Investing in Andorra

Investment access in Andorra is established but distributed across several channels. Banks and investment firms can provide order reception and execution, portfolio management, personalised investment advice, underwriting or placement services, and in some cases trading-system access, custody, administration, foreign exchange, investment-related credit and research. Financial investment companies, financial investment agencies, asset management companies and financial advisers operate under Law 7/2013, subject to the permissions and service scope recorded by the Autoritat Financera Andorrana (AFA). Check the AFA register before transferring money or signing an advisory, management or custody agreement. Common assets include shares, government and corporate bonds, funds, exchange-traded funds, structured products, derivatives, insurance or pension products with an investment component, real estate, private equity, venture capital, precious metals, commodities, cash-like instruments and digital assets. These assets differ in liquidity, disclosure, valuation, investor protection, custody arrangements, tax treatment and counterparty exposure. A collective investment scheme, or organisme d'inversió col·lectiva (OIC), may be established in Andorra with prior AFA approval, registration and ongoing supervision, normally using a management company and depositary. A foreign OIC that is actively marketed in Andorra generally requires prior registration through a local distributor such as a bank, OIC management company, financial investment company or financial investment agency. The prospectus, key investor information document, authorisation in the country of origin, net asset value information and audit or reporting access deserve a direct review. A compte de valors or other securities custody arrangement records and holds investment positions through a bank or investment firm. Read the contract for segregated or omnibus custody, proof of ownership, reuse of assets as collateral, treatment in the custodian's insolvency, transferability, cash handling, reporting and every applicable fee. A local account or residence in Andorra does not by itself prove that a product is authorised, that a provider offers investor protection or that income is tax-exempt. Onboarding normally includes identity and beneficial-owner checks, the purpose and source of funds, ongoing monitoring and, where relevant, suitability or appropriateness assessments. Build the portfolio around the objective, investment horizon and need for emergency liquidity. Diversification across issuers, asset classes, regions, currencies and liquidity can reduce concentration risk, but it cannot remove market or system-wide losses. A written investment policy and rebalancing bands help control concentration, drawdown, fees and tax lots. Compare a one-time investment with a staged entry according to the amount, time horizon and tolerance for short-term losses. Frequent trading is not the same as long-term investing and adds market, spread, settlement, foreign-exchange, operational, cyber, fraud and execution risks. Leverage, margin, short positions and derivatives also create financing, liquidation and counterparty risks; losses can exceed the initial amount deposited. Compare the all-in net result rather than a headline return. Relevant charges can include entry and exit fees, spreads, brokerage, custody, platform, management, performance, foreign-exchange, transfer, financing and margin charges, as well as tax and reporting costs. The net target return should account for fees and taxes, and regulation does not guarantee a positive return. The Andorran Investment Guarantee System (SAGI) can cover up to 100,000 EUR per holder when an eligible member, such as a bank or authorised investment, asset-management or OIC-management entity providing administration or custody, fails and the assets cannot be recovered. SAGI does not cover losses caused by market price movements, and AFA states that crowdfunding instruments are not included. Fagadi deposit protection concerns banking deposits, not investment losses. Digital assets require a separate review. Law 24/2022 covers the representation of assets through cryptography, distributed ledgers or blockchain, while the AFA supervises relevant participants. An authorisation application is submitted through a registered digital overseer, or veedor digital, and a virtual-asset service provider is a UIFAND reporting entity. Providers may need to identify the client and beneficial owner, establish the purpose and source of funds and monitor the relationship. Digital-asset status does not automatically provide financial-instrument protection; custody, redemption, segregation, classification, taxation and authorisation need individual checks. NFT issuance is excluded from Law 24/2022, although related services may fall within its scope. Tax treatment depends first on tax residence, the investment vehicle, the type of income and any foreign withholding or treaty rules. An Andorran fiscal resident is typically identified through more than 183 days in the country or the centre of economic interests, subject to the applicable legal assessment. IRPF covers worldwide income, including investment-relevant movable-capital income, dividends, interest and capital gains. The general IRPF rate is 10%, with an equivalent 5% treatment for income between 24,000 and 40,000 EUR under statutory conditions. A declaration may be required for capital gains or for movable-capital income without withholding above 3,000 EUR, generally from 1 April to 30 September of the following year. The exact treatment should be checked with the Ministry of Finance or the Departament de Tributs i de Fronteres, especially for foreign withholding, treaties, investment vehicles and professional activity. Real-estate investment is not identical to securities investment. As of 2026, the foreign-real-estate investment tax is 6% for the first property and 10% for the second residential property under Llei Òmnibus II, in force since 13 February 2026. Exceptions, corporate use and eligibility can change the result, so confirm the current position with the Govern d'Andorra, the tax department and a notary before committing funds. Across all asset classes, assess total or partial loss, volatility, inflation, currency movements, illiquidity, issuer failure, manager failure, custody failure, fraud, cyber incidents and changes in tax, legal or regulatory rules.