Definitive global law guides offering comparative analysis from top-ranked lawyers
CHAMBERS GLOBAL PRACTICE GUIDES
Real Estate 2026 Definitive global law guides offering comparative analysis from top-ranked lawyers
Contributing Editor John Sullivan DLA Piper LLP
Global Practice Guides
Real Estate Contributing Editor John Sullivan DLA Piper LLP
2026
Chambers Global Practice Guides For more than 20 years, Chambers Global Guides have ranked lawyers and law firms across the world. Chambers now offer clients a new series of Global Practice Guides, which contain practical guidance on doing legal business in key jurisdictions. We use our knowledge of the world’s best lawyers to select leading law firms in each jurisdiction to write the ‘Law & Practice’ sections. In addition, the ‘Trends & Developments’ sections analyse trends and developments in local legal markets. Disclaimer: The information in this guide is provided for general reference only, not as specific legal advice. Views expressed by the authors are not necessarily the views of the law firms in which they practise. For specific legal advice, a lawyer should be consulted. Content Management Director Claire Oxborrow Content Manager Jonathan Mendelowitz Senior Content Reviewers Sally McGonigal, Ethne Withers, Deborah Sinclair, Stephen Dinkeldein, Vivienne Button and Sean Marshall Content Reviewers Lawrence Garrett, Marianne Page, Heather Palomino, Alison Moore, Adrian Ciechacki and Michael Irvine Content Coordination Manager Nancy Tsang Senior Content Coordinators Carla Cagnina and Delicia Tasinda Content Coordinator Joanna Chivers Head of Production Jasper John Production Coordinator Genevieve Sibayan
Published by Chambers and Partners 165 Fleet Street London EC4A 2AE Tel +44 20 7606 8844 Fax +44 20 7831 5662 Web www.chambers.com
Copyright © 2026 Chambers and Partners
Contents
INTRODUCTION Contributed by John Sullivan and Michael Haworth, DLA Piper LLP p.6
DOMINICAN REPUBLIC Law and Practice p.205 Contributed by Guzmán Ariza Trends and Developments p.222 Contributed by Seibel Henríquez ECUADOR Law and Practice p.230 Contributed by VIVANCO & VIVANCO
ANDORRA Law and Practice p.11 Contributed by Cases Lacambra
BAHAMAS Law and Practice p.31
Contributed by Graham Thompson Trends and Developments p.51 Contributed by Lennox Paton BERMUDA Law and Practice p.56 Contributed by Wakefield Quin Limited CANADA Law and Practice p.76 Contributed by Stikeman Elliott LLP CANADA – QUÉBEC Law and Practice p.96 Contributed by BCF Business Law LLP Trends and Developments p.112 Contributed by BCF Business Law LLP
GERMANY Law and Practice p.249 Contributed by Linklaters
Trends and Developments p.267 Contributed by Latham & Watkins LLP
GREECE Law and Practice p.272
Contributed by Machas & Partners Trends and Developments p.292 Contributed by Sardelas Petsa Law Firm HUNGARY Law and Practice p.297 Contributed by Lakatos, Köves & Partners
INDIA Law and Practice p.316 Contributed by JSA Trends and Developments p.335 Contributed by JSA ITALY Law and Practice p.340 Contributed by SI – Studio Inzaghi
CAYMAN ISLANDS Law and Practice p.119 Contributed by Appleby
CHINA Law and Practice p.137 Contributed by JunHe LLP Trends and Developments p.156 Contributed by Merits & Tree Law Offices
JAPAN Law and Practice p.360 Contributed by Mori Hamada Trends and Developments p.378 Contributed by Nishimura & Asahi (Gaikokuho Kyodo Jigyo) KENYA Law and Practice p.384 Contributed by DLA Piper Africa, Kenya (IKM Advocates) Trends and Developments p.407 Contributed by Garane & Somane Advocates
CROATIA Law and Practice p.162 Contributed by Buterin & Partneri
CZECH REPUBLIC Law and Practice p.182 Contributed by Tenacta, advokátní kancelář, s.r.o. Trends and Developments p.200 Contributed by Tenacta, advokátní kancelář, s.r.o.
