Moving from Malta to Andorra: The Complete Guide for 2026
Taxation, Residency, Procedures, and a Comparison of Non-Dom vs. IRPF
Key Point 2026: Andorra and Malta have signed a bilateral tax treaty that entered into force in 2017. Andorran residency is therefore fully enforceable against the Maltese tax authorities. There is no legal vacuum in the transition—but it requires a formal and documented severance of Maltese tax residency before claiming Andorran residency.
You are a resident of Malta under the Non-Domiciled regime. This framework suited you for a while, but its limitations are becoming apparent: a minimum tax rate of 15% on repatriated income, increasing administrative complexity, and regulatory pressure from the European Union. Andorra offers something different—a permanent tax regime with no time limit, a flat 10% tax rate on income, and a requirement of only 90 days of annual presence for passive residency. This guide provides a detailed comparison of the two destinations and outlines the practical steps you need to take to successfully relocate.
Your move from Malta warrants a preliminary review
Properly severing ties to Malta, structuring your tax transition, and planning for reporting requirements: each step determines the next. Our experts will guide you every step of the way.
Talk to an Engage expertEU Member · CRS Exchange
: 90 days/year · Permanent residency
,183 days/year · Starting at €3,000 in capital
(or 400 k€ through Fons Habitatge)
Why Maltese Residents Are Considering Andorra in 2026
The Maltese Non-Dom regime has long been touted as an ideal solution for entrepreneurs and investors seeking to establish a closer presence in Europe while minimizing their tax burden. In practice, however, its structural limitations are becoming increasingly apparent.
The Practical Limitations of the Non-Dom Status in Malta
The remittance basis principle—taxing only income actually repatriated to Malta—requires rigorous and ongoing management of cash flows. The 15% tax rate on repatriated foreign income, with a non-reducible minimum of €15,000 per year, represents a fixed threshold that is independent of the amount of income. At the same time, Malta’s membership in the European Union subjects it to the automatic exchange of tax information (CRS, DAC6), which significantly reduces the scope for tax planning compared to a non-EU jurisdiction.
Compliance costs are often underestimated during the initial setup: specialized tax consulting, cash flow accounting, banking due diligence, and ongoing regulatory oversight. All of this results in an effective rate that, in many cases, is no longer as competitive as what Andorra offers on a long-term basis.
What Makes Andorra Unique
Andorran personal income tax is capped at 10% (Llei 5/2014, Art. 43). Corporate income tax is set at 10% (Llei 95/2010, Art. 41). There is no wealth tax, no inheritance tax on direct descendants, and the IGI (local VAT) is 4.5%. And unlike Malta’s Non-Dom regime, these rules are not a temporary exception subject to the vagaries of European politics—they represent the permanent tax system of a sovereign state with a population of 77,000.
The bilateral tax treaty between Andorra and Malta (which entered into force in 2017) formally recognizes Andorran residency for the purposes of the Maltese tax authorities. This treaty framework offers a tangible advantage that ensures a smooth transition for Maltese residents, whereas other relocation scenarios may leave room for ambiguity.
Tax Comparison: Malta vs. Andorra—2026 Figures
| Criterion | Malta (Non-Dom) | ★ Andorra |
|---|---|---|
| Individual Income Tax | At least 15% (repatriated income) — annual minimum of €15,000 | Up to 10% (flat rate) — permanent, with no time limit |
| Corporate tax | 35% displayed — partially refundable depending on the plan | 10% — general rate (Law 95/2010) |
| VAT / Indirect Taxation | 18 % | 4.5% (IGI) |
| Dividends | Taxable Based on Structure | Exempt |
| Capital Gains on Real Estate | Taxable under certain conditions | Acquitted after 10 years in custody |
| Wealth tax | Does not exist | Does not exist |
| Inheritance tax for direct descendants | Partially Exempt | None |
| Duration of the favorable tax regime | Not defined — subject to EU reforms | Standing Committee — Structural Taxation of the State |
| Tax Treaty with Malta | — | Yes — signed, in effect since 2017 |
| Automatic Exchange of Information (CRS) | Yes — EU member | OECD-compliant — a regulatory framework distinct from that of the EU |
| Minimum attendance required | Substantive Criteria — Center of Vital Interests | 90 days/year (passive residency) — 183 days/year (active residency) |
| Required investment | None | €1,000,000 in Andorran assets (or €400,000 through Fons Habitatge) + €50,000 AFA deposit — passive residence only |
| Annual compliance costs | High-level — cash flow management, DAC6, specialized consulting | Minimum |
| Regulatory stability | Average — Increasing Regulatory Pressure in Europe | Very high — no major reforms since 2010 |
Data updated in June 2026. Sources: Law 5/2014 (personal income tax), Law 95/2010 (corporate income tax), Law 9/2012 (immigration), 2017 Andorra-Malta Tax Treaty.
