Traveling from Portugal to Andorra: The Complete Guide for 2026
Taxation, Passive Residency, Procedures, and Wealth Management Strategy
Background 2026: Portugal’s NHR program officially closed to new applicants on March 31, 2025. Its replacement, the IFICI, is reserved exclusively for qualified professionals in research and innovation. For entrepreneurs, investors, retirees, and annuitants living in Portugal, Andorra has now emerged as the leading tax alternative in Europe—with a personal income tax capped at 10%, no wealth tax, and no inheritance tax on direct descendants.
The Portuguese community is one of the largest in Andorra: approximately 14% of the Principality’s population is of Portuguese-speaking origin. This is no coincidence—Andorra and Portugal are bound by a double taxation treaty that has been in effect since April 2017, and Andorra’s legal framework is now one of the most stable in Europe for long-term tax expatriation. This guide explains everything in detail: the exact legal requirements, the steps to take on both sides, and the strategy to adopt based on your profile.
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Passive income, business formation, estate planning: every situation is different. Our experts analyze your situation and work with you to determine the most appropriate strategy.
Get a personalized analysisNHR program closed since March 2025
2017 bilateral tax treaty
10% corporate income tax · No net worth
Easier integration
Why leave Portugal for Andorra in 2026?
Portugal has long been viewed as an attractive tax destination thanks to the NHR program. This program will end on March 31, 2025. Its successor, the IFICI (Incentivo Fiscal à Investigação Científica e Inovação), targets only highly qualified professionals in research, technology, and innovation: individuals living off investment income, retirees, investors, and business executives are no longer eligible. For these individuals, Portugal now applies its standard progressive tax scale—with income tax rates of up to 48%.
In this context, Andorra has become the first serious alternative for high-net-worth individuals leaving Portugal. The comparison is clear: a marginal tax rate of 10% versus 48%, no inheritance tax on direct descendants, no wealth tax, and a permanent residency program—with no time limit, unlike all other special European programs, which expire after 10 years.
The Bilateral Tax Treaty Between Portugal and Andorra
The Principality and the Republic of Portugal signed a double taxation treaty on September 27, 2015, which entered into force on April 23, 2017. This agreement—identified by the reference number internacional-20161222a in Andorran legislation—defines the criteria for determining tax residency, establishes the framework for the treatment of dividends, interest, pensions, and employment income between the two countries, and guarantees legal recognition of the termination of Portuguese tax residency. Its existence provides a fundamental safeguard for any Portuguese national or former tax resident wishing to settle in Andorra.
Key legal point: Article 4 of the Portugal-Andorra Agreement defines the term “resident” as used in the treaty. To be eligible for the protection provided by the agreement, tax residency in Andorra must be effectively established—documented presence, permanent residence, and center of vital interests. A mere residence permit without any real substance is not sufficient.
Tax Comparison: Portugal vs. Andorra — 2026 Data
| Criterion | Portugal (general system) | ★ Andorra |
|---|---|---|
| Income Tax (IR) | Progressive tax scale: 14.5% to 48% | 0% up to €24,000 · 10% above that amount (flat rate) |
| Special plan available | IFICI only (R&D, tech, and innovation roles) — 20% flat, max 10 years | The Principality's Permanent Tax Regime — No Time Limit |
| Corporate tax | 21% (standard rate) | 10% (flat rate) |
| VAT / Indirect Tax | 23% (standard rate) | 4.5% (IGI) |
| Wealth tax | None | None |
| Inheritance tax (direct line) | Stamp tax — 10% on property located in Portugal | Full Exemption (Articles 5l and 5m of Law 5/2014) |
| Dividends from Local Companies | 28% (withholding tax) | Exempt if the company is a resident entity subject to Andorran corporate income tax (Art. 5j of Law 5/2014) |
| Capital gains on securities | 28% | Exonérées sous conditions (participation < 25 % ou détention > 10 ans) |
| Agreement with Portugal | — | Yes — signed in 2015, in effect since April 2017 |
| Minimum attendance required | 183 days/year | 90 days per year (residence without gainful employment) |
| Mandatory investment | None | €1,000,000 (general) or €400,000 through Fons d'Habitatge |
| Duration of the program | IFICI: Maximum of 10 years — general plan: permanent but unfavorable | Permanent — no limit |
| Retirees / Pension Income | Progressive tax bracket up to 48% — no more exemptions as of March 2025 | IRPF ≤ 10% — full exemption for amounts under €24,000 |
| Widow's/Disability Pensions | Taxed according to a tax scale | Exempt (Art. 5f, 5g, 5h of Law 5/2014) |
Data verified against the Andorran legislative corpus (Law 5/2014, Law 9/2012, 2016 International Convention). The “Andorra” column is highlighted because it corresponds to Engage’s area of expertise.