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LATVIA Law and Practice p.415 Contributed by BERG
THAILAND Law and Practice p.614
Contributed by Duensing Kippen, Ltd. Trends and Developments p.634 Contributed by Nagashima Ohno & Tsunematsu
MEXICO Law and Practice p.433 Contributed by Cannizzo Trends and Developments p.453 Contributed by Ritch Mueller MONTENEGRO Law and Practice p.460 Contributed by Keker, Bujkovic & Pejovic POLAND Trends and Developments p.480 Contributed by Greenberg Traurig, LLP
TÜRKIYE Law and Practice p.641 Contributed by Hergüner Bilgen Üçer Attorney Partnership Trends and Developments p.659 Contributed by Özay Law Firm
TURKS & CAICOS Law and Practice p.663 Contributed by Dentons Turks and Caicos Trends and Developments p.676 Contributed by Dentons Turks and Caicos
PORTUGAL Law and Practice p.488 Contributed by CS’Associados
UAE Law and Practice p.681 Contributed by DLA Piper LLP
PUERTO RICO Law and Practice p.507 Contributed by Pietrantoni Mendez & Alvarez LLC
USA Law and Practice p.701 Contributed by Rosen Karol Salis PLLC USA – ALABAMA Law and Practice p.725 Contributed by Dentons Trends and Developments p.744 Contributed by Dentons
SEYCHELLES Law and Practice p.522 Contributed by Christen Chambers
SINGAPORE Law and Practice p.533
Contributed by Rajah & Tann Asia Trends and Developments p.552 Contributed by Rajah & Tann Asia
USA – FLORIDA Law and Practice p.750 Contributed by Weiss Serota Helfman Cole + Bierman, P.L Trends and Developments p.768 Contributed by Bercow Radell Fernandez Larkin & Tapanes USA – HAWAII Law and Practice p.774 Contributed by Case Lombardi, A Law Corporation Trends and Developments p.792 Contributed by Case Lombardi, A Law Corporation
SLOVENIA Trends and Developments p.560 Contributed by Šelih & partnerji, o.p., d.o.o.
SOUTH KOREA Law and Practice p.566 Contributed by Lee & Ko Trends and Developments p.582 Contributed by Lee & Ko
USA – IOWA Law and Practice p.798 Contributed by Dentons Davis Brown PC Trends and Developments p.818 Contributed by Dentons Davis Brown PC
SWITZERLAND Law and Practice p.589
Contributed by Walder Wyss Ltd Trends and Developments p.605 Contributed by Niederer Kraft Frey
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Contents
USA – LOUISIANA Law and Practice p.825 Contributed by Jones Walker LLP USA – NEW JERSEY Law and Practice p.846 Contributed by Greenberg Traurig LLP USA – NEW YORK Law and Practice p.866 Contributed by Phillips Lytle LLP
USA – NORTH CAROLINA Law and Practice p.885 Contributed by Kilpatrick Townsend & Stockton LLP
USA – SOUTH CAROLINA Law and Practice p.902 Contributed by K&L Gates USA – TEXAS Law and Practice p.921 Contributed by Cokinos | Young VIETNAM Law and Practice p.940 Contributed by LNT & Partners
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INTRODUCTION Contributed by: John Sullivan and Michael Haworth, DLA Piper LLP
DLA Piper LLP has more than 995 lawyers in the real estate sector, operating in more than 40 countries, including strongly established teams in the Americas, Europe, the Middle East, Africa and Asia Pacific. The firm is widely recognised as a market leader in the commercial real estate sector. It represents many of the world’s leading investors, owners, develop - ers, lenders, asset managers, fund sponsors and in - vestment advisers, and offers the full range of real
estate services, including single asset and portfolio acquisitions and dispositions, single asset and multi- property/programmatic joint ventures, fund forma - tion, operating company investments, cross-border investments, REITs, financing, construction and de - sign, leasing, zoning/land use, public-private part - nerships, environmental law, real estate litigation and tax.
Contributing Editor
Co-Author
John Sullivan is senior counsel at DLA Piper, the former chair of its US real estate practice, and the former
Michael Haworth is a partner in DLA Piper’s US real estate practice. His practice focuses on commercial real estate transactions, often involving cross-border investments between the US, Asia or other jurisdictions. He
co-chair of its global real estate sector. He has a broad-ranging practice that encompasses all aspects of commercial real estate, with a particular emphasis on representing public and private pension plans, opportunity funds, investment advisers and non-US investors in equity, debt, hybrid and joint venture transactions throughout North America. John is a member of the Pension Real Estate Association and the American College of Real Estate Lawyers. He is a guest lecturer on real estate joint ventures at the MIT Real Estate Center and Columbia Business School, and has served as an expert witness in real estate joint venture disputes.
advises a range of real estate investors, lenders and other market participants on real estate investment matters globally, including acquisitions, dispositions, joint ventures and financings, both as borrower and as lender. Drawing upon over ten years’ experience as a lawyer in Tokyo and Hong Kong, Michael has experience in helping first-time investors navigate cultural, legal and market differences in cross-border commercial real estate transactions.
