Immigration
April 27, 2026
Nestled between France and Spain in the heart of the Pyrenees, the Principality of Andorra attracts a growing number of expatriates each year. A favorable tax regime, an exceptional quality of life, safety, and high-quality public services: the reasons to settle there are numerous and concrete. But obtaining Andorran residency cannot be done on a whim. Immigration laws are specific, the financial requirements are substantial, and several recent legislative reforms have fundamentally changed the rules of the game, particularly regarding passive residency. This guide outlines all available residency statuses, the current requirements, the necessary steps to take, and the tax benefits you can expect.
The different types of housing in Andorra
Andorran law distinguishes between two main categories of residency, in addition to which there are sub-statuses tailored to specific situations. Choosing the right status affects not only your daily life in the Principality, but also your tax situation and administrative obligations.
Active Residency: Working and Starting a Business in Andorra
Active residency is intended for anyone wishing to pursue a professional activity in Andorra, whether that involves working as an employee for a local company or starting their own business. It is the most common status for working individuals who wish to settle permanently in the Principality.
Two main categories of individuals are eligible: employees with an employment contract with an Andorran company, and self-employed individuals or business owners who establish or take control of a company registered in Andorra. In the latter case, the shareholder must hold at least 34% of the share capital.
Residence without gainful employment (passive residence in the strict sense)
The non-working residency program is designed for individuals who wish to reside in Andorra without engaging in paid employment. It is primarily intended for retirees, investors, and individuals with sufficient income generated abroad.
Holders of this status may manage their assets in Andorra and serve as unpaid directors in companies in which they hold at least 50% of the shares. However, any paid professional activity within Andorran territory is prohibited.
Professional status with an international reach
This status, governed by Article 98 of Law 9/2012, applies to individuals whose professional base or headquarters is located in Andorra, but whose services are primarily intended for individuals or entities that are not residents of the Principality. The legal requirement is that at least 85% of the services provided must be used outside of Andorra.
Unlike the non-gainful residence status, this status expressly permits the pursuit of a paid professional activity from Andorra, provided that the 85% threshold is met. The holder may employ a maximum of one person on a salaried basis in connection with this activity.
Residency for scientific, cultural, or athletic purposes
This status, provided for in Article 100 of Law 9/2012, is reserved for individuals who have achieved international recognition in the fields of science, culture, or sports. It is granted by the Government, which has full discretion to determine whether such international recognition has been achieved.
Holders of this permit may continue to carry out their professional activities from Andorra, provided that at least 85% of their services are provided to non-Andorran residents. They may also manage their assets and serve as unpaid directors in companies in which they hold at least a 50% stake.
Other immigration permits
Andorran law also provides for other types of permits for specific situations: residence permits for family reunification, work permits for cross-border workers (for individuals who work in Andorra but spend the night outside the country), immigration permits for study, training, or research, as well as temporary permits for short-term assignments. These statuses are less commonly sought by expatriates looking to settle permanently.
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Requirements for obtaining active residency
To qualify for permanent residency, the applicant must meet a set of administrative, financial, and physical presence requirements.
With regard to the requirement for physical presence, the law distinguishes between different types of active licenses:
- For holders of a residence and work permit: permanent and actual residence is assessed at the time of renewal, with no legally defined minimum number of days required.
- For holders of a residence and self-employment permit (self-employed individuals, excluding licensed professions): the law expressly requires a minimum presence of 183 days per year (Article 58 ter of Law 9/2012).
For self-employed individuals, a deposit of €50,000 with the Andorran Financial Authority (AFA) is required at the time of filing the application. This amount is paid as a final, non-refundable fee once residency is granted, except in the event that the initial application is denied. An exception applies to entrepreneurs whose Andorran company is dedicated to promoting the digital economy, entrepreneurship, or innovation: they are exempt from this deposit under Law 42/2022 of December 1, 2022, on the digital economy, entrepreneurship, and innovation.
Please note: For self-employed residents, immigration authorities and the Ministry of Economy share data and conduct joint inspections during the 2- and 5-year renewal processes. Companies established solely for residential purposes, without substantial economic activity, are subject to particular scrutiny by the authorities.
