ANDORRA Law and Practice Contributed by: Marc Ambrós and David Cuesta, Cases & Lacambra
2.2 Primary Regulators The primary regulators for M&A activity in Andor - ra are: • Autoritat Financera Andorrana (Andorran Financial Authority or AFA) for M&A related to financial and insurance institutions; • Ministeri de Presidència, Economia i Empresa (Presidency, Economy and Companies Min - ister) in charge of supervising merger control; and • Registre d’Inversions Estrangeres (Foreign Investment Register or FIR) in charge of authorising and screening foreign investments in Andorra. 2.3 Restrictions on Foreign Investments The foreign investment regime in Andorra quali - fies as direct investment and includes invest - ments made in Andorran companies by: • non-resident natural persons; • resident natural persons with less than three years of continuous residency in Andorra, since obtaining the residency authorisation when investing in real estate; • legal persons of foreign nationality; • Andorran legal persons with direct or indirect foreign equity participation equal to or greater than 50% of their share capital or voting rights. In case of investments in real estate, the foreign investment regime applies when the foreign participation in the equity of the Andorran legal person is higher than 5%; and • any Andorran legal person when at least 50% of the voting rights of its board of directors are held directly or indirectly by a natural or legal person included in any of the four above-mentioned categories or when they are financed by any of the latter.
Specifically, the term “direct investments” cov - ers: • the incorporation of an Andorran company; • the total or partial acquisition of the shares of an Andorran company; or • the acquisition of any other rights that entitle the foreign company or natural person to par - ticipate 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 Andor - ran company higher than 10% of its share capi - tal 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 natu - ral person is equal to or less than 10%, it is suf - ficient merely to notify the Foreign Investment Register after the transaction. 2.4 Antitrust Regulations There are no antitrust regulations applicable to business combinations in Andorra. Nevertheless, Andorran regulations do foresee the control of economic concentrations. Eco - nomic concentrations 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 inde - pendent 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
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