DLA Piper LLP 1251 Avenue of the Americas New York, NY 10020-1104 USA
Tel: +1 212 335 4670 Fax: +1 212 884 8670 Email: michael.haworth@us.dlapiper.com Web: www.dlapiper.com
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INTRODUCTION Contributed by: John Sullivan and Michael Haworth, DLA Piper LLP
In our Introduction to last year’s Global Guide, we noted that the commercial real estate (CRE) markets appeared to be turning a corner, after a period of uncertainty caused by inflation, interest rate increases and value impairment across many asset classes, only to have that nascent sense of optimism dampened at the start of 2025 by concerns that newly announced tariffs could result in trade wars, increased inflation and slower economic growth. Indeed, the global economy faced many challenges in 2025, including the highest tariffs seen in the last century, increased labour shortages caused, in part, by more restric - tive immigration policies, and geopolitical tensions in many parts of the world. But despite these challenges, the CRE market showed remarkable resilience. Last year, global direct CRE investment activity increased by 19% over 2024. In the US, commercial real estate investment volume increased 29% year- over-year in Q4 to USD171.6 billion, pushing full year 2025 volume to USD499.1 billion – 22% above 2024 levels. Fourth quarter CRE investment volume in EMEA rose by 16% over 2024, led by the UK and Germany. Asia Pacific saw 15% year-over-year CRE investment growth in Q4 of 2025. Cross-border investment con - tinued to recover in spite of geopolitical pressures, finishing 2025 with 25% year-over-year growth. Debt markets improved in 2025, with the US CBRE Lending Momentum Index (which tracks the pace of CBRE-originated commercial loan closings in the US) increasing 67% year-over-year. In most major mar - kets, the overall cost of debt decreased significantly from recent peaks. Overview Whether it was the Danish theoretical physicist Niels Bohr or the American baseball player Yogi Berra who said it first, “prediction is difficult, especially about the future”. That said, despite continuing tariff/trade uncertainty and ongoing geopolitical conflicts, at the start of 2026 there was a general sense of optimism for the CRE market, albeit with the acknowledgment that much of the data supporting such optimism was gathered before the conflict with Iran began. According to Knight Frank’s Active Capital survey, which measures the views and investment sentiments
of 119 of the world’s largest CRE investors represent - ing more than USD1.4 trillion of assets under man - agement (AUM), global institutions are set to invest USD144 billion in CRE this year, with approximately 87% of investors (by AUM) reporting that they intend to increase their direct investments in CRE in 2026. In Deloitte’s 2026 Commercial Real Estate Outlook, top markets for CRE investment (excluding each respond - ent’s home market) include the United States, India and Germany, and 75% of European and Asia-Pacific respondents reported that they expect to increase their CRE investment over the next 18 months, especially into India (86%), Canada (80%) and France (78%). In its 2026 Global Investment Outlook, Hines states that “we believe that 2025 may prove to be the year that real estate quietly bottomed – and 2026 could be the year that capital wakes up to it”, and they forecast opportunities concentrated in living, industrial, retail and certain alternative asset classes, particularly data centres. JLL sounded a similarly optimistic sentiment at the end of last year, stating that the “outlook for 2026 is positive with most major markets expected to see steady growth, supported by low or falling policy inter - est rates, low and contained inflation, and increas - ing fiscal spending”. In the 2026 edition of ULI/PwC’s Emerging Trends in Real Estate (United States and Canada), the 2026 “buy rating” of 3.74 is the highest it has been in the last 20 years. The 2026 edition of Emerging Trends for Europe expresses a more cau - tionary tone, stating that the “overriding sentiment for European real estate in 2026 is shifting from last year’s cautious optimism to something more pragmat - ic, with the likelihood of renewed investment activity once again tempered by geopolitical and economic uncertainty”. The 2026 Emerging Trends Report for Asia Pacific suggests that there is a mood of “cautious optimism” amongst Asia Pacific real estate leaders about the prospects for 2026. However, this optimism is fragile and subject to concerns about geopolitics and cost inflation. Furthermore, sentiment varies widely across the region: positive in Japan and Singapore, but less so in China and Hong Kong. Finally, CBRE predicts that the Asia Pacific CRE market is poised for growth in both investment and leasing activity in 2026.
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INTRODUCTION Contributed by: John Sullivan and Michael Haworth, DLA Piper LLP
Sectors Office
ing that while there is significant tenant demand for newly constructed Class A, amenity-rich office build - ings, office buildings that are older or of lesser quality continue to struggle. Living Apollo believes that housing is one of the most power - ful, long-term investment themes in global real estate. Consistent with this sentiment, global transaction vol - ume for the living sector in 2025 was USD240 billion – a 24% increase over the prior year. The US continues to be the dominant market in this sector, accounting for two-thirds of this investment, with 31% in EMEA and the remaining approximately 3% in Asia Pacific. Further growth is expected this year on the back of improving debt availability in major markets, including the US and UK. Fundraising activity targeting living growth markets in Europe and Asia Pacific has also been robust, leading to a rising tide of capital targeting the sector glob - ally. Research by Hines shows that, particularly in developed economies, 80% of households showed momentum for renting rather than buying, evidencing a potential long-term tailwind with respect to for-rent housing. Retail Retail fundamentals continue to be resilient across regions. In the US, absorption rose again in the fourth quarter of last year, signalling an ongoing recovery as store opening announcements outpaced closures. Of the four major property sectors, retail was the top performer in the NCREIF index from Q3 2023 through Q3 2025. In Europe and higher-growth or tourism- oriented economies in Asia Pacific, retailer demand continues to be healthy for premium central space, and 50% of high street retail and shopping centres have recorded positive year-over-year rent growth as of Q3 of last year. Logistics/industrial Logistics and industrial markets that are closely tied to global trade are being heavily influenced by mac - roeconomic conditions and trade policies. Unpredict - able tariff rates have made it difficult for many tenants to make long-term leasing decisions. That said, in a survey by Deloitte of more than 850 CRE executives