Requirements for obtaining passive residence
The three categories of passive residency (residency without gainful employment, professionals with an international focus, and residents for scientific, cultural, or sporting reasons) all require a minimum stay of 90 days per year in the Principality, compared to at least 183 days for self-employed individuals with active residency.
Residency without gainful employment: financial requirements
This status imposes the most stringent financial requirements, in accordance with the provisions of Law 5/2025 of March 6, 2025 (which entered into force on April 17, 2025), as amended by Law 2/2026 of January 22, 2026 (Law on the Continuity and Consolidation of Measures for Sustainable Growth, published in the BOPA on February 12, 2026, effective February 13, 2026).
The minimum investment required in Andorran assets is now one million euros (€1,000,000). There are several options available:
- €1,000,000 in Andorran assets: financial instruments, equity interests in Andorran companies, Andorran debt instruments, life insurance products, or non-interest-bearing deposits with the AFA. For debt instruments or collective investment funds governed by Andorran law, a maximum period of 36 months applies, after which reallocation to other permanent assets is mandatory.
- €800,000 per property unit: when the investment is made entirely or partially in real estate, each property unit acquired must be valued at more than €800,000. This €800,000 threshold is a minimum per unit, not an overall threshold that would allow eligibility for the passive residence status for an amount less than €1,000,000.
- €400,000 only: if the entire principal amount is allocated to the Housing Fund (Fons d'Habitatge), an alternative option retained by the legislature.
Important: Under Law 2/2026 of January 22, 2026, the €50,000 deposit paid to the AFA is considered final and non-refundable once residency is granted, as is the €12,000 per dependent. The only exception is if the initial application is denied. Under the previous system (prior to Law 5/2025), this deposit was generally refunded upon departure from the Principality or in the event of non-renewal, but after deduction of AFA fees and any withholdings for breaches of obligations incurred in Andorra—the refund was therefore not automatically in full.
Professional status with an international reach and scientific/cultural/athletic status: specific application
These two residency statuses are subject to different financial rules than those applicable to residency without gainful employment in the strict sense. For residency status based on scientific, cultural, or sporting interests (Article 101 of Law 9/2012), the deposit required by the AFA is €47,500 for the principal applicant and €9,500 per dependent. These amounts are refundable in the event of departure or non-renewal, less AFA fees and deductions for any breaches.
Recent legislative reforms: Law 5/2025 and Law 2/2026
Two major pieces of legislation have fundamentally reshaped the residency framework in Andorra.
Law 5/2025 of March 6, 2025
Officially titled the Llei per al creixement sostenible i el dret a l'habitatge (Law on Sustainable Growth and the Right to Housing), this law took effect on April 17, 2025. It represents the first major reform of the framework governing passive residency and foreign investment in several years, notably setting an initial investment threshold of €600,000 and reforming the AFA deposit scheme.
Law 2/2026 of January 22, 2026
Law 2/2026, officially titled the Law on the Continuity and Consolidation of Measures for Sustainable Growth, published in the BOPA on February 12, 2026, and effective as of February 13, 2026, continued and strengthened these reforms. Its main provisions are as follows:
Passive housing: investment threshold raised to €1,000,000
The minimum investment threshold for residency without gainful employment increases from €600,000 (as set by Law 5/2025) to €1,000,000. A new category of eligible assets is introduced: debt or financial instruments issued by entities resident in Andorra, as well as collective investment funds governed by Andorran law, subject to the 36-month time limit described above.
The AFA deposit becomes final and non-refundable
Under Law 2/2026, the payment of €50,000 to the AFA is final and non-refundable for anyone who obtains residency, whether as a passive resident or a self-employed individual. The same applies to the €12,000 per dependent. These funds are allocated to social policies and housing. The only exception is if the initial application is denied.
Active residence: stricter checks on the actual work performed by self-employed individuals
The law strengthens oversight of the economic substance of business activities: invoicing, physical business premises, contracts, and employees. Immigration authorities and the Ministry of Economy now conduct joint inspections during renewal processes. Companies established solely for residency purposes, without substantial economic activity, are being targeted by lawmakers.
