ANDORRA Law and Practice Contributed by: Marc Ambrós and David Cuesta, Cases & Lacambra
• the acquisition of any other rights that entitle the foreign company or natural person to participate in the share capital of the Andorran company or to acquire voting rights. If as a result of the acquisition, the acquirer holds, directly or indirectly, a stake in the Andorran company higher than 10% of its share capital or voting rights, the foreign investment regime requires the acquirer to obtain prior authorisation from the government of Andorra issued through the relevant ministry. Otherwise, where the stake in the Andorran company held by the foreign company or natural person is equal to or less than 10%, it is sufficient merely to notify the Foreign Investment Register after the transaction. 2.4 Antitrust Regulations There are no antitrust regulations applicable to busi - ness combinations in Andorra. Nevertheless, Andorran regulations do foresee the control of economic concentrations. Economic con - centrations are deemed to arise where there is stable change of control of the whole or part of one or more companies due to: • the merger of two or more previously independent companies; • the acquisition by a company of control of all or part of one or more companies; or • the creation of a joint venture and, in general, the acquisition of joint control over one or more companies, where these undertakings perform on a lasting basis the functions of an autonomous economic entity. Andorran regulations also foresee that certain eco - nomic concentrations are subject to notification to the Andorran government. Such economic concen - trations are those where: • all the companies involved in the concentration achieve, according to publicly available informa - tion, a share equal to or greater than 50% in any relevant market in Andorra; and
• at least two of the participating companies individ - ually achieve an annual turnover in Andorra of more than EUR2.5 million. 2.5 Labour Law Regulations If a bidder acquires a target company in Andorra with employees, to the extent that as a result of the takeo - ver there is no change in the conditions of the work - ers as their employer has not changed, the acquirers should not be concerned about any specific labour law regulations. Notwithstanding the above, if, following the acqui - sition, the acquirer wishes to implement restructur - ing measures that include the dismissal of a certain number of employees, and if such dismissals exceed certain thresholds in a certain period of time, this is considered a collective dismissal and a specific pro - cedure has to be followed. 2.6 National Security Review The ministry competent in matters related to foreign investment can deny authorisation for foreign invest - ments if it considers that such investment could hin - der, even occasionally: • the exercise of public authority, sovereignty and national security; • public order and economic order; 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments There have been no significant court decisions or legal developments in Andorra related to M&A prop - erly. However, there have been recent, important legal developments in respect of incorporation require - ments and financing benefits applicable to start-up companies to attract the creation, development and establishment of technological companies in Andorra. In parallel, the Andorran government has also devel - oped a legal framework to create companies with the • the environment; • public health; or • the general interests of Andorra.
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