Income tax capped at 10%, low crime, a rare quality of life, the mountains on your doorstep: the reasons for settling in Andorra are familiar to anyone considering expatriation. What surprises a French national more is the other side of the picture: scarce and expensive housing, no railway station and no commercial airport in the country, and an entry ticket raised significantly in 2026. Here are the advantages and disadvantages of life in Andorra, with figures and without evasion, so that you can decide in full knowledge of the facts.
Key points
- Taxation: personal income tax (IRPF) capped at 10%, local VAT of 4.5%, no wealth tax and no inheritance tax.
- Daily life: 75% of consultations and 90% of hospital stays reimbursed by social security, three free school systems.
- Drawback no. 1: since Llei 2/2026, passive residence requires 1 million euros of investment and a non-refundable payment of 50,000 euros.
- Drawback no. 2: housing is scarce, and a tax of 6% to 10% applies to property purchases by foreign nationals.
- Drawback no. 3: no railway and no commercial airport, the nearest ones being in France (L'Hospitalet) and Spain.
The advantages of living in Andorra: taxation, safety and quality of life
The Principality's strengths are not limited to tax. Safety, the healthcare system, free schooling and the mountains weigh as heavily as the tax advantage in the decision of many families coming from France or Spain.
Taxation: an IRPF capped at 10% and no wealth tax
Personal income tax (IRPF) exempts the first 24,000 euros of earned income or pension income, brings the effective rate down to 5% between 24,000 and 40,000 euros through an allowance, then caps at 10% above that (Llei 5/2014 of 24 April 2014). Savings income is exempt up to 3,000 euros per year, then taxed at 10%. The general indirect tax (IGI), the local equivalent of VAT, stands at 4.5% at the standard rate, and corporate income tax does not exceed 10%. There is no wealth tax and no inheritance tax. Contrary to a widespread belief, this regime is not obtained with a simple address: it requires effective tax residence, meaning either more than 183 days per year in the country or the centre of one's economic interests in the Principality. For a company director, this Andorran tax framework combines with the treaty signed with France, which prevents double taxation.
Safety: low and declining crime
Safety ranks among the leading reasons families settle here. According to the Departament d'Estadística, the Andorran police recorded 2,255 offences in 2025, a figure down 3.6% year on year, in a country of more than 80,000 inhabitants. Offences against persons remain rare, and the small size of the territory contributes to this sense of everyday calm.
Healthcare: the CASS reimburses 75% of consultations
The healthcare system rests on the Andorran social security fund (CASS), to which employees and self-employed workers contribute. By following the referring doctor pathway, known as the preferential route, the CASS reimburses 75% of consultations and 90% of hospital stays on the basis of its reference rates; private health insurance covers the remainder. The Hospital Nostra Senyora de Meritxell, in Escaldes-Engordany, provides emergency care, maternity services and a broad range of specialties.
Education: three free school systems
Every family with children chooses freely between three free public systems: the Andorran school, which teaches in Catalan alongside French and Spanish from primary level, the French school, which follows the French national curriculum up to the baccalauréat, and the Spanish school. Children can therefore continue a French education without interruption, while becoming trilingual through contact with other pupils.
Europe: the euro without Union membership
Andorra is not part of the European Union, but it uses the euro under a monetary agreement signed in 2011 and applies many European rules, particularly for banking services. An association agreement, intended to give it access to the internal market, was signed on 19 October 2026 in Brussels; it will only enter into force after a referendum in Andorra, a two-thirds majority vote by the Consell General and ratification by the twenty-seven member states. For a French national, daily life is made simpler: the same currency as in the rest of Europe, with no currency exchange. Day to day, public services operate according to quality standards comparable to those of neighbouring countries.
Living environment: skiing, thermal baths and mountains every day
In winter, the Grandvalira ski area, the largest in the Pyrenees with around 215 km of slopes, is just a few minutes from the main parishes, and the Caldea thermal baths in Escaldes-Engordany are open all year round. In summer, hiking and high-altitude lakes take over, and the thermal baths remain a refuge on days of bad weather. Cultural life remains modest, but Catalan culture, parish festivals and mountain cuisine set the rhythm of the year. For an outdoor enthusiast, it is a rare destination in Europe for its everyday access to nature.
