Foreign investment companies skyrocket in Andorra. During 2021, the Government of the principality authorized a total of 738 applications, which is equivalent to an increase of 128% compared to the 324 companies registered in 2020 and 138% more in relation to the 310 new signatures of 2019.
This process is carried out under the supervision of the Department of Legal and Economic Records of the Ministry of the Presidency, Economy and Business, whose head is Jordi Gallardo. The Department takes into account the analysis of the total volume of foreign investment and its subsequent control. The new bill to amend the Foreign Investment Law ratifies the surveillance elements of the Administration.
The new legal text aims, among other things, to streamline the procedures related to this type of investment and reinforce subsequent work by establishing a control system for authorized foreign investments. In this way, a mechanism is introduced to quickly detect information such as possible changes in the ownership of companies that may change the qualification of a company as a foreign or national investment. With this mechanism, it will be possible to automatically control the fluctuations in the ownership of business projects.
The Minister of the Presidency, Economy and Business pointed out that “it is important to focus the economic diversification strategy to attract investment that adds value and promotes new economic sectors in the country.” In this sense, Jordi Gallardo highlighted that “with the new text we take an important step to continue being competitive from the point of view of attracting investment”. In his opinion, “it was necessary to align with the trends that give investors more legal certainty.”
Likewise, the bill also intends to align the foreign authorization model to the practices that are developed in the European environment and, in this way, reaffirm Andorran harmonization with international standards. The division of the process into two models stands out.
On the one hand, under the liberalization regime, it may materialize without prior administrative authorization in different cases, such as in the case of investors who are residents or nationals of a country that has a double taxation agreement (CDI) with Andorra, and that they are not considered high risk in ML/FT (money laundering and financing of terrorism) by the UIFAND, the Financial Intelligence Unit of Andorra. For Jordi Gallardo, “the new liberalization regime will reduce the bureaucratic deadlines considerably for the investment of the countries with CDI. The objective is to place ourselves in the figure of 30 days”.
The second model maintains the same procedures that currently apply to all foreign investment companies. The pre- and post-monitoring will be carried out in the same way in both cases. The importance of foreign investment companies in Andorra is notable. In fact, they represent more than half of the authorized companies. The total number of authorized firms rose to 1,308 last year and 56% (738) were foreign investment.
