the contrary, it is treated as a single investor for these purposes. Moreover, such SPV can only operate if wholly owned by a single physical person (or by fam - ily members up to the second degree of relatedness between said members). The use of regulated collective investment vehicles is more restricted due to the costs associated with their incorporation and prior registration requirements required before the AFA. However, the tax treatment of collective investment schemes is highly efficient.
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