The drawbacks of living in Andorra: housing, access and cost of entry
The limits of life in Andorra have less to do with daily life than with the conditions of access: finding housing, entering and leaving the country, obtaining a residence permit. These became stricter in 2025 and 2026.
Housing: scarce supply and sharply rising prices
Finding housing is the first difficulty newcomers face, as supply does not keep pace with demand. According to the Departament d'Estadística, the average price of apartments sold reached 4,416 euros per m² in the first quarter of 2026, up 3 % year on year, following a 10.5 % increase in 2025. On the rental side, which concerns nearly two households out of three, leases of less than one year were signed at an average of 12.1 euros per m² per month in 2025; listings, however, show much higher levels, around 26 euros per m² according to the Pisos.ad portal. Purchases are also regulated: since Llei 5/2025, a person who does not live in the country may acquire only one single-family house or two apartments, and the tax on foreign investment in real estate stands at 6 % for a first property and 10 % beyond that since Llei 2/2026.
Cost of entry: 1 million euros for passive residency
The entry ticket has risen markedly. Since Llei 2/2026, residency without gainful activity requires an investment of at least 1 million euros in local assets and a non-refundable payment of 50,000 euros to the Andorran Financial Authority (AFA), increased by 12,000 euros per dependent. The applicant must also take out insurance covering illness, incapacity and old age, reduced to illness only from the age of 60. For those working in the country, CASS contributions apply: 6.5 % of gross salary payable by the employee and 15.5 % by the employer. Self-employed workers also pay 50,000 euros non-refundable to the AFA, except for digital economy, entrepreneurship or innovation projects.
Warning
Since Llei 2/2026, the 50,000 euro payment to the AFA for passive residency is non-refundable, and it is increased by 12,000 euros per dependent.
Access: neither a railway station nor a commercial airport in the country
Andorra has no railway station and no commercial airport. On the French side, just beyond the border, the nearest station is L'Hospitalet-près-l'Andorre, on the line linking Toulouse to Latour-de-Carol, and the Toulouse and Barcelona airports are around three hours away by road. Andorra-La Seu d'Urgell airport, on the Spanish side, offers only a limited number of flights. In winter, the road over the Port d'Envalira, at more than 2,400 metres, may be closed or subject to mandatory snow chains: the weather then dictates travel towards France. In practical terms, every long-distance journey begins with several hours in the car.
Specialised care: some treatments outside the borders
The local health system covers routine care well, but certain highly specialised treatments are provided across the border, in approved facilities in Spain, mainly in Catalonia, or in France, subject to prior authorisation from the CASS. These involve travel, sometimes repeated, to Barcelona or Toulouse.
Language, country size and employment: a more constrained daily life
Only Catalan has official status, and most administrative procedures are conducted in Catalan, even though French and Spanish are widely understood. With a little over 80,000 inhabitants, the job market is narrow, focused on retail, tourism and finance, and residence and work permits are subject to quotas set by the Govern (the Andorran government). For families, and especially for a spouse wishing to continue their career, this is often the real limit of a relocation. Finally, social life is more close-knit than in a city: some thrive there, others quickly feel the isolation of the valleys.
Andorra or France: the figures behind a relocation
Placed side by side, the two countries point to a clear trade-off: significantly lighter taxation on one side, a higher entry cost and tighter access conditions on the other.
