Andorra Residency: Everything You Need to Know

5 Reasons to Move to Andorra

Nestled in the heart of the Pyrenees, Andorra is a small yet vibrant country that offers a unique blend of stunning natural landscapes, a favorable tax regime, and an exceptional quality of life. Whether you are seeking financial benefits or a serene lifestyle, here are five compelling reasons to consider making Andorra your new home.

Low Tax Environment

Andorra offers one of the most attractive tax regimes in Europe, with personal income tax rates capped at 10%. Corporate tax rates are also highly competitive, ranging from 2% to 10%. In addition, there is no capital gains tax on assets not connected to a business and no gift tax. As a result, Andorra has become a popular destination for high-net-worth individuals and businesses looking to maximize their tax efficiency.

High Quality of Life

With a crime rate of only 5.8 per 100,000 people, Andorra is one of the safest countries in the world. Its healthcare system ranks among the best globally, with a doctor-to-patient ratio of 3.6 doctors per 1,000 people. Andorra also enjoys over 300 days of sunshine annually, making it an ideal location for outdoor enthusiasts. The clean air, pristine environment, and high life expectancy (83.5 years) contribute to an excellent quality of life for residents.

Strategic Location in Europe

Andorra’s location in the Pyrenees Mountains, between Spain and France, places it within a few hours’ drive of major cities like Barcelona and Toulouse. The country's unique geographic position makes it an excellent base for exploring Europe. Despite being a small country with only 468 square kilometers, Andorra attracts over 8 million tourists each year, thanks to its tax-free shopping, ski resorts, and picturesque scenery.

Residency Options and Flexibility

Andorra provides several residency options, including passive and active residency permits. Passive residency requires an investment  in real estate or other local assets, and it is ideal for retirees and those with independent income. Approximately 40% of the population in Andorra are expatriates, reflecting the country’s welcoming nature.

Thriving Business Environment

Andorra has made significant efforts to diversify its economy, focusing on technology, innovation, and tourism. It has a high GDP per capita of around €43,048 and is home to over 10,000 registered businesses. With ongoing investments in infrastructure and connectivity, Andorra is becoming an emerging hub for tech entrepreneurs, digital nomads, and investors.

Benefits of Andorra Residence Permit

The Andorran residence permit option is ideal for investors, entrepreneurs, and high-net-worth individuals looking for flexibility in residency requirements and attractive business opportunities, including the following advantageous: 

Privacy and Discretion

Andorra is known for its discretion and privacy. The country does not engage in automatic exchange of tax information for its residents, providing a higher level of confidentiality for personal and financial affairs.

Family Benefits

Andorra’s residency programs often allow you to include dependent family members, such as spouses and children, under the same permit. This can simplify the process of relocating family members.

Andorra Residency Is Simple and Accessible

Obtaining residency in Andorra is a relatively simple process, with specific requirements depending on the type of residence permit. In general, the Andorran government is receptive to residency applications, making it possible to turn the dream of living abroad into a reality within a few months.

Low Physical Presence Requirements

Passive residency is ideal for those seeking European residency with minimal physical presence requirements, as residents are only required to stay in Andorra for at least 90 days per year.

Affordable Residency Option

Andorra residency is particularly attractive for international business owners due to its minimal financial requirements. You can gain residency with an investment of less than €100,000.

Pathway to Citizenship

While Andorran citizenship requires long-term residency (20 years), holding a residence permit is the first step toward that. It offers the opportunity to eventually become a citizen, with access to visa-free travel to a large number of countries.

No Need to Learn Catalan

There’s no language requirement for obtaining residency, which makes the process easier for foreign nationals. However, having a basic knowledge of Catalan can still be beneficial for integration.

Andorra Residency Options

Andorra has both active and passive residency options tailored to different lifestyles and needs. Active residency is designed for individuals who intend to make Andorra their primary home, requiring them to stay at least 183 days per year, whereas passive residency only mandates a minimum stay of 90 days annually. 

Active residents must register with CASS, the Andorran healthcare system, at an annual cost of approximately EUR 6,406, while passive residents are responsible for arranging private health insurance, which costs a minimum of EUR 2,000 per year.

Tax residency also varies depending on the choice. Active residents automatically become fiscal residents, whereas passive residents can opt to be tax residents or not. The decision is not always straightforward, as many full-time residents still choose the passive route for valid reasons. For more details on the possible types of residency, please refer to the following: 

Andorra Active Residency

Work Permit (Active Resident)

By and large, to obtain active residency in Andorra, individuals need a work permit issued by the Government of Andorra (Govern d’Andorra). This type of residency is ideal for those who plan to work and reside in the country full-time. A work permit is generally provided when an applicant secures a job offer from an Andorran employer. The process includes submitting necessary documents like a passport, rental agreement, and proof of employment.

