Andorra Redefines Its Sustainability Model: New Changes in Immigration and Foreign Real Estate Investment

Andorra Redefines Its Sustainability Model: New Changes in Immigration and Foreign Real Estate Investment

Authors: Martí Periago, Albert Barroso

On 21 October 2025, the Government of Andorra submitted the Sustainable Growth Continuity and Consolidation Bill to Parliament under an urgent legislative procedure.

The proposed legislation aims to strengthen the balance between attracting foreign talent and investment, maintaining social cohesion, preserving the territory and ensuring access to affordable housing.

The Bill introduces substantial changes in immigration, residency permits, commercial regulation and foreign real estate investment.

New Temporary Work Permit Through Overseas Recruitment

One of the most notable developments is the creation of a new temporary immigration permit for overseas recruitment.

This mechanism will allow employers to process employment contracts collectively in workers’ countries of origin, increasing efficiency and reducing administrative delays.

Although further regulatory development is still required, a specific administrative fee of €190.96 is already envisaged for this permit.

Changes to Self-Employed Residence and Work Permits

The Bill introduces two significant reforms affecting self-employed residence permits.

Reserved Authorisations for Qualified Professionals

Qualified professionals will benefit from a reservation system that grants them up to three months to demonstrate compliance with all legal requirements, including professional licensing and registration where applicable.

Partial Conversion of the Mandatory Deposit

Of the €50,000 currently required to be deposited with the Andorran Financial Authority (AFA), €30,000 will become a non-refundable contribution to the State.

These funds will be allocated to public services such as healthcare, education, security, transport and infrastructure.

Stricter Immigration Controls

The Bill strengthens immigration oversight and compliance mechanisms.

Key measures include:

• Mandatory proof of legal residence for cross-border workers in their country of residence.

• Expansion of the grounds for cancelling existing permits.

• Increased monitoring of excessive working hours.

• Sanctions for failure to comply with legal or educational requirements.

The legislation also classifies fraudulent marriages and civil partnerships entered into for immigration purposes as a very serious offence.

New Requirements for Passive Residency Permits

Significant changes are also proposed for non-lucrative residency permits.

Increase in the Minimum Investment Requirement

The minimum required investment will increase from €600,000 to €800,000.

A new investment option will also be introduced, allowing investments in financial instruments or debt securities issued by Andorran entities, subject to a maximum duration of 36 months.

Non-Refundable Contributions

The reform also introduces non-refundable components within the mandatory deposit:

• €30,000 of the €50,000 deposit paid to the AFA will become non-refundable.

• €6,000 of the €12,000 required for each dependent will also become non-refundable.

Reform of the Commercial Activities Act

The Bill expressly grants the Government authority to define national commercial policy.

The opening or modification of large commercial establishments will require a prior public-interest assessment based on factors such as:

• Accessibility and mobility.

• Economic and commercial impact.

• Environmental and urban planning considerations.

• Labour market impact and employment policies.

Reform of the Foreign Real Estate Investment Tax

The proposed legislation also modifies the tax rates applicable to foreign real estate investment.

The new rates would be:

• 6% on the construction or acquisition of a single house, apartment or flat (including up to three parking spaces and a storage unit).

• 10% for investments exceeding these limits or involving multiple properties.

Transitional Rules and Entry into Force

Applications for foreign real estate investment submitted before the entry into force of the new law will remain subject to the current tax rates.

Likewise, applications for self-employed residence permits and non-lucrative residence permits filed before the new legislation becomes effective will continue to be governed by the existing legal framework.

Given the urgent legislative procedure, the Bill is expected to be approved in the coming weeks and enter into force the day after its publication in the Official Gazette of the Principality of Andorra (BOPA).

Conclusion

The new Bill represents another step in Andorra’s strategy to manage economic and demographic growth in a sustainable manner.

The proposed measures strengthen immigration controls, increase requirements for certain residency categories, reform real estate taxation and introduce new mechanisms designed to preserve the Principality’s social and territorial balance.