Global office leasing activity rose in the fourth quarter of 2025 on an annual basis for the ninth consecutive quarter, with volumes over the full year increasing to their highest levels since the pandemic. Gateway mar - kets and larger deals drove leasing in North America, and leasing activity also rose in Asia Pacific, whereas longer deal timelines in Europe contributed to a mar - ginal slowing. The global vacancy rate continued to decline after peaking in mid-2025. Asia continues to lead the recovery in the office sec - tor, with 2025 seeing a 25% year-over-year demand increase. There are, however, significant regional dis - parities in this recovery. For example, in Japan, New Zealand, Singapore and South Korea, office vacancy was a low 4%, whereas the office vacancy rate in Aus - tralia was more than 15%. In Europe, regulatory constraints, combined with a limited amount of available land, result in a significant supply constraint on the development of new office buildings in many city centres. New office construc - tion starts in Europe have fallen more than 80% from their cyclical peak, and are at the lowest level in over a decade. The impact of working from home in Europe has been less significant than in the US; as in the US, tenants prefer newly constructed Class A, amenity- rich office buildings. CBRE’s prime office rent index for Europe increased by 7% year-over-year, reflect - ing continued demand for the limited availability of prime office space. Prime office rents grew quarter- over-quarter in 13 of the 32 major European markets tracked by CBRE, with 25 of them recording year- over-year rent growth. In the Americas, 12 of the 17 major office markets tracked by CBRE had year-over-year increases in prime office asking rents in Q4. However, this recov - ery is, in many ways, a tale of two markets. Prime office buildings in the US have reported 69 million sq ft of positive net absorption since the first quarter of 2020, compared with negative 155 million sq ft in non-prime US office buildings. The 14% prime office vacancy rate is 6 percentage points below the non- prime average, which is the largest spread between prime and non-prime vacancy rates on record, show -
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INTRODUCTION Contributed by: John Sullivan and Michael Haworth, DLA Piper LLP
in North America, Europe and Asia Pacific, respond - ents identified logistics and warehousing second, and industrial and manufacturing third, in response to a question regarding which asset classes will present the greatest investment opportunity over the next 12 to 18 months. In the US, leasing activity in most markets was below pre-pandemic averages as of the end of last year. However, new construction has been limited relative to recent years, with 2025 construction starts down by about 25% from the 2017–2019 average. In addi - tion, because only 15% of US logistics demand is tied directly to global trade, much of the US logistics mar - ket is not overly exposed to trade-related disruptions. In Europe, many countries are committing larger amounts to their industrial sectors to boost their capacity for self defence, which could provide a boost for manufacturing and industrial assets. Industrial construction starts are down 68% from recent peaks, suggesting supply constraints over the next few years that could support rental growth. In Asia, there has been stabilising industrial tenant demand and a rapid decline in new supply. In much of Asia, vacancy rates peaked in the second quarter of last year and are expected to decline. Data centres Although the debut of DeepSeek at the start of 2025 raised concerns about the possibility of reduced data centre demand, a massive, AI-driven leasing and capex spending spree by major tech companies pushed those concerns aside. As the year went on, the demand for data centres reached record levels, driven by the hyperscalers and neocloud providers. The aggregate capital expenditures of the world’s four largest data centre tenants in 2026 are projected to be around USD650 billion – an approximately 60% increase over last year. To put the increasing need for data centres in perspective, Nadeem Meghi, Global Head of Real Estate at Blackstone, notes that more data has been created in the last three years than in all of history combined. JLL predicts that the data centre sector will double in size (GW capacity) over the next five years, and believes that we could see up to
USD3 trillion in combined real estate and tenant capex spending by 2030. The Americas is the largest data centre region, repre - senting about 50% of global capacity. The Americas also has the fastest growth rate of the three global regions, with a projected 17% supply CAGR through to 2030. The US drives most of the activity in the region, accounting for about 90% of capacity in the Americas. JLL projects that APAC data centre capacity will expand from 32 GW to 57 GW by 2030, achieving a 12% CAGR. JLL also forecasts that colocation will lead growth at 19%, while on-premises capacity will decline by 6% as enterprises continue cloud migra - tion. JLL’s projected CAGR for EMEA’s data centre market is 10%, fuelled by government support for AI infra - structure and strong demand for sovereign AI clouds to meet data privacy regulations. JLL forecasts that the region will add 13 GW of new supply, with growth concentrated in established European hubs and emerging Middle Eastern markets pursuing digital transformation strategies. Drilling down further, Green Street believes that Columbus, Dallas, Milan and Paris will experience the largest growth in data centre supply over the next five years. Power availability and energy regulation pose chal - lenges to the robust growth of data centres. Nuclear energy is expected to gain increasing acceptance as a clean power source, presenting operators with new opportunities to balance stable power access and sustainability requirements. Regulatory require - ments in many jurisdictions are expanding beyond infrastructure efficiency to address the entire data centre ecosystem, and new policies are targeting the full resource life cycle, from mandating renewable energy to introducing regulations on water usage. For instance, Germany has a mandatory clean energy mix and Ireland is requiring operators to bring their own power. Certain US states, including New York and Vir - ginia, are also considering legislation that would limit permits for new data centre construction or eliminate
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INTRODUCTION Contributed by: John Sullivan and Michael Haworth, DLA Piper LLP
tax exemptions historically enjoyed by data centre operators. Power is an area where China may have an advantage: according to the Wall Street Journal, China has the largest power grid in the world and some Chinese data centres pay less than half of what owners of data centres in the US pay for electricity. Just as the general sense of optimism that prevailed in most commercial real estate markets at the end of 2024 was tempered by the tariff and trade uncer - tainty that developed in the early part of 2025, as we enter 2026, geopolitical tensions – especially regard - ing the conflict in the Middle East – have injected new uncertainties into the markets. In February, the World Uncertainty Index (WUI) recorded its highest reading in its three-decade history, well above previous crisis peaks recorded during the September 11 attacks in 2001, the Iraq War in 2003, the 2008 global financial crisis and the COVID-19 pandemic in 2020.