Foreign real estate development: general prohibition and exceptions
Law 5/2025 (Section 9) generally prohibits real estate development by foreign investors, defined as the acquisition or construction of buildings for the purpose of selling them. Two exceptions to this prohibition are provided for:
- Developments intended exclusively for the rental of housing as a primary and permanent residence, provided that at least 50% of the units are offered at affordable prices and that the rental status is maintained for a minimum of ten years.
- Classes located in parishes that have revised their land-use and urban planning plan (POUP) to align it with the findings of a study on the parish’s maximum carrying capacity, thereby ensuring sustainable development.
A new language requirement
Law 6/2024 of April 25, 2024, on the native and official language introduced a language requirement for holders of a residence and work permit (active employee permit). Its transitional provision specifies that until April 26, 2026, individuals applying for their first renewal were only required to demonstrate that they had completed Catalan language training, without having to provide proof of a certified level. As of April 26, 2026, proof of Catalan language proficiency at the A1 level becomes mandatory for the first renewal, and at the A2 level for the second. An extension to other permit categories (self-employed, cross-border, residence without work) is planned within a maximum of five years from the law’s entry into force (i.e., by 2029), subject to the adoption of the corresponding regulations by the Government.
Restructured Foreign Real Estate Taxation
Law 3/2024 of February 1, 2024, on the Foreign Real Estate Investment Tax (IEI), as clarified and supplemented by Law 5/2025, sets forth the following rates: 6% for a single-family home or an apartment with limited ancillary structures, and 10% for investments exceeding these thresholds. Furthermore, physical residents of Andorra who cannot demonstrate at least three years of actual residence during the preceding ten years (except in cases of study) are now considered foreign investors.
The steps: putting together your application and obtaining your residence card
Applications for a residence permit must be submitted to the Immigration Office of the Ministry of Foreign Affairs of Andorra. The application must be complete at the time of submission; otherwise, processing times may be significantly extended.
Documents common to all articles of incorporation
- Valid passport or ID card
- A clean criminal record from the country of origin or last place of residence
- Birth certificate and, if applicable, marriage certificate
- Medical certificate of good health
- Recent passport photos
- Proof of residence in Andorra
- Bank statements for the past six months
Documents specific to each status
Active residency for employees: an employment contract signed with an Andorran company, and proof of professional qualifications.
Self-employed resident: Articles of incorporation of the Andorran company, proof of a minimum 34% ownership stake, and proof of a €50,000 deposit with the AFA.
Residency without gainful employment: proof of investment (property deed, bank statement, or company shares), proof of a €50,000 deposit with the AFA, proof of social security and health insurance coverage, and proof of sufficient financial resources.
Deadlines
It generally takes between two and three months to process a complete application. Once granted, the residence permit must be renewed periodically, and the requirements regarding actual presence must be met at all times.
Andorran Taxation for Residents
Tax considerations are often what prompt people to consider moving to Andorra for tax reasons, and for good reason: the system is one of the most favorable in Europe for individuals, featuring a simple structure, a low tax rate, and several significant exemptions.
Personal Income Tax (PIT)
Established by Law 5/2014 of April 24, 2014, and effective as of the 2015 tax year, the IRPF applies to all Andorran tax residents, whether they are employees, self-employed individuals, or business executives. It features a single, flat rate of 10%, with no progressive tax brackets. Personal and family allowances can reduce the taxable base (contributions to pension funds, expenses related to the purchase of a primary residence, family expenses). The IRPF return must be filed between April 1 and September 30 of the year following the tax period.
To be considered an Andorran tax resident under Law 5/2014 (Article 8), a person must reside in Andorra for more than 183 days in a calendar year, or have the main center of their economic activities or interests there.
IGI: Andorra's equivalent of VAT
The General Indirect Tax (IGI) is the consumption tax applicable in Andorra. Its standard rate is 4.5%, well below the French VAT rate (20%) or the Spanish VAT rate (21%). This is one of the reasons why the cost of living in Andorra remains competitive.