Residency in Andorra Without Engaging in Gainful Employment: Specific Requirements
For individuals leaving Portugal who do not engage in gainful employment in Andorra—such as annuitants, retirees, investors, and families with significant assets—the residence permit for non-gainful employment (formerly known as “passive residence”) is the appropriate status. It is governed by Law 9/2012 of May 31 (Articles 90 through 97, as consolidated) and its implementing regulation, Decree 407/2025 of November 12, 2025.
Terms of Access
The primary holder must: be of legal age; demonstrate sufficient financial resources to reside in Andorra for the entire duration of the permit (set by regulation at 300% of the Andorran minimum wage); have insurance covering health, disability, and old age; and provide proof of housing within the country.
Mandatory Investment — Legal Thresholds for 2026
The investment requirement is defined in Article 96 of Law 9/2012, as consolidated. There are three thresholds, depending on the nature of the investment:
| Type of investment | Minimum amount (by law) | Comments |
|---|---|---|
| A selection of Andorran assets (real estate > 800 k€ per unit, stocks, mutual funds, government bonds, life insurance) | 1,000,000 € | General Threshold — Permanent and Effective Amount |
| Investment in the Fons d'Habitatge (social housing fund) | €400,000 | Reduced threshold — indirect investment in compliance with the fund's regulations |
| Direct Real Estate Acquisition | At least €800,000 per unit | Applies if the investment consists entirely or partially of real estate (a single building) |
| Non-refundable deposit to the AFA | 50,000 € (primary policyholder) + 12,000 € per dependent | Required in all cases — paid to the Andorran Financial Authority; non-refundable |
Important: The investment of €1,000,000 (or €400,000 through the Fons d'Habitatge) is not an expense—it is an investment in Andorran assets that generate a return. The only expense that is definitively incurred is the non-refundable deposit of €50,000 paid to the AFA.
Attendance Requirements
Holders of a non-gainful residence permit must demonstrate a minimum of 90 days of physical presence in Andorra per year. This is the lowest residency requirement in Europe among destinations with comparable tax systems: Monaco requires 183 days, as does Portugal (ordinary residence). This flexibility is crucial for active and internationally-minded individuals.
Andorran Personal Income Tax — How Individual Taxation Works
Andorran personal income tax (IRPF), codified by Law 5/2014 of April 24 in its consolidated version, operates on a radically simpler basis than the Portuguese tax system: a flat rate of 10%, applied after deducting a personal exemption of €24,000.
Tax Structure
The tax rate is set at 10% (Article 43). It is applied to the taxable base, which is the tax base reduced by personal and family allowances. The basic allowance is the personal exemption of €24,000 per taxpayer (Article 35). In practice: a taxpayer with an annual income of €80,000 pays 10% on €56,000—or €5,600 in taxes—compared to the Portuguese tax system, which would have levied approximately €30,000 on the same income.
Major Exemptions for Wealth Profiles
Article 5 of Law 5/2014 lists the types of income that are fully exempt. The most significant for residents from Portugal are: dividends paid by Andorran companies subject to Andorran corporate income tax (letter j), capital gains on the transfer of securities for holdings of less than 25% or held for more than 10 years (letter k), gains frominter vivos transfers and inheritances (subparagraphs l and m), widow’s and disability pensions paid by an Andorran public entity (subparagraphs g and h), and capital gains on the primary residence in the event of reinvestment in Andorra (subparagraph r).