A prolonged conflict with Iran could cause increases in the cost of fuel, transportation and petrochemical- based materials and disruptions in aluminium supply (particularly in Europe and the US), adding additional pressure to projects already strained by tariffs and inflation. Europe and particularly Asia are both more dependent on energy imports from the Persian Gulf than the US: according to the New York Times, Japan imports 57% of its energy from the Gulf, with South Korea at 55%, Italy and France at 22% and 18% as compared to the US at 10%. As a result, countries other than the US may be more vulnerable to short- term supply shocks as well as longer-term increases in energy costs. Furthermore, rising energy prices could increase inflationary pressures, which in turn could cause the US Federal Reserve, the ECB and other central banks to keep interest rates higher for longer. On the other hand, there are a lot of factors that bode well for CRE this year, and if there is a relatively quick end to the Middle East conflict, the predictions that 2026 will be a strong year for CRE could come to pass.
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ANDORRA Law and Practice Contributed by: Albert Hinojosa and Marc Ambrós Cases Lacambra
France
Andorra
Andorra La Vella
Spain
Contents 1. General p.14 1.1 Main Sources of Law p.14 1.2 Main Market Trends and Deals p.14
1.3 Proposals for Reform p.15 2. Sale and Purchase p.15 2.1 Categories of Property Rights p.15 2.2 Laws Applicable to Transfer of Title p.15 2.3 Effecting Lawful and Proper Transfer of Title p.15 2.4 Real Estate Due Diligence p.15 2.5 Typical Representations and Warranties p.16 2.6 Important Areas of Law for Investors p.16 2.7 Soil Pollution or Environmental Contamination p.16
2.8 Permitted Uses of Real Estate Under Zoning or Planning Law p.16 2.9 Condemnation, Expropriation or Compulsory Purchase p.16 2.10 Taxes Applicable to a Transaction p.17 2.11 Legal Restrictions on Foreign Investors p.17 3. Real Estate Finance p.18 3.1 Financing Acquisitions of Commercial Real Estate p.18 3.2 Typical Security Created by Commercial Investors p.18 3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders p.19 3.4 Taxes or Fees Relating to the Granting and Enforcement of Security p.19 3.5 Legal Requirements Before an Entity Can Give Valid Security p.19 3.6 Formalities When a Borrower Is in Default p.19 3.7 Subordinating Existing Debt to Newly Created Debt p.19 3.8 Lenders’ Liability Under Environmental Laws p.19 3.9 Effects of a Borrower Becoming Insolvent p.20 3.10 Taxes on Loans p.20 4. Planning and Zoning p.20 4.1 Planning and Zoning Framework p.20 4.2 Development Process, Challenges and Enforcement p.21 5. Investment Vehicles p.21 5.1 Types of Entities Available to Investors to Hold Real Estate Assets p.21 5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity p.22 5.3 REITs p.22 5.4 Minimum Capital Requirement p.22 5.5 Applicable Governance Requirements p.22 5.6 Annual Entity Maintenance and Accounting Compliance p.23
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ANDORRA CONTENTS
6. Commercial Leases p.24 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time p.24 6.2 Types of Commercial Leases p.24 6.3 Regulation of Rents or Lease Terms p.24 6.4 Typical Terms of a Lease p.24 6.5 Rent Variation p.24 6.6 Determination of New Rent p.24 6.7 Payment of VAT p.25 6.8 Costs Payable by a Tenant at the Start of a Lease p.25 6.9 Payment of Maintenance and Repair p.25 6.10 Payment of Utilities and Telecommunications p.25 6.11 Payment of Property Taxes p.25 6.12 Insurance Issues p.25 6.13 Restrictions on the Use of Real Estate p.26 6.14 Tenant’s Ability to Alter and Improve Real Estate p.26 6.15 Specific Regulations p.26 6.16 Effect of the Tenant’s Insolvency p.26 6.17 Right to Occupy After Termination or Expiry of a Lease p.27 6.18 Right to Assign a Leasehold Interest p.27 6.19 Right to Terminate a Lease p.27 6.20 Registration Requirements p.27 6.21 Forced Eviction p.28 6.22 Termination by a Third Party p.28 6.23 Remedies/Damages for Breach p.28 7. Construction p.28 7.1 Common Structures Used to Price Construction Projects p.28 7.2 Assigning Responsibility for the Design and Construction of a Project p.28 7.3 Management of Construction Risk p.28 7.4 Management of Schedule-Related Risk p.28 7.5 Additional Forms of Security to Guarantee a Contractor’s Performance p.29 7.6 Liens or Encumbrances in the Event of Non-Payment p.29 7.7 Requirements Before Use or Inhabitation p.29 8. Tax p.29 8.1 VAT and Sales Tax p.29 8.2 Mitigation of Tax Liability p.29 8.3 Municipal Taxes p.29 8.4 Income Tax Withholding for Foreign Investors p.29 8.5 Tax Benefits p.30
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ANDORRA Law and Practice Contributed by: Albert Hinojosa and Marc Ambrós, Cases Lacambra
Cases Lacambra is a client-focused international law firm with a cornerstone financial services practice. With a presence in Europe and America, the firm has a tested track record in complex transactions involving the financial sector, special situations, financial mar - kets regulations, cross-border disputes and transac - tions with relevant tax aspects. Its financial services
group comprises three partners, two counsels, one senior associate and five associates, and most of the members of the team have extensive knowledge of banking and finance regulations and capital markets transactions. The firm’s practice extends to capital markets, derivatives and structured finance matters.