The two routes to the Andorran residence from Malta
Law 9/2012 defines the conditions for foreigners to obtain residency in Andorra. There are two main pathways available to individuals from Malta: residency without gainful employment (known as “passive” residency) and active residency through the establishment of an Andorran company. The choice between the two depends on the nature of your activities, your residency requirements, and your financial structure.
Residence without gainful employment — passive residence
This is the natural choice for investors, annuitants, retirees, and high-net-worth individuals. Residents without gainful employment must reside in Andorra for at least 90 days per year and may not engage in any salaried professional activity within Andorran territory (Art. 95, Law 9/2012).
The investment requirement is set forth in Article 96 of the same law: a minimum of €1,000,000 in Andorran assets (real estate, equity interests in resident companies, Andorran debt instruments, life insurance products from Andorran entities, or non-interest-bearing deposits with the AFA). This amount is reduced to €400,000 if the investment is made through the Fons d’Habitatge. In the case of a direct real estate investment, each property must be valued at more than €800,000 per unit. In addition, a non-refundable deposit of €50,000 must be made with the AFA (Autoritat Financera Andorrana).
2026 Quota: Decree 74/2026 sets the number of residence permits for non-working residents available for the year 2026 at 163. This quota makes it essential to plan ahead—applications are accepted throughout the year, but spots are limited.
Active Residency — Setting Up an Andorran Company
For entrepreneurs and executives wishing to conduct business from Andorra, active residency is the appropriate route. This involves setting up an Andorran company (a limited liability company [SARL] with a minimum capital of €3,000, or a public limited company [SA] with a minimum capital of €60,000), enrolling in the CASS (Andorran social security system), and residing in the country for at least 183 days per year.
Active residency offers greater professional flexibility but requires a greater physical presence. However, it is the most direct route for professionals whose work is naturally based in Andorra and who wish to develop their operational structure there.
| Criterion | Active residence | Passive house |
|---|---|---|
| Required Professional Experience | Yes — Andorran company | No — wealth management available |
| Required Capital or Investment | Minimum corporate capital of 3,000 € | €1,000,000 in Andorran assets (or €400,000 in Fons Habitatge) + €50,000 in AFA |
| Minimum attendance per year | 183 days | 90 days |
| CASS Membership Required | Yes | No |
| Target profile | Entrepreneur, active executive | Investor, person living off investment income, retiree |
| Estimated processing time | 3 to 6 months | 2 to 4 months |
What kind of people are affected by the relocation from Malta to Andorra?
Private investor
→ Passive houseTax-exempt dividends, tax-exempt capital gains after 10 years, and no inheritance tax. The 10% personal income tax rate, compared to a minimum of 15% in Malta, results in immediate and permanent savings.
Digital Entrepreneur
→ Active residence10% Andorran corporate tax rate with no complex refund mechanism. Business conducted through an Andorran SL, 10% personal income tax, and no unnecessary compliance costs.
Retiree / High passive income
→ Passive houseThe €15,000-per-year threshold for Maltese non-domiciled taxpayers can place a disproportionate burden on those with modest incomes. Andorran income tax is proportional and capped at 10%.
Family with children
→ Active or passive residenceMaximum safety, trilingual education, mountains, and quality of life. Andorra is one of the safest destinations in the world, according to Numbeo's indices.
Holding Companies and Complex Structures
→ Active residence + holding companyAn Andorran SL can serve as a holding company for international investments. 10% withholding tax, tax-exempt dividends, and the Andorra-Malta treaty for residual income.
Digital nomad / remote work
→ International Project ResidencyThe "professional with international scope" status requires a minimum of 90 days per year of presence, with the majority of work performed outside Andorra. To be evaluated based on individual circumstances.
Case Study — Real-Life Fictional Profile
Kévin D., 41 — founder of a fintech company based in Valletta for the past four years
"My business is 100% digital. In Malta, I had to manage cash flows very carefully to repatriate only the bare minimum. It was stressful and expensive in terms of consulting fees. In Andorra, I have an SL, a 10% corporate tax rate, and I spend four months there each year. It’s simpler, more stable, and tax-wise, it’s just as good—if not better." — Kévin D., Engage client, relocated from Valletta to Andorra la Vella, 2025
How to Successfully Relocate from Malta to Andorra in 6 Steps
Audit of the Maltese Tax Situation
Analyze the specifics of your Non-Dom residency: repatriated vs. non-repatriated income, active corporate structures in Malta, ties to other jurisdictions, and assets held. Identify the risks of reclassification before taking any action. The Andorra-Malta treaty provides protection, but does not eliminate the need for a rigorous audit.
