Invest in Andorra: housing and other investments

Investing in Andorra can be a great option for many people who want to preserve their capital and keep it in a safe haven, as well as obtain good returns in the future. At the end of the day, investment consists of that: firstly, to preserve value in the greatest possible way and, secondly, to use time and effort so that the generated value works for itself, generating more value.

However, it would be worth explaining a little about this concept since in the end it is so abstract and includes so many things that it can generate confusion. For this reason we are going to separate this article into different sections that could be included in the idea of investing in Andorra.

Ways to invest in Andorra

As we said there is many things that can be considered as an investment in Andorra, but we can list several examples:

  • Create one bank account in an Andorran bank. Opening a bank account in an entity in the country means maintaining capital in the jurisdiction, and therefore can be considered as investing in Andorra. There may be some reasons for doing this, for example for security. The Andorran banking system is very safe and is supported by decades dedicated to the refuge of other people's capital.
  • Create an investment account in an Andorran bank. Andorran banks usually offer different types of financial products apart from current savings accounts, and also have services to invest in different and varied things, with different levels of risk.
  • Setting up a business in Andorra. Creating a company is investing in Andorra because a social capital that has to be paid is used to create wealth in the country: hiring suppliers, offering services to clients, buying products, hiring employees, etc.
  • Buy shares of an Andorran company. In addition to setting up your own company, you can buy shares or participations in one that already exists in the country, thus investing in it and providing capital that will be used in the country. This may be one of the best investments in Andorra.
  • Buy debt bonds of a company. Apart from shares to be part of a company through social capital, you can also buy debt bonds, which will offer a return determined by the financial product.
  • Acquire state debt bills and bonds. For those who want to keep their capital in fixed income products insured by a state, having these titles is a good way to invest in Andorra.
  • Buy a home in the country. The real estate market is considered one of the safest investments, and in Spain it is the most used and the best, since approximately 70% of Spaniards own a property, a very high percentage compared to their environment. Investing in housing in Andorra also allows the buyer to enjoy the asset by living in the mountains.

As we see, the possibilities are very wide and there are many ways to invest in the country. Each person can choose what they are interested in buying in Andorra. Of course, it is worth mentioning that this last option is complicated given that the Government of Andorra has frozen foreign investment in real estate pending a new law that taxes such investments. Currently the draft Law indicates that the tax will be from 3% to 10%, but it is not yet final.

Invest in housing and other real estate in Andorra

When it comes to investing in real estate in the Principality, I think it is relevant to understand the price evolution of the different types of assets in this regard.. In our article on housing and flats in Andorra We have already left some data on the situation of prices and rentals of apartments in the Principality of Andorra, focused on those who want to obtain a home to reside. But here we are interested in investing, and when it comes to investing there are many different types of assets.

Specifically, below we show the evolution of the average prices of real estate according to the type of real estate: buildings, single-family homes, apartments, parking lots, land, warehouses, commercial premises, houses and other constructions.

Price per square meter of real estate in Andorra to invest, 2017-2023
Price per square meter of real estate in Andorra, 2017-2023

As we can observe, Right now the most undervalued real estate to invest in is land and warehouses, which is around €1,000/m2. Which, on the other hand, is obvious. Next, we find the parking lots, buildings and "other constructions", around €1,500-2,000/m2. The next most expensive are commercial premises and single-family homes. And finally, the most expensive real estate properties are apartments, obviously, which have risen from just €2,100/m2 in 2017 to almost €3,600/m2 on average.

Here, in the data of the Household budget surveys you can find more relevant informatione such as that 90% of the real estate housing stock are flats, that 60% of people live for rent, that 20-25% of households in Andorra have a second home or that 70% of second homes correspond to Spaniards and another 22% to Portuguese (with which clearly the Spanish are more predisposed to invest in housing).

On the other hand, in the government sectoral statistics you can find information about the construction, such as building permits issued in total, by parish, by type of property, etc. Or also the area and authorized units, number of real estate transactions and a lot of parameters and breakdowns. Undoubtedly very relevant information when investing in land, housing or any other type of property.