Authors
Albert Hinojosa is a partner at Cases Lacambra, where his practice is focused on public law and tax advice. Albert spent more than 20 years developing an extensive public sector career, which included time spent as
Marc Ambrós is the partner who leads the corporate and foreign investment practice of Cases Lacambra in the Principality of Andorra. He has a great deal of experience in corporate and
head of the Department of Customs’ legal service and as director of the Department of Economy within the Ministry of Economy and Industry. From 2013 to 2021 he was head of the Andorran government’s Department of Taxation and Borders, where he introduced the current direct and indirect tax system and promoted the international network of double taxation agreements. Prior to joining Cases Lacambra, he was President of the State Agency for the Resolution of Banking Institutions (AREB).
commercial matters. Marc has advised in mergers, acquisitions, joint ventures, private equity, corporate restructuring, and refinancing, representing both Andorran and foreign clients in international transactions with Andorran interests. He advises throughout the entire transaction process, from both buy-side and sell-side perspectives, using different legal structures. He also advises companies about project and corporate finance issues. Marc is the author of multiple articles in specialised publications about the legal environment in the Principality of Andorra.
Cases Lacambra Manuel Cerqueda i Escaler, 3-5 AD700 Escaldes-Engordany Andorra Tel: +376 728 001 Email: andorra@caseslacambra.com Web: www.caseslacambra.com
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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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ANDORRA Law and Practice Contributed by: Albert Hinojosa and Marc Ambrós, Cases Lacambra
2.2 Laws Applicable to Transfer of Title Titles are transmitted by the so-called theory of the “title and mode”. This theory is a system of transmis - sion of ownership that requires the conclusion of an agreement, the subsequent delivery of the real estate to be transmitted (similar to the US common law doc - trines of merger or acceptance of title upon deliver - ance), and proof before a public notary, without any aspect being enough separately. Depending on the activity to be carried out with the real estate, attention should be paid to administrative regulations. Based on the specific economic sector (residential, industrial, offices, retail and hotels), dif - ferent types of real estate would have specific regula - tions, but the theory of the title and mode would apply to any sector. 2.3 Effecting Lawful and Proper Transfer of Title The lawful and proper transfer of title to real estate occurs when the conclusion of an agreement and the subsequent delivery of the real estate has been made before a public notary. There is no land registry in Andorra, but each town hall has its own real estate registry for tax purposes. The transfer of title is record - ed in the Andorran chamber of notaries. The public notaries record all the public deeds granted in refer - ence to a real estate, including the encumbrances, modifications and other duly recorded vicissitudes of the real estate. Title insurance is not used in Andorra. 2.4 Real Estate Due Diligence Buyers usually carry out due diligence on a real estate property, undertaking an exhaustive investigation of the ownership and main characteristics of the real estate. The red flag aspects to analyse are the fol - lowing: • titles and encumbrances; • the rights of third parties over the real estate, eg, if there are lease rights, if they are subject to a specific licence, if the real estate is subject to any tax, or if there is some kind of foreclosure on the real estate; • whether there is any debt involved in the case of condominiums; and
nullity of both the investment and the entity through which it was conducted. 1.3 Proposals for Reform The Andorran government is working on a law propos - al to modify the current regulations regarding urban planning and development to substitute the current Act and adapt it to the actual circumstances of the country and the sector. The actual regulation is from the early 2000s. The right of property can be understood as a full right or a limited right. In Andorra, the right of property understood as a full right could be: • an absolute freehold, permanent and absolute ten - ure of land or property, with the freedom to dispose of it at will; • a co-ownership, which is the right owned by more than one person over real estate; or • in a condominium ( propietat horitzontal ), the ownership of common premises is shared by the plurality of owners of each unit that makes up the apartments. 2. Sale and Purchase 2.1 Categories of Property Rights On the other hand, the property right could be under - stood as a limited right. Therefore, in Andorran law, the following rights are recognised as limited property rights: • leasehold, which is the temporary right that includes the ability to build on the ground or in the subsoil, and the right to overhang, with the right to appropriate what has been built for a specific period; • beneficial interest, which is the right by which a person can use the property of another and enjoy its benefits, with the obligation to preserve and take care of it; and • emphyteutic lease, which is the right by which the useful domain of a real estate property is given for a period by the payment of an annual pension, whereby the assignment is made as recognition of the useful domain of the property.