• Total Cost: No direct cost (the employer covers permit fees).
• Income Tax: 0–10% based on income.
• Processing Time: 1–2 months.
• Renewal Terms: Initially valid for 6 months, then renewable for 1 year, followed by 2-year and 5-year terms, leading to eligibility for citizenship after 10 years.

Self-Employment Program (Active Resident)

This program is for entrepreneurs who plan to reside in Andorra for more than 183 days per year and set up their own company. A government bond of €15,000 is required, but the overall cost is lower than the passive residency options.

• Total Cost: €15,000 refundable bond.
• Income Tax: 0–10% on income above €40,000.
• Processing Time: 3–6 months.
• Renewal Terms: 1 year, 2 years, 5 years, 10 years, citizenship.

Andorra Passive Residency

Passive residency is available for individuals who do not plan to work actively in Andorra but wish to reside in the principality for part of the year, while managing investments or businesses abroad. There are several programs for passive residency, each catering to different groups such as investors, entrepreneurs, and prominent figures in the arts or sciences.

Passive Residency Program - Investors

This program is designed for individuals who are making a significant investment in Andorra. The total investment requirement is €400,000+, which includes a deposit of €48,500 with the Andorran Central Bank. Applicants are required to spend at least 90 days per year in Andorra.

• Total Cost: €400,000+ investment.
• Income Tax: 10% on income over €24,000.
• Processing Time: 1–2 months.
• Renewal Terms: Renewable in intervals of 2 years, then 3 years, leading to a 10-year residency and eventual citizenship eligibility.

Passive Residency Program - Entrepreneur

Designed for entrepreneurs who conduct international business primarily outside of Andorra, this program requires the registration of a business in Andorra with minimal investment. Applicants must maintain a business office and have sufficient financial resources.

• Total Cost: Starting from €60,000 (including office rental and bond payment).
• Income Tax: 0% for residents; 2% corporate tax for the business.
• Processing Time: 3–6 months.
• Renewal Terms: 2 years, 3 years, 10 years, citizenship.

Passive Residency Program - Athletes, Scientists, Artists

This program is available for individuals recognized in fields such as sports, science, or the arts. Applicants must deposit €50,000 with Andorran financial authorities and maintain financial self-sufficiency. There is no need for a business plan.

• Total Cost: €50,000 bond deposit.
• Income Tax: 0% (activities must occur outside Andorra).
• Processing Time: 3–6 months.
• Renewal Terms: first for 2 years, then another 2 years, followed by a 3-year period, and after 10 years, you become eligible for citizenship.

Andorra Tax Residency Explained

Overall, tax residency determines whether an individual is subject to pay Personal Income Tax in a specific country. It is defined by factors such as the length of stay and economic, family, and social ties to that country. In other words, tax residency is determined based on your actual situation and ties to Andorra, rather than simply holding a residence permit.

Under Andorran law, you are considered a tax resident if you meet at least one of the following conditions:

1. You spend more than 183 days in Andorra within a calendar year. Temporary absences are still considered days spent in Andorra.
2. Your primary economic activities or interests are in Andorra, meaning the majority of your income or assets are based in the country.
3. If your spouse or dependent children are residents in Andorra, it creates a presumption of tax residency.

A common misconception is that you can maintain tax residency in Andorra by residing there for only 90 days a year. If you reside in Andorra for only 90 days and spend the remainder of the year in another country, such as Spain, you will likely be considered a tax resident in that other country, Spain in our case, based on international taxation rules.

Changing your tax residency to Andorra requires a detailed analysis of your personal circumstances by tax professionals in both your current country of residence and Andorra to ensure compliance and avoid future complications.

Andorra Residency for EU Citizens

EU citizens can enter Andorra without a visa or passport stamp and stay for up to 90 days without needing any special permits. After this period, they must either apply for a residency permit or leave the country. This flexibility allows EU nationals to explore their options before committing to a long-term stay. The application process is relatively straightforward for EU nationals, given Andorra’s agreements with neighboring countries.

Andorra offers several residency options that are attractive to EU citizens. Passive residency requires an investment of at least €400,000 in local assets, making it ideal for those not seeking employment in the country. Active residency suits business owners and professionals, as it involves establishing a company or securing employment. Both options provide significant tax advantages, such as a low personal income tax rate ranging from 0% to 10%. 

