ANDORRA Law and Practice Contributed by: Elena Redondo, Albert Hinojosa and Marc Ambrós, Cases & Lacambra
5.3 REITs See 5.1 Types of Entities Available to Investors to Hold Real Estate Asset . 5.4 Minimum Capital Requirement The minimum capital required to set up each type of entity used to invest in real estate in Andorra is as follows: • Andorran limited liability company ( societat limitada ) – EUR3,000 fully paid upon incorpo - ration; • Andorran public limited company ( societat anònima ) – EUR60,000 fully paid upon incor - poration; • Andorran self-managed SICAV – EUR300,000, with a minimum of 10% of such estate disbursed upon incorporation; • Andorran SICAV managed by an Andorran management company – EUR1.25 million with a minimum of 10% of such estate disbursed upon incorporation; and • Andorran real estate fund – EUR6 million, and a minimum of 10% of such estate must be disbursed on the date of incorporation. 5.5 Applicable Governance Requirements Governance requirements for a limited liability company ( societat limitada ) and a public limited company ( societat anònima ) are quite flexible and allow their setting up and organisation main - ly on a shareholder’s consensus basis (through the articles of association) and, residually, on an imperative basis determined by provisions of Act 20/2007 on limited liability companies and pub - lic limited companies. Shareholders must deter - mine the structure and the scope of the board of directors’ representation powers in the articles of association prior to the incorporation by means of granting a public deed before a notary public.
In synthesis, the governing body may take the form of: • a sole director; • two or more directors acting jointly; • two or more directors acting jointly and sever - ally; or • a board of directors. Governance requirements for SICAVs and real estate funds differ from mercantile companies due to their condition as regulated entities. Gov - ernance requirements applicable to collective investment schemes are provided for in: • Act 7/2013, 9 May, on the regime for operat - ing entities in the Andorran financial system and other provisions that govern the financial activities in the Principality of Andorra; • Act 8/2013, 9 May, which covers the organi - sational requirements and operating condi - tions of the operating entities in the Andorran financial system, investor protection, market abuse and financial securities agreements; and • Act 10/2008, 12 June, governing the collec - tive investment undertakings of Andorra. In synthesis: • the governing body shall adopt the form of a board of directors, composed of at least three directors; • members of the board of directors shall be persons of recognised commercial and professional honourability and must possess adequate knowledge and professional experi - ence to exercise their duties; • the elected chairman cannot hold the position of general manager; • the board of directors shall draft and approve a set of internal operating rules to comply
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