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ANDORRA Law and Practice Contributed by: Albert Hinojosa and Marc Ambrós, Cases Lacambra
• whether there are any litigious procedures con - cerning the real estate. 2.5 Typical Representations and Warranties The parties negotiate the representation and warran - ties within a commercial real estate transaction. The typical representations and warranties in Andorra are as follows: • the buyer must always obtain authorisation for any foreign investment from the Andorran government before the completion of the transaction (which must be notified to the Foreign Investment Registry ( Registre d’Inversió Estrangera )); • at the time of granting the public deed of sale, the property must comply with the conditions for building on the land, being free of charges, encum - brances, tenants and occupants; • the property must be transmitted with all the rights, facilities, elements and equipment that are inherent and accessory to it; • the seller shall carry out all the necessary or agreed acts to avoid the occupation of the property by third parties so that it is free; and • although, from a legal standpoint, an environmental contingency certificate is not requested, it is highly recommended. The buyer’s remedies against the seller for misrepre - sentation include the resolution of the agreement, with the return of any reciprocal benefits, the compensa - tion of damages to the buyer, or the specific perfor - mance of the terms and conditions of the agreement. Depending on the relevance of the transaction, it is customary for the seller’s representations and war - ranties to expire after a certain amount of time. The typical range of that survival period is usually between two to four years. On the other hand, there is usually a cap on the seller’s liability for a breach of its representations and warran - ties, the typical range of that cap being from a limited percentage of the price to the full price. 2.6 Important Areas of Law for Investors The most important areas of law for an investor to consider when purchasing real estate could be:
• civil law, to have the base knowledge of property rights and the different charges and encumbrances that the real estate could have; • administrative law, in order to know the regulations pertaining to planning and zoning; and • tax law, to use the most beneficial tax structure to acquire the real estate. 2.7 Soil Pollution or Environmental Contamination In accordance with Andorran legislation regarding civil liability, the liability for others’ actions must be considered. In this sense, the buyer of the real estate shall be liable for any soil pollution or environmental contamination of real estate, even if it is not attribut - able to said buyer. The liability for others’ actions allows the buyer of the real estate to claim the necessary expenses to com - pensate for the damages against the seller since they had responded previously when it did not belong to them. 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law A buyer can ascertain the permitted uses of a parcel of real estate under the applicable zoning and plan - ning law by consulting the Andorran official gazette ( Butlletí Oficial del Principat d’Andorra – BOPA), where the permitted uses for a plot or zones are published. It is possible to enter into a specific development agreement with relevant public authorities to facilitate a project relating to, eg, the execution of a project of national interest or local sectorial plans, a project con - cerning the construction of roads and communica - tions infrastructure, or the execution of the hydraulic and energy policy. 2.9 Condemnation, Expropriation or Compulsory Purchase In Andorra, there is a law of compulsory expropria - tion. The procedure first requires the prior declaration of the public utility of the construction project and necessitates the occupation of the property or the acquisition of the affected economic rights. In order to carry out the expropriation, the expropriator must develop a file, which is public information and be
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ANDORRA Law and Practice Contributed by: Albert Hinojosa and Marc Ambrós, Cases Lacambra
published in the Andorran official gazette. Later, the government transmits the entire file to the Andorran Parliament ( Consell General ), with all the observations and objections received, attaching a report suggest - ing the approval or denial of the declaration of public utility and the necessity of occupation. The Andor - ran Parliament makes the final decision, which has to be published in the Andorran official gazette and is directly enforceable. In addition, Act 5/2025 has introduced a special regime for empty homes ( habitatges buits ). This Act provides for the compulsory transfer of the right to use empty homes to the Andorran government for a maxi - mum period of five years, which will incorporate them into the public housing stock for rental at affordable rates. The owner will receive financial compensation equivalent to an affordable rent amount. According to the Act, a dwelling is considered empty if (i) there is no electricity or water supply, or, despite having it, there is no energy or water consumption for the 18 months preceding the entry into force of Title IV; or (ii) it has been unoccupied for at least 18 months preceding the entry into force of Title IV and this unoccupancy is due to a cause attributable to the owner. 2.10 Taxes Applicable to a Transaction Taxation on the purchase of real estate depends on the envisaged purchase scheme (ie, asset deal or share deal) as well as the condition of the parties inter - vening in the transaction. Asset Deal The condition of the seller will determine whether an asset deal will be subject to General Indirect Tax ( Impost General Indirecte ), which is the Andorran VAT, or Transfer Tax ( Impost sobre transmissions patrimoni- als immobiliàries ). If the seller does not qualify as a business-person or professional for VAT purposes, the sale and purchase of real estate will be subject to Transfer Tax, which will be borne by the purchaser. The applicable Transfer Tax rate will be 4%. Should the seller qualify as a business-person or pro - fessional for VAT purposes, the sale and purchase of real estate will be subject to VAT, which will be charged