By and large, Andorra presents an excellent option for those looking to optimize their financial situation while enjoying a safe and pleasant living environment.

Andorra Residency Rules in 2024

Andorra’s residency rules require active residents (both self-employed and employed) to reside in the country for a minimum of 183 days per year, making Andorra their primary place of residence. In contrast, passive residents have a more flexible requirement and must stay in Andorra for at least 90 days per year, allowing them to maintain a primary residence outside the country while benefiting from Andorra’s favorable tax and lifestyle environment.

Andorra Residency Requirements

To obtain residency in Andorra, applicants must fulfill several essential criteria, which apply universally across different residency types:

1. Criminal Background Check: A clean criminal record is required, verified through a police certificate from your country of origin, typically issued within the last three months​.
2. Proof of Financial Self-Sufficiency: Applicants must demonstrate financial independence. This usually involves showing a minimum bank balance of around €38,000, with additional funds required for dependents. This ensures that you can sustain yourself and your family without relying on local welfare​.
3. Health Insurance: Private health insurance is mandatory for all applicants until they are eligible to enroll in the Andorran public healthcare system. This coverage is essential as it guarantees access to healthcare during your stay​.
4. Stay Duration: Residency in Andorra requires a commitment to staying in the country for a specified number of days per year, depending on your situation. This ranges from 90 days to 183 days annually, ensuring that residents maintain a substantial presence in the country​.
5. Investment or Employment: Depending on the residency pathway, you may need to make an investment or demonstrate employment. For those applying through financial means, a minimum investment of €400,000 is required, which can be allocated to real estate, financial products, or government bonds. For applicants seeking to work or establish a business, proof of employment or the establishment of a company is necessary​.
6. Documentation: The necessary paperwork includes a passport, proof of accommodation in Andorra, and a CV or brief biography. All documents must be legalized and translated into Catalan, the official language of Andorra​.

The general list of the supporting documents is as below: 

• Valid Passport Copy. A copy of the applicant’s valid passport.
• Criminal Background Certificate. Issued within the last three months, verifying the applicant has no criminal record.
• Proof of Accommodation. Documentation such as a rental agreement showing that the applicant has a place to live in Andorra.
• Certificate of Good Conduct. A formal document confirming that there are no legal impediments against the applicant.
• CV or Short Biography. A concise summary of the applicant’s professional or personal background.
• Marriage Certificate (if applicable). For those applying with a spouse, a copy of the marriage certificate is required.
• Health Insurance Policy. Proof of valid health insurance coverage.
• Bank Certificates. To meet the residency permit requirements, applicants must demonstrate financial self-sufficiency. The Andorran government assesses this by multiplying the minimum annual wage by 3. For passive residency applications, a bank balance of €38,000 is required. An additional €5,000 is needed for each dependent. The only exception is for D active residencies, where applicants planning to conduct business in Andorra are not required to show proof of income.
• Address. All residency types require proof of an address in Andorra, including work permits. This can be either a property you own or a rental agreement for temporary housing.

These requirements are defined to ensure that individuals residing in Andorra are financially stable, contribute to the economy, and spend a significant amount of time in the country. Following successful application and renewal periods, residents can eventually apply for citizenship if they meet the long-term residency conditions

How to Apply for Andorra Residency? A Step-by-step Guide

This section outlines the necessary steps to successfully obtain Andorran residency.

Step 1. Choose the Type of Residency

First, determine whether you are applying for passive residency or active residency. Passive residency is for individuals who do not plan to work in Andorra but wish to live there, such as investors or retirees. Active residency is for those intending to work in Andorra, either by being employed or starting a business.

Step 2. Ensure Eligibility

For passive residency, you are required to make a minimum investment in Andorran assets, such as real estate, or businesses, and reside in Andorra for at least 90 days per year. Health insurance is also a mandatory requirement.

For active residency, you must either have a job offer from an Andorran company or establish a business in the country. If you plan to start a business, owning at least 10% of the company is necessary. Also, you need to register for social security, meet salary requirements, and have health insurance coverage.

Step 3. Prepare the Application

Once you have confirmed your eligibility, gather the necessary documents, legalize and translate them into Spanish. These typically include proof of identity, financial solvency, and legal standing, as well as certificates confirming your health and criminal record status. If you are applying for active residency, you will also need documents related to your employment or business activity in Andorra.

Step 4. Submit the Application to the Immigration Department

Next, you will need to submit your application to the Andorran Immigration Department (Servei d’Immigració d’Andorra), part of the Ministry of Interior. Applications must be submitted in person at the immigration office located in Andorra la Vella.