Rendes de l'estalvi — income from capital
Income from financial assets (interest, certain dividends) constitutes the “tax base for savings,” which is reduced by an additional tax-exempt threshold of €3,000 (Article 37) and then taxed at the same rate of 10%.
| Type of income | Portugal (post-NHR) | Andorra (Personal Income Tax) |
|---|---|---|
| Salary / Fees | Up to 48% (progressive scale) | 10% on amounts over 24,000 € |
| Retirement Pension | Progressive scale (no exemptions) | 10% on amounts over 24,000 € |
| Dividends from Local Companies | 28% flat | Exempt (Art. 5j) |
| Interest and Financial Income | 28% | 10% after a deduction of 3,000 € |
| Capital Gains on Real Estate (Primary Residence) | Taxed according to a tax scale | Exempt with reinvestment in Andorra (Art. 5r) |
| Inheritance / Gift from a Lineal Descendant | 10% stamp tax on PT property | Full Exemption (Art. 5l & 5m) |
Sofia, 52 — business owner in Lisbon, relocating to Andorra
Since 2018, Sofia has been running a digital transformation consulting firm based in Portugal. Having returned from an NHR program that had expired, she finds herself subject to Portugal’s progressive tax scale on her dividends and fees in 2025. She plans to move to Andorra without severing her professional ties with the Iberian Peninsula.
“I had thought that the closure of the NHR meant I was stuck with a punitive tax regime. Engage showed me that Andorra offers much more than just a temporary special tax regime: a permanent tax system, a solid treaty framework with Portugal, and a quality of life I never could have imagined.”
Sofia, a resident of Andorra since January 2026
Steps to Leave Portugal and Move to Andorra
The tax and administrative transition between Portugal and Andorra involves two simultaneous steps: formally terminating Portuguese tax residency and applying for Andorran residency. These two processes must be coordinated—completing one without the other exposes the individual to residual double taxation.
Tax Audit in Portugal
Analyze residual tax exposure: real estate in Portugal, equity interests in Portuguese companies, bank accounts, pension benefits, and insurance policies. Identify which income will remain taxable in Portugal despite the move (income from Portuguese sources, according to the bilateral treaty) and which will fall under Andorran jurisdiction.
Choosing Andorran Residency Status
Residency without gainful employment (investment of €400,000 through Fons d'Habitatge or €1,000,000 in various assets, minimum presence of 90 days per year); residency for professionals with an international focus (85% of income generated outside Andorra, 90 days of presence per year); or active residency through the establishment of an Andorran company. Each status corresponds to a different profile.
Wealth and Corporate Structuring
Decide on the future of the equity interests held in Portuguese companies—whether to retain them, sell them, or contribute them to an Andorran holding company. Identify the optimal structure for future cash flows: an Andorran SL, a family trust, or a holding company. Align the structures with the provisions of the Portugal-Andorra tax treaty to avoid any residual withholding tax.
Tax Departure Declaration in Portugal
Formally notifythe Autoridade Tributária e Aduaneira (AT) of the change in tax residence. Declare your Andorran residence as your replacement residence. This declaration—made using the form to deregister from the Portuguese tax registry—is mandatory to trigger the provisions of the bilateral treaty and avoid any double taxation not covered by the treaty. Keep all supporting documents related to this procedure.
Preparing the Application for Andorran Residency
Obtain a criminal record with an apostille in Catalan or Spanish, proof of financial means (300% of the Andorran minimum wage), health insurance valid in Andorra, and proof of residence in the country. Make the required investment within 6 months of receiving approval from the Servei d'Immigració. Deposit €50,000 with the AFA.
Opening a Bank Account in Andorra
Andorran banks (Creand, Andbank, MoraBanc) conduct rigorous due diligence on the source of funds. A complete set of documents proving the source of funds—including Portuguese income records, asset transfer deeds, and tax returns—is essential. Opening an account is often contingent upon making the required investment.
Deregistration from Portuguese Social Security Agencies
Termination or transfer of enrollment in the Portuguese Social Security system. The bilateral social security agreement between Portugal and Andorra (in effect since 1988) may allow for the partial recognition of benefits accrued in Portugal. Enrollment in the Andorran CASS upon obtaining a work residence permit, or purchase of private insurance for residents who are not employed.
