Andorra’s New Law 2/2026: Key Changes for Businesses, Investors and Residents

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In February 2026, Andorra enacted a major new regulation: Law 2/2026 on the continuity and consolidation of sustainable growth measures.

This legislation introduces significant updates across immigration, investment requirements, commercial regulation and taxation, aimed at ensuring long-term, balanced economic growth in the Principality.

Below we outline the most relevant changes and what they mean in practical terms for companies, entrepreneurs and international investors.

Major Immigration Changes (Especially Relevant for Companies and Professionals)

A large portion of the law focuses on tightening and modernising the immigration framework.

✔️ New work permit for hiring from abroad

A new temporary immigration authorisation allows companies to:

  • process employment contracts collectively in the workers’ country of origin

  • handle multiple work permits simultaneously

  • streamline international recruitment processes

The intention is to help businesses fill workforce gaps faster while maintaining regulatory safeguards.

👉 This is particularly relevant for:

  • tourism & hospitality

  • construction

  • seasonal workforce-dependent industries

✔️ Stronger controls on temporary permits

The law introduces stricter compliance rules:

  • temporary permits cannot be chained continuously

  • the waiting period before reapplying will be set by regulation

  • permits may be revoked if:

    • the employee works in a different sector

    • working hours exceed authorised limits

    • legal requirements are breached

✔️ Self-employed residence permits: key change to the €50,000 requirement

One of the most impactful changes for entrepreneurs and investors:

👉 the €50,000 amount is no longer a refundable deposit
👉 it becomes a non-refundable government contribution

These funds are allocated to public spending priorities such as:

  • housing policies

  • education

  • healthcare

  • infrastructure

💡 This change materially affects the financial planning of any new business setup in Andorra.

Passive Residence Programme: Higher Investment Thresholds

The law also revises the popular passive residency route used by international investors.

✔️ Minimum investment increased

Applicants must now invest:

👉 at least €1,000,000 in Andorran assets

(with a reduced threshold of €400,000 when investing in the national Housing Fund).

Additionally:

  • new Andorran financial instruments qualify as eligible investments

  • the €50,000 contribution is also non-refundable

Tougher enforcement against sham structures and immigration fraud

The legislation significantly strengthens the sanction regime.

Serious violations now explicitly include:

  • sham marriages or partnerships to obtain residency

  • fictitious employment contracts

  • artificial corporate or family arrangements

Financial penalties may reach:

👉 €3,000 – €6,000 or higher depending on the case

Commercial regulation and large retail authorisations

The law also enhances government oversight of commercial expansion.

Authorities may now:

  • impose restrictions when approving commercial activities

  • require additional compliance conditions for projects impacting urban or demographic growth

  • assess labour market impact before approving large retail establishments

👉 This may particularly affect:

  • international franchise operators

  • large retail developments

  • high-impact commercial investment projects

Foreign real estate investment tax updates

Finally, the law updates the tax framework for foreign real estate investment:

  • the definition of liable taxpayers is clarified

  • new tax rates are introduced depending on the type of investment

The goal is to increase public revenues to support:

  • rental housing initiatives

  • broader economic diversification

 What You Should Know

This law confirms a clear strategic direction for Andorra:

✅ tighter immigration oversight
✅ higher financial entry requirements for investors
✅ stronger control over real estate and commercial growth
✅ long-term sustainability focus

For businesses and international investors, the most critical points are:

 ▪️The €50,000 contribution is now non-refundable
 ▪️Passive residency investment thresholds are higher
 ▪️Temporary work permits face stricter compliance checks