When you submit your application, the authorities will review it for completeness and accuracy. They will provide you with a reference number to track the status of your application. During this phase, make sure you have an appointment scheduled, as walk-ins are typically not accepted.

Step 5. Pay the Application Fees

You will be required to pay the necessary processing fees when submitting your application. For passive residency, this fee is approximately €1,200, though it may vary depending on your specific case. For active residency, the fee for processing work permits or business registration is around €600. Additional costs, such as notary fees and health insurance premiums, may also apply.

Step 6. Undergo Medical Examination

As part of the residency process, you are required to undergo a medical examination. Once you complete the examination, the results must be submitted to the immigration authorities as part of the residency approval process.

Step 7. Await the Outcome

The processing time for residency applications typically takes between four to six weeks. During this time, the Andorran Immigration Department will conduct background checks, verify your submitted information, and assess your financial status. If additional information is needed, they will contact you for further details.

Step 8. Receive Your Residency Card

Once your application has been approved, you will be notified by the immigration authorities. You will need to collect your residency card in person at the immigration office. Once your application has been approved, you will be notified by the immigration authorities. You will need to collect your residency card in person at the immigration office. Make sure to bring all required documents and identification when you go to collect your card.

Andorra Residency as a Path to Citizenship

Andorra's residency programs offer a pathway to citizenship, but the journey is lengthy and demands commitment, with strict stay requirements before eligibility can be achieved. Residents in Andorra enjoy most of the same benefits as citizens, with the notable exception of the right to vote. Citizenship is possible, but only after residing in the country for a significant period of time — 20 years. However, this can be reduced to 10 years if you complete your education in Andorra, or to 3 years if married to an Andorran citizen.

Residency programs in Andorra generally require a minimum stay of 90 days per year, while full-time residency, which is necessary for permanent status, mandates living in the country for at least 183 days annually.

Once a resident for the required duration, you can apply for citizenship, which offers significant benefits, including visa-free travel to 171 countries and special privileges within the European Union. However, Andorra imposes strict rules on dual citizenship, and applicants must renounce their previous nationality to become Andorran citizens.

FAQ

How to Become a Resident of Andorra?

To become a resident of Andorra, you can apply for either active or passive residency. Active residency requires having a work contract in Andorra or establishing a business there, while passive residency is geared towards individuals who can support themselves financially without working in Andorra, such as retirees or investors. Passive residents must make an investment of at least €400,000 in the country, including real estate or financial assets. Both types require proof of income, a clean criminal record, and a minimum stay in Andorra.

Who Can Get a Residency in Andorra?

Residency in Andorra is open to individuals of all nationalities, with no restrictions based on citizenship. For active residency, applicants must be at least 18 years old, though minors can be included under the application of a parent or legal guardian. Similarly, passive residency requires applicants to be 18 years or older. There is no upper age limit for either residency type.

Applicants must also meet financial criteria and demonstrate sufficient income to support themselves and their family members. In addition, they need to provide a clean criminal record from their country of origin and health insurance coverage that is valid in Andorra. Minors accompanying applicants must meet health and education requirements, which may include enrollment in local schools. 

How Much Money Do You Need to Get Residency in Andorra?

To obtain residency in Andorra, you need to invest at least €400,000 in local assets (such as property or financial investments) for passive residency and deposit €50,000 with the government, plus €10,000 for each dependent. Professional service fees for legal assistance typically range from €5,000 to €15,000, while document translation costs can add another €50 to €200 per document. Additionally, government application fees are €1,200 for active residency and around €600 per person for passive residency. These costs, along with the required investment, make up the bulk of the financial requirements for Andorran residency.

How Long Does it Take to Get Residency in Andorra?

The process to obtain residency in Andorra typically takes around 2 to 3 months from the time the complete application is submitted, assuming all required documents are in order. Processing times may vary depending on the complexity of the case, such as the need for document verification, background checks, or the fulfillment of investment requirements. Delays can occur if there are issues with documentation, especially apostilling or criminal record verification.

What is the Easiest Country to Get Residency in Europe?

The easiest countries to obtain residency in Europe include Andorra and France. In Andorra, you can choose between active residency, which requires setting up a business or working in the country, or passive residency, where you need to prove financial self-sufficiency and invest a minimum of €400,000 in local assets. Residents must spend at least 90 or 183 days per year in Andorra. France offers the Visa Visiteur, allowing individuals with sufficient monthly passive income (like pensions or investment income) of at least €3,000 to reside in France without working. There is no stay duration requirement. After arriving, you can apply for a Carte de Séjour, which permits longer stays and renewable residency, ideal for retirees or those with independent financial means.