by the seller and borne by the purchaser. The appli - cable VAT rate will be 4.5%. If an asset is transferred as part of an independent economic unit for VAT pur - poses, such transfer will not be subject to VAT. Share Deal If the transfer of real estate is carried out through a share deal, the transaction would not be subject to VAT or Transfer Tax. However, the Transfer Tax Law sets out an anti-abuse rule to tax indirect transfers of real estate. This rule will apply if a company’s assets consist of at least 50% of real estate assets located in Andorra and are transferred and, by virtue of such transfer, the pur - chaser acquires more than 20% of the company’s shareholding. In both cases – Asset Deal or Share Deal – capital gains on the transfer of real estate would be subject to Corporate Income Tax ( Impost sobre societats ) if the seller is a company which is resident for tax pur - poses in Andorra, at a nominal rate of 10% to 20%, depending on how long the asset has been held by the seller. If the seller is an individual, Personal Income Tax ( Impost sobre la renda de les persones físiques ) or Non-Resident Income Tax ( Impost sobre la renda dels no-residents fiscals ) would apply. In this case the nom - inal rate would be between 0% and 25%, depending on both the residency in Andorra of the seller and the time elapsed since the date of acquisition. 2.11 Legal Restrictions on Foreign Investors A restriction on foreign investment in real estate estab - lishes that a foreign natural person must always obtain a prior foreign investment authorisation from the Andorran government to acquire real estate located in Andorra. Furthermore, foreign legal persons cannot directly acquire a property located in Andorra, so they must use an Andorran special purpose vehicle or SPV. The acquisition or constitution of the SPV is also sub - ject to obtaining the relevant prior foreign investment authorisation from the Andorran government if the for - eign entity owns more than 10% of the SPV’s share capital or controls more than 10% of its voting rights.
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ANDORRA Law and Practice Contributed by: Albert Hinojosa and Marc Ambrós, Cases Lacambra
Finally, the Andorran government has a veto right, which enables it to deny the authorisation of foreign investment when the investment may harm, even occasionally, the exercise of public power, sovereign - ty and national security, public and economic order, the environment, public health or the general interest of the Principality of Andorra and any direct foreign investment related to sensitive goods. Law 3/2024, published in the Andorran official state gazette on 28 February 2024, introduced the Foreign Investment in Real Estate Tax (FIT) in the Principality of Andorra. The FIT is levied on foreign investments in real estate in Andorra, as defined in the Foreign Invest - ment Law. This includes acquisitions of real estate or other rights in rem, concessions, participation in companies or other legal entities holding rights over such real estate, or for urban or real estate develop - ment purposes. The FIT is levied on both natural and legal persons. The tax base is calculated on the basis of the actual value of the realised foreign investment, upon which a progressive tax rate (6% for the first real estate unit and 10% for subsequent units). Furthermore, the FIT Law introduced a 90% rebate on the tax liability if the foreign investment is directed towards the acquisition or construction of real estate intended for the rental housing market, meant for habitual and permanent residence for a minimum period of ten years. It is also required for the rental price to be affordable. The settlement and payment system for the FIT entails an advance payment before the issuance of the favourable foreign investment resolution, in which the appropriate tax rate will be applied. Tax payment must be completed before the execution of the public deed for the foreign real estate investment and must be verified before the notary public attesting to such execution. In any case, the FIT Law delineates several exemp - tions, which include, among others, acquisitions mortis causa by natural or legal persons who are not resident for tax purposes in the Principality of Andorra and acquisitions intended for conducting business, professional, commercial, or industrial activities (pro - vided that specific conditions are met) if such acqui -
sitions are made by a non-resident or resident indi- viduals with less than three years of residence, or by non-resident legal entities. 3. Real Estate Finance 3.1 Financing Acquisitions of Commercial Real Estate Acquisitions of commercial real estate located within Andorra are generally financed with recourse to debt by means of one-off or revolving loans or credits granted by local banking entities. The financing structure and disposal conditions may vary widely, depending on the specific characteris - tics of the acquisition and the borrower. However, it is common for the guarantee scheme of such financing operations to encompass a mortgage granted over the real estate asset and one or several pledges grant - ed over any credit rights deriving from agreements entered into by the borrower (eg, insurance contracts) or other instruments (eg, borrower’s bank account(s)). There are no special financing options for acquisitions of large real estate portfolios. 3.2 Typical Security Created by Commercial Investors The standard security package for a commercial real estate transaction would normally encompass the fol - lowing. • A first-ranking mortgage over the target real estate asset. • A pledge over the shares of the company holding the target real estate asset (usually an SPV). • A pledge on the company’s bank accounts (over the bank account balance and the bank account itself), usually complemented by periodical cash- sweeps, limits for maximum-free disposal amounts or minimum-unavailable amounts and disposals subject to the consent of the financing entity. • A pledge granted over credit rights deriving from any income-producing agreement entered into by the borrower and related to the specific real estate asset. In a non-exhaustive manner, a pledge may be created over insurance policies, lease agree -
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