Choosing Andorran residency status
Passive residency (90 days/year, investment of 1 M€ or 400 k€ through Fons Habitatge), active residency (183 days/year, Andorran company), or residency for professionals with international operations (90 days/year, with business activities conducted primarily outside Andorra). Choosing the right status determines the entire structure.
Formally sever ties with Malta
Notify the Maltese authorities (Identity Malta, Commissioner for Revenue), close or transfer the legal entities domiciled in Malta, terminate the lease agreement if applicable, and compile a file documenting the termination of residency. Dual residency may result in reclassification by either of the authorities.
Wealth and Corporate Structuring in Andorra
Establishment of an Andorran limited liability company (SL) if necessary; opening a bank account (Andbank, MoraBanc, Creand); and organizing incoming income streams. For clients with an existing holding company, analyze the implications of the Andorra-Malta treaty on dividend distributions and passive income.
Make the required investment in Andorra
For the passive housing project: Make the investment of €1,000,000 (or €400,000 through Fons Habitatge) within 6 months of the approval decision. Prepare a thorough source-of-funds documentation package for Andorran banks—funds originating from Malta are subject to standard due diligence.
Submitting the application and obtaining the NIA
Application submitted to the Andorran Immigration Service. NIA (Administrative Identification Number) issued upon approval. Total processing time: 2 to 4 months for passive residency. Allow 8 to 12 months for a complete and secure transition from Malta.
Sample Reverse Schedule — Transition from Malta to Andorra Over 12 Months
Mistakes to Avoid When Relocating from Malta to Andorra
❌ Mistake 1 — Holding both residences
Tax residency is unique. Maintaining an active apartment in Malta, a lease agreement, or a primary bank account on the island without formally severing ties of residency can lead to double taxation or reclassification by the Maltese tax authorities. Each tie must be documented and severed.
❌ Mistake 2 — Underestimating the investment required for a passive house
The required investment amount (€1,000,000 or €400,000 through the Fons Habitatge) is set by law and is non-negotiable. Adding it late in the financial planning process can delay the entire project. This investment is an Andorran investment, not an expense—but it must be planned for early in the process.
❌ Mistake 3 — Ignoring the annual quota for passive residences
In 2026, 163 residence permits for non-working residents are available (Decree 74/2026). This quota may be exhausted during the year. Submitting your application early in the calendar year is not just a formality—it is an operational necessity.
❌ Mistake 4 — Failing to prepare a robust source-of-funds documentation package
Andorran banks conduct rigorous due diligence on incoming funds, particularly those originating in Malta (an EU jurisdiction with exposure to non-dom structures). Preparing comprehensive documentation regarding the source of the funds in advance significantly reduces the risk of the account being blocked during the account opening process.
❌ Mistake 5 — Failing to meet the 90-day requirement for actual attendance
Residence in Andorra must be actual, not merely declared. A minimum of 90 actual days, supported by documentation (bank statements, transportation tickets, various certificates), is the legal requirement for passive residence. If this requirement is not met, the authorization may be called into question at the time of renewal.
The Andorra-Malta Tax Treaty: An Often-Overlooked Advantage
The agreement between the Principality of Andorra and the Republic of Malta to avoid double taxation entered into force in 2017 (internacional-20170614a in the Andorran legal corpus). It covers income taxes and precisely defines the tax residency criteria applicable to individuals moving between the two countries.
In practice, this means that an Andorran resident who holds assets or receives income in Malta has a clear legal framework for determining in which jurisdiction that income is taxable. Dividends distributed by a Maltese company to an Andorran resident, income from Maltese real estate, and pensions paid from Malta—each type of income is subject to a specific treaty treatment that prevents double taxation.
This legal framework also provides protection for Andorran residents who must prove their residency to the Maltese authorities when their Non-Dom status is terminated: Andorran residency is formally enforceable, which is not the case for all non-EU destinations.