Investment for passive residents

As we discussed in our article on Andorran residence permits, passive residence requires investing 600,000 euros in Andorra. Specifically, the legislation requires establishing primary and effective residence in the Principality for at least 90 days per calendar year and demonstrating your commitment to the country by investing at least €600,000 in Andorran assets in the 6 months after making the application. considering Andorran assets the following:

  • Real estate located in the territory of the Principality of Andorra.
  • Shares in the share capital or own funds of resident companies.
  • Debt or finance instruments issued by resident entities or public administrations.
  • Life insurance products contracted with entities resident in the country.
  • Unpaid deposits to the Andorran Financial Authority (AFA).

That is, the same ones we mentioned above but adding the life insurance products and the bonds to be deposited in the AFA. It should be noted, however, that theForeign real estate investment applications are currently frozen in Andorra pending the approval of a new tax that applies to them. The Government froze them to avoid a call effect before said new taxation comes into force.

The reason for including the deposit to the AFA is that by law lThe main holder of the passive residence permit must deposit €50,000 to the Andorran Financial Authority for their residence and €10,000 for each of their dependents who acquire the cResident status without lucrative activity.

These deposits are as they say unpaid and act as collateral. In other words, they are returned when the permit is withdrawn and there are no debts with public administrations and they are deducted from the amount to be invested in Andorran assets to obtain residence.

Is it profitable to invest in Andorra?

As we have indicated above, each person or business must evaluate what should be bought in Andorra or if it is a good destination for your investments. However, we are going to offer 15 quick reasons why it might be a good idea to do it, in whatever form. In any case, you can get more details by reading about the advantages of the country.

15 reasons to invest in Andorra
  1. The Principality has a very stable political framework and economy. With an economic growth of 3.2% on average since 2000, this small country has a strong, stable and secure economy. It is also relevant that you have about a stop 2% only. As if that were not enough, its policy stands out for its solidity and neutrality, and it has always been peaceful during conflicts (Spanish Civil War, Second World War). And as every self-respecting investor knows, stability is essential to invest.
  2. It is a country prosperous and diverse. With a steadily rising GDP per capita at purchasing power parity of 49,193 international dollars, Andorra is an increasingly wealthy country. The sectors and markets it covers are becoming more and more diverse, especially with the digitization of the economy and the world in general.
  3. A tourist country, with a market of 8 million visitors a year who come from shopping and sports and leisure trips. 75% of the Andorran economy are services, the potential market is huge and can bring great benefits. On the other hand, this means that there are always events and things to do. There is no boredom in a country dedicated abroad.
  4. Negotiations of an association agreement with the European Union which will facilitate access to the internal European market, with more than 500 consumers. Since the reforms initiated after the financial and BPA crisis, Andorra is more open to the world than ever.
  5. Double taxation agreements signed with many countries, from France, Spain and Portugal to Luxembourg, the United Arab Emirates, Liechtenstein and Malta. Your taxes will only be taxed once, and if it is in Andorra, you will enjoy one of the jurisdictions with the lowest taxation in the world.
  6. One of the most competitive tax frameworks in Europe. Approved but with low rates, Andorra has taxes similar to those of its neighboring countries, but with substantially lower rates. From a VAT of 4.5% to a corporation tax and personal income tax of a maximum of 10%, the Andorran tax system it is very attractive to investors.
  7. Solid and competent public financial system. Andorra has a public debt of less than 40% of GDP, and every year the level of debt decreases and the rating of international auditing companies increases. To get an idea, Spain and France have around 100% of public debt, and the financially strict Germany more than 60%.
  8. Andorra has the best health system and is the fourth healthiest country, according to The Lancet. Health based on the principles of co-responsibility, solidarity and freedom of doctors, together with the fact that the Andorran economy works very well, make their social security and health system not only sustainable, but competent and attractive to their users and citizens
  9. Internet connection of the latest technology. Andorra has since 2013 fiber optic coverage in every home and populations of the country, and is constantly renewing and increasing its maximum speed, currently at a rate of 700 Mbps at a very affordable price.
  10. A country willing to bet on the sectors of the future. Andorra is determined to be a truly live laboratory for companies and researchers, supporting innovation, start ups and present and future markets such as big data. This was stated verbatim during the celebration of the Smart City Expo World Congress event, in Barcelona. It also offers its support to cryptocurrency and blockchain projects, artificial intelligence and much more.
  11. Access to excellent education. Although in tertiary education the andorran educational system is very weak compared to education in Barcelona (especially due to infrastructure and lack of diversity of degrees), primary and secondary education in Andorra is exquisite. Also made up of three different models to choose from: Spanish, French and Andorran. Freedom is usually always taken into account in this Principality.
  12. A safe country, with the lowest crime rates in the world. The proverbial Andorran security was known 55 years ago and continues to be today, in the 21st century, when everything is measured with statistics. The United Nations Crime Trend Survey, the world crime statistics published annually by the United Nations Office on Drugs and Crime, shows year after year the low incidence of crime in the country of the Pyrenees. The latest data from the United Nations statistics establish crime in Andorra at 153.9 people convicted of crimes per 100,000 inhabitants.
  13. An open and cosmopolitan society that brings together people of more than 100 different nationalities. In this Principality converge languages and nationalities of all kinds. In summary in Andorra there are: 49% of Andorrans, 25% of Spaniards, 12.3% of Portuguese, 4.3% of French and thus up to more than a hundred different minority nationalities. This coexistence, tolerance and understanding makes full sense both for the location of the country, as for the importance, as for the fact of being an open and essentially tourist country.
  14. One of the lowest electricity rates in Europe. You can get more information at our article on electricity in Andorra. Unlike what happens for example in Spain and France, where there are more fees, taxes and subsidies in the price of electricity than the cost of production itself, in Andorra it hardly has the obvious surcharge for network maintenance. In addition, the electricity that it does not produce is imported from its neighboring countries obviously without applied taxes and at a good price, resulting in a pretty cheap rate.
  15. Highly Committed Government with an open international economy, innovation and economic diversification. In a world as globalized as today, being cosmopolitan, open and attractive is a giant step towards prosperity. Even more so when it comes to investing or starting business, because dynamism is what moves the invention and discovery.
  16. A country of landscape and environment. With more than 95% of the territory of Andorra being a forest mass, having three natural parks of which one world heritage of humanity, clear commitment to the environment With recycling, efficient energy and clean air, the Principality is a good benchmark for environmental sustainability. In addition, they have no other option: they live off tourism and the services that their rich mountain ecosystem offers in part the Pyrenees.