Major tax exemptions and estate taxation
The Principality levies neither wealth tax nor inheritance tax. With regard to capital gains on real estate, it is important to be precise: they are indeed subject to taxation in Andorra, through two distinct mechanisms. On the one hand, capital gains from the transfer of Andorran real estate are taxable at 10% under the personal income tax (Article 27 bis of Law 5/2014), including indirect transfers via companies whose assets consist of more than 50% real estate. On the other hand, the tax on real estate transfers applies, with strictly defined exemptions (notably for the first purchase of a primary residence, subject to cumulative conditions regarding minimum residency duration, value limits, and income).
For individuals with substantial assets or those wishing to plan for the transfer of their estate, the absence of wealth tax and inheritance tax nevertheless represents a significant financial advantage that few European jurisdictions can still offer.
Please note: Changing your tax residence has implications in your country of origin. In France, in particular, exit tax laws apply to taxpayers who transfer their tax residence outside of France while holding certain assets. We strongly recommend that you discuss these matters with a specialized advisor.
The Benefits of Living in Andorra
Living in Andorra means enjoying a range of tangible benefits that go far beyond just tax advantages.
An exceptional living environment. The Principality offers a pristine, safe, and virtually pollution-free mountain setting. Its crime rate is among the lowest in Europe, and the quality of public services—particularly in the areas of healthcare and education—is high.
A moderate cost of living. Thanks to the 4.5% IGI tax, everyday consumer goods, gasoline, alcohol, and tobacco are significantly cheaper than in France or Spain. Real estate prices remain high in sought-after areas, but the absence of VAT on certain goods partially offsets this.
A strategic location. Andorra la Vella is less than three hours from Barcelona and Toulouse. Barcelona-El Prat and Toulouse-Blagnac airports are the nearest international gateways.
A robust banking system. The Andorran banking sector is regulated and stable. Several banks offer services tailored to expatriates and non-residents who wish to hold assets in the Principality.
A natural trilingual environment. Catalan is the official language, but French and Spanish are widely spoken in all institutions and businesses. This makes it easier for French speakers to integrate.
How do I obtain Andorran citizenship?
It is possible to obtain Andorran citizenship, but it requires a long-term personal commitment. The law provides for two main routes:
- The general route: 20 years of continuous and actual residence in the Principality (Article 11 of the Qualified Law on Nationality of October 5, 1995).
- The fast-track route: 10 years of residency for individuals who have completed their entire compulsory education at an Andorran school that includes subjects specific to the Andorran curriculum. This route constitutes a notable exception to the 20-year rule and can be particularly beneficial for families moving to Andorra with young children.
In both cases, applicants must take an integration exam on Andorran history, institutions, and geography, administered in Catalan. This exam requires thorough preparation.
Andorran citizenship cannot be held concurrently with any foreign citizenship: Andorran law requires the renunciation of all previous citizenships, regardless of which ones are involved (French, Spanish, Portuguese, British, etc.). This is a final decision that must be carefully considered.
In practice, the vast majority of expatriates do not aim to obtain Andorran citizenship. Tax residency alone is sufficient to enjoy all the tax benefits and the quality of life offered by the Principality.
Are you thinking of moving to Andorra?
It is still possible to obtain residency in Andorra, provided that you strictly comply with the current criteria and submit a strong application. Active residency for working professionals and entrepreneurs, non-working residency for investors and retirees, and professional status with an international focus for those whose work is oriented toward foreign markets: each status has its own financial and residency requirements, but all qualify for the sametax optimization benefitsin Andorra.
The reforms introduced by Law 5/2025 (effective since April 17, 2025) and Law 2/2026 (effective since February 13, 2026) have significantly tightened the eligibility requirements for passive residency: the minimum investment threshold has been raised to €1,000,000; deposits with the AFA are now non-refundable; foreign real estate development is generally prohibited except in strictly defined cases; and a Catalan language requirement applies starting with the first renewal on or after April 26, 2026. Applications submitted before these dates remain subject to the previous regulations.
For any new project, it is essential to incorporate these new requirements into your financial planning and to anticipate audits of your business’s financial viability if you choose the active residency option. Seeking professional guidance is no longer just a recommendation—it is a necessity to ensure the success of your application and avoid having your residency denied or revoked.
Free consultation · 30 min
Book your free strategic consultation
.
.
30 minutes to discuss your project in Andorra: tax matters, compliance, and setting up your business. Confidential and with no obligation.