| Criterion | Andorra (2026) | France (2026) |
|---|---|---|
| Employment or pension income | ✓€24,000 exempt, then 10% at most | ✕Progressive scale up to 45% |
| Savings income | ✓10% after €3,000 exempt | ✕PFU flat tax of 31.4% |
| Consumption tax | ✓IGI at 4.5% | ✕VAT at 20% |
| Wealth | ✓No taxation | ✕IFI above €1.3m of net property assets |
| Inheritance in direct line | ✓No duties | ✕Up to 45% |
| Reimbursement of a medical consultation | ✓75% (preferential pathway) | ✕70% of the agreed tariff |
| Purchase of a home by a foreign national | ✕Prior authorisation and a 6% to 10% tax | ✓No restrictions |
| Transport | ✕Road only (nearest station at L'Hospitalet) | ✓Rail network and airports |
| Official language | ✕Catalan | ✓French |
✓Advantage✕Drawback
The table does not capture everything. For a purchase, foreign investment authorisation must be obtained before signing at the notary, and financing usually goes through a bank loan with local banks, which in practice require a larger down payment from non-resident buyers. On the retirement side, pensions from French public sources remain in principle taxable in France, which narrows the gap for a former civil servant.
Example: a couple living off investment income with €100,000 in dividends
By way of illustration, consider a married couple with no children, receiving €100,000 a year in dividends from foreign companies, that is €50,000 each, and relocating under passive residence. Foreign withholding taxes are set aside.
- Resident in France: 100,000 × 31.4% = €31,400 in PFU flat tax.
- Resident in Andorra: (50,000 − 3,000) × 10% = €4,700 in IRPF per spouse, that is €9,400.
Couple living on investment income, 100,000 € of dividends per year
France or Andorra: the figures compared
Illustrative example, foreign withholding taxes set aside.
The saving comes to 22,000 euros per year. Against this, settling in costs 62,000 non-refundable euros paid to the AFA (50,000 euros for the holder and 12,000 euros for the dependent spouse): this cost is absorbed in under three years. If the mandatory investment of 1 million euros takes the form of an apartment, the tax on foreign property investment adds 60,000 euros, and the payback period then exceeds five years. Private health insurance and housing, whether rented or mortgaged, still have to be budgeted for: at the average rate of recent 2025 leases, a 90 m² property rents for around 1,090 euros per month.
Who is Andorra a good choice for?
Andorra is not the right expatriation destination for everyone: the outcome depends less on the country than on the profile of the person moving there. Four situations come up most often.
The person of independent means or the well-off retiree
This is the most favourable profile, provided the entry ticket of the passive route and private health insurance are accepted.
The company director preparing a sale
The benefit is real, but the move must be genuine and take place several months before the sale, and the French exit tax must be anticipated.
The family
Free schools for children, a safe environment and quality of life all argue in favour of moving; housing and the spouse's career are the two points to confirm before leaving.
The freelancer or online entrepreneur
Active residence is suitable if the clients are elsewhere in the world and if the company has genuine substance on the ground, taking into account the 50,000 euro deposit and social security contributions.
Conversely, expatriation often proves disappointing for an employee whose sector is absent from the Andorran market, or for someone travelling across the world every week. Our teams at Engage help you weigh this up before deciding: choice of residence permit, calculation of taxation on both sides of the border and timing of the move.
FAQ
What are the drawbacks of living in Andorra?
The main ones concern housing, which is scarce and expensive (4,416 euros per m² on average for an apartment in the first quarter of 2026), the cost of obtaining passive resident status (1 million euros of investment and 50,000 euros non-refundable since the 2/2026 law) and the absence of both a railway and a commercial airport. Added to this are the use of Catalan in administrative formalities and a narrow labour market.
Is Andorra a tax haven?
No. It applies the OECD transparency standards, automatically exchanges banking data with foreign authorities and has signed a tax treaty with France. Its taxation nevertheless remains low, with IRPF capped at 10%.
Do you need to speak Catalan to live in Andorra?
No, but the Catalan language remains an asset for integrating into local culture. Catalan alone has official status and most administrative procedures are conducted in Catalan, while residents widely understand French and Spanish in daily life.
What budget is required to live in Andorra?
Passive residence requires 1 million euros of investment and 50,000 euros non-refundable, increased by 12,000 euros per dependent. Housing must be added to this: a recent lease was signed at an average of 12.1 euros per m² per month in 2025, or around 1,090 euros for 90 m². A credit-financed purchase requires in practice a higher down payment for a non-resident.
