ANDORRA Law and Practice Contributed by: Elena Redondo, Albert Hinojosa and Marc Ambrós, Cases & Lacambra
1. General 1.1 Main Sources of Law
changes, real estate investments have been affected. In this respect, foreign investment authorisation was mandatory for foreign inves - tors to acquire ownership rights and other in rem rights in respect of real estate located in Andorra, subject to these limits: • two residential units, including apartments or studios, along with their annexes; • a single-family home or a plot of land for its construction; or • six parking slots. However, the Act introduces some exemptions to the application for prior administrative author - isation as follows: • if the acquisition is either due to death or due to the liquidation of the matrimonial economic regime; • for administrative concessions, the applicable regime is established in the corresponding terms and conditions; and • for acquisitions of real estate carried out by the entities operating in the Andorran finan - cial system or by legal persons of Andorran nationality with foreign participation in its capital or in its voting rights of more than 50%, and holders of security rights, under the conditions set forth in the Act. In any case, Andorran 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 conduct - ing their own business activity. In addition, the Act banned foreign investment aimed at urban or real estate development, except for real estate developments involving
As a preliminary consideration, Andorra has nei - ther a civil code nor any regulation based on civil law, to the extent that there was no codi - fication process as in other neighbouring civil law countries that are members 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 specific regulations governing land and urban planning ( Llei General d’Ordenació del Territori i Urbanisme ), real estate building, condominiums, urban leasing and emphyteutic census. Additionally, the following normative provisions are relevant in the housing sector: planning instruments, guidelines and specific regula - tions on urban planning and real estate build - ing, as well as projects of national interest and sectorial plans ( Projectes d’interès nacionals 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 respective town halls ( Comuns ). 1.2 Main Market Trends and Deals On 26 March 2025, the Act 5/2025 for sustain - able 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. The Act repealed the vast majority of the exist - ing Foreign Investment Act (Act 10/2012) and replaced it with a new set of provisions that introduces significant changes. Among these
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