Reverse Planning — From Portugal to Andorra in 8 to 12 months
Comprehensive tax audit of the situation in Portugal. Determination of the appropriate Andorran residency status. Initiation of real estate searches or identification of assets eligible for the mandatory investment. Engage mandates.
Preparation of the Andorran residency application. Obtaining an apostilled criminal record and translated Portuguese documents. Initiating the process to open an Andorran bank account, including documentation regarding the source of funds.
Submission of a tax departure declaration to the Portuguese Tax Authority. Signing of the preliminary sales agreement or identification of the Andorran investment vehicle. Submission of the residency application to the Andorran Immigration Service.
Agreement in principle from the Servei d'Immigració. Payment of €50,000 to the AFA. Physical relocation to Andorra. Establishment of permanent residence. Registration with the Comú of the chosen parish.
Completion of the required investment (legal deadline of 6 months after approval, extendable to 12 months upon justification). Submission of proof of investment to the Servei d'Immigració. Obtaining the Andorran NRT.
Filing of the first Andorran income tax return. Final settlement of remaining tax obligations in Portugal. Renewal of the Andorran permit (first renewal after 2 years).
Which type of person benefits most from the transition from Portugal to Andorra?
Entrepreneur / Business Owner
IS 10% · IR 10% maxEstablishment of an Andorran limited liability company (SL) serving as a holding company at the top of an international structure. The 10% corporate income tax rate, with no minimum substance requirement, offers a favorable alternative to the Portuguese tax system, with the bilateral treaty ensuring the security of cross-border flows between the two countries.
Investor / Wealth Manager
Tax-Exempt Dividends · 0% Inheritance TaxTax-exempt dividends from Andorran companies. Tax-free inheritance in the direct line of descent. No wealth tax. Those who previously benefited from Portugal’s NHR now find a permanent solution in Andorra with no time limit.
Retiree / Real Estate Assets
10% pensions · €24,000 tax-exemptClosure of the NHR: Foreign pensions are now taxed according to the Portuguese progressive tax scale (up to 48%). In Andorra, they are subject to a personal exemption of €24,000 and a flat rate of 10% on amounts above that threshold—permanently.
Family with school-age children
Trilingual · Safety · Quality of LifeTrilingual education (Catalan, Spanish, French), virtually no crime, and an alpine lifestyle. Tax deductions for dependents (€1,000 per dependent child) complement the personal tax benefits.
Digital nomad / international service provider
90 days/year · International screeningThe residency program for professionals with an international focus—available to individuals who generate 85% of their income outside of Andorra—offers the same tax benefits as the standard residency program, with a requirement of only 90 days of presence per year.
IFICI Profiles at the End of the Program
10-Year ForecastCurrent IFICI beneficiaries (or the most recent NHR beneficiaries) should plan ahead for their exit from the program. Andorra is the natural destination after leaving the IFICI—with no time limit and a more favorable tax regime than the standard tax schedule.
Mistakes to Avoid When Traveling from Portugal to Andorra
Changing your mailing address is not enough to terminate your Portuguese tax residency. Without a formal declaration of departure filed with the AT, Portugal will continue to consider you a tax resident. The bilateral agreement applies only once your Andorran residency has been officially established and your departure from Portugal has been declared.
The processing time for the Andorran Immigration Service is 2 to 4 months after submitting a complete application. In addition, you’ll need to prepare the required documents (apostilled criminal record, insurance, proof of housing), open a bank account (4 to 8 weeks), and make the investment. Allow 8 to 12 months in total—planning ahead is essential to avoid any tax gap.
The €400,000 threshold applies only to investments in the Andorran Fons d'Habitatge, not to real estate in general. A direct real estate purchase outside of this fund is subject to the general threshold of €1,000,000, with a minimum value of €800,000 per unit purchased. Confusing these thresholds will result in an incomplete application and a denial of the permit.
Andorran banks enforce strict KYC (Know Your Customer) procedures, particularly with regard to funds originating from Portugal or other EU member states subject to anti-money laundering directives. An incomplete set of documents regarding the source of funds—such as missing tax returns, sale agreements, or account history—may prevent the opening of an account and thus delay the completion of the required investment.