Summary on investments in Andorra

invest in housing in andorra

The Principality of the Pyrenees is right now in a perfect situation for investment. It has just opened abroad recently with the accumulation of reforms begun in 2009 and it is still in the process of becoming a new country that is more open, more international, with more foreign capital and more entrepreneurship. The resident population, companies and the capital attracted by Andorra are increasing year by year, without pause. In addition, today the cost and lifestyle already offers considerable advantages.

Do you want to take advantage and invest now that the country is being reborn or do you prefer to wait for others to reap the fruits of now seeds to do so, then too late? We have already made the decision. Now you need to take yours. In case you want to dare, do not hesitate to contact us by clicking here. We will inform you, we will personalize your case and we will carry out all the pertinent procedures with professionalism, at full speed and at the minimum cost so that you can take advantage of your investment. You can also check what they are all our services.

2 thoughts on “Invertir en Andorra: vivienda y otras inversiones”

  1. Bonjour, and -at-il encore en Andorre des terrains à vendre pour y installer des gîtes de type Tiny House, en association avec un andorran (car je thought que c'est la loi, il faut un associe andorran), pour des touristes et voyageurs de passage?
    L'idée, en fait m'intéresse au leveau de la chaîne des Pyrénées.
    From tiny houses to the event of law becoming the fois de lieux d'hébergement et de travail permettant d'offrir des conditions de travail en security pour des investisseurs.
    Une autre idée m'intéresse quel is the position of the Principauté d'Andorre sur le marché des cryptomonnaies?


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Invest in Andorra: housing and other investments
Jose Sanchis, Abast Technology and Systems Specialist, Andorra Insiders
Jose Sanchis

ABAST Technology and Systems Specialist


Andorra Insiders is an information platform about Andorra managed by ABAST, an Andorran professional consultancy firm for legal, tax and accounting services specialized in establishing people and businesses in the Principality of Andorra. More information here.

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