Cost of Living and Real Estate: Malta vs. Andorra by the Numbers
Relocating from Malta requires adjusting to the cost of living. Andorra is generally more expensive than Malta in certain areas—real estate in particular—but less expensive in terms of indirect taxes, which have a significant impact on daily living costs.
| Position | Malta | Andorra |
|---|---|---|
| Average real estate price | 3,500–4,000 €/m² | 4,000–5,000 €/m² (tight market) |
| VAT / Indirect Taxation | 18 % | 4.5% (IGI) |
| General price level | Moderate to high, depending on the area | About 15–20% higher than Malta |
| Transportation | International airport, direct connections to the EU | No airport — Barcelona 3 hours, Toulouse 2 hours 15 minutes |
| Security | Good | Among the best in the world (Numbeo) |
| Health | An Effective Public-Private System | CASS for Active Residents — Nostra Senyora de Meritxell Hospital |
| Natural Setting | Mediterranean island — sea, culture | Pyrenees — mountains, skiing, hiking, fresh air |
| Rental Market | Tense in Valletta | Very crowded in Andorra la Vella — Ordino or Canillo are more accessible |
The gross cost difference must always be considered in light of the tax savings achieved. For an investor with €500,000 in repatriated annual income, switching from Malta’s 15% Non-Dom tax rate to Andorra’s 10% personal income tax rate results in annual tax savings of €25,000—far exceeding any potential increase in living expenses.
We regularly assist Maltese residents whose Non-Dom status is coming to an end and who are seeking a more stable and transparent alternative. The Andorra-Malta tax treaty simplifies the legal transition. Our role is to maximize the value of this transition through wealth structuring, optimization of residency status, banking support, and post-relocation follow-up. Precision is our specialty.
Ready to leave Malta for Andorra?
Tax audits, choosing a legal structure, planning the transition, banking support, and submitting the residency application: our experts handle every step of the relocation process from Malta to Andorra.
Schedule an appointment with an Engage expertFAQ — Relocating from Malta to Andorra in 2026
Is it possible to retain one's Maltese non-dom status while moving to Andorra?
No. Tax residency is unique and is determined based on objective criteria—days spent in the country, location of the primary residence, and center of vital interests. Holding both statuses simultaneously exposes you to reclassification by either tax authority. The Andorra-Malta tax treaty helps clarify residency in the event of a conflict, but it does not replace the formal termination of Maltese Non-Dom status before claiming Andorran residency.
What is the minimum investment required to obtain passive residency in Andorra?
Article 96 of Law 9/2012 sets the minimum investment at €1,000,000 in Andorran assets (real estate, equity interests in resident companies, Andorran debt instruments, life insurance products, and deposits with the AFA). This amount is reduced to €400,000 if the investment is made through the Fons d'Habitatge. In the case of a direct real estate investment, each property must be valued at more than €800,000. In addition, a non-refundable deposit of €50,000 must be made with the AFA in all cases.
Does the Andorra-Malta tax treaty protect Maltese real estate income?
The bilateral treaty, which entered into force in 2017, clearly defines the treatment of real estate income from property located in Malta. As a general rule, real estate income is taxable in the country where the property is located—that is, in Malta. However, the treaty prevents double taxation by allowing the Maltese tax to be credited against Andorran personal income tax. Each situation must be analyzed based on the nature of the income in question.
How long should I expect the entire transition from Malta to take?
Between 8 and 12 months for a complete and secure transition. Terminating Maltese Non-Dom status requires 3 to 4 months of administrative preparation. Opening an Andorran bank account and conducting due diligence on the source of funds take 4 to 8 weeks. Submitting the passive residency application and its review take 2 to 4 months. The required investment in Andorra must be made within 6 months of a positive decision. Planning 12 months in advance is strongly recommended.
Is the Andorran personal income tax really capped at 10% with no conditions?
Yes. Article 43 of Law 5/2014 sets the personal income tax (IRPF) rate at 10%, regardless of tax bracket or type of income. This is a flat rate that applies to the net taxable income. It should be noted that a 50% tax credit is available on the general tax base (Art. 46) under certain circumstances—which can further reduce the effective tax rate. This regime is permanent, with no time limit and no minimum annual threshold comparable to the Maltese Non-Dom regime.
Are there any limits on the number of residence permits granted each year in Andorra?
Yes. Decree 74/2026 sets the number of residence permits for non-working residents available for 2026 at 163. This quota is spread out over the entire year and may be exhausted before the end of the year. For working residents (residence and self-employment), a separate quota is also set annually. It is strongly recommended that you submit your application early in the calendar year to maximize your chances of approval.
Is Andorran residency recognized by the Maltese government?
Yes, thanks to the bilateral treaty signed between the two countries, which entered into force in 2017. Andorran tax residency is enforceable against the Maltese tax authorities under the provisions of the treaty. This formal recognition sets Andorra apart from many non-EU destinations that do not benefit from this protective legal framework with respect to Malta.