Even after establishing residency in Andorra, certain types of income remain taxable in Portugal under the bilateral tax treaty—specifically, rental income from real estate located in Portugal, royalties of Portuguese source, and dividends from companies whose business is primarily conducted in Portugal. Ignoring these rules exposes you to tax assessments on both sides.
The closure of the Portuguese NHR has significantly accelerated the number of residency applications from Portugal to Andorra. Our team supports these transitions from the very beginning—termination of Portuguese tax residency, wealth structuring, residency applications, opening bank accounts, and filing personal income tax returns. The Principality offers what no special tax regime can promise: a permanent tax system with no time limit and no announced reforms.
Ready to leave Portugal for Andorra?
Passive residency, business formation, estate planning, tax coordination with Portugal: every case is unique. Our Engage experts analyze your situation and work with you to develop the most appropriate strategy.
Schedule an appointment with an expertFAQ — Traveling from Portugal to Andorra
Do Portuguese nationals need a visa to settle in Andorra?
No. No visa is required to enter Andorra from Portugal—the Principality has free movement agreements with Spain and France, which border it. However, an Andorran residence permit is required for anyone planning to settle permanently, as Andorra is not a member of the European Union and does not recognize the free movement of EU citizens. This permit must be applied for through the Servei d'Immigració and is not granted automatically.
What is the actual minimum investment required to obtain passive residency in Andorra in 2026?
According to Article 96 of Law 9/2012, as consolidated, the general threshold is €1,000,000 in Andorran assets. This threshold is reduced to €400,000 only for an investment in the Andorran Housing Fund. In the case of a direct real estate purchase, each property must be valued at more than €800,000. In addition, in all cases, a non-refundable deposit of €50,000 must be paid to the Andorran Financial Authority. The primary investment must be in income-generating assets, not a consumptive expense.
Does the tax treaty between Portugal and Andorra really provide protection in the event of an audit by the Autoridade Tributária?
Yes, provided that the Andorran residence is genuine and documented. The agreement signed in 2015 and in effect since April 2017 defines the criteria for tax residency (domicile, habitual residence, center of vital interests) in Article 4. It provides for a procedure for the amicable resolution of disputes between the tax authorities of the two countries. An Andorran resident who holds a valid permit, has permanent housing in Andorra, and can prove 90 days of presence is entitled to invoke the treaty to avoid any residual Portuguese taxation on their non-Portuguese income.
What happens to real estate owned in Portugal after relocating to Andorra?
Rental income from real estate located in Portugal remains taxable in Portugal, in accordance with the bilateral treaty (the article on real estate income, which assigns the right of taxation to the country where the property is located). However, once Andorran residency has been established, any capital gains on these properties may be treated differently depending on the length of ownership and the provisions of the treaty. A case-by-case analysis is essential before any sale.
Can the NHR and the IFICI coexist with Andorran residency?
No, by definition. Residency in Andorra terminates tax residency in Portugal. A current beneficiary of the IFICI who moves to Andorra ceases to be eligible for the Portuguese system once they are no longer a tax resident of Portugal. This transition must be planned—ideally by coordinating the exit from the IFICI system with the establishment of Andorran residency to avoid any tax gap or overlap.
Can you keep a bank account in Portugal after moving to Andorra?
Yes. There is no legal prohibition against keeping a bank account in Portugal after moving away. However, you are required to notify your bank of your change in tax residence—banks have international reporting obligations (DAC2/CRS) and need to know in which country to report interest or income from the account. Failing to make this declaration may lead to complications with the tax authorities in both countries.
Is Andorra part of the Schengen Area? Can people travel freely to Portugal?
Andorra is not a member of the Schengen Area. However, it has border cooperation agreements with Spain and France that make crossing land borders very smooth for residents in good standing. Travel to Portugal is unrestricted via Spain or France, with no Schengen internal border controls. There are no direct flights between Andorra and Portugal, but there are regular and frequent flights between Barcelona and Lisbon or Barcelona and Porto.
