There are various ways to settle in Andorra, but international investors generally have two main options: passive residency and active self-employed residency.
Which one you choose determines the level of investment required and the associated obligations, as well as how you will organise yourself once you’re in the country. Furthermore, as the requirements have recently changed, particularly for passive residency, it’s important to make the right choice from the outset to avoid unnecessary paperwork and mistakes.
This article explains the differences between the two options and the circumstances where one is preferable to the other.
Table of contents:
- The difference between passive and self-employed residency
Changes to residency in Andorra in 2026: what you need to know
The requirements for active self-employed residency in Andorra
The benefits of active residency in Andorra
Passive residency in Andorra: investment and tax optimisation
The benefits of passive residency in Andorra
How we can help you obtain residency in Andorra
The difference between passive and self-employed residency
The main difference is the nature of your relationship with Andorra.
Passive residency is designed for individuals who do not undertake any economic activity within the country. In other words, you establish your residence in Andorra, but your income comes from outside the Principality. In this scenario, your investment and your ability to support yourself without needing to work in Andorra will be taken into account.
By contrast, active self-employed residency requires you to conduct professional or business activity in the country. This involves setting up a business, engaging in genuine business activities, and organising your daily life around the project.
From this point onwards, everything changes: the initial investment, the obligations and how you use your residency.
Changes to residency in Andorra in 2026: what you need to know
In 2026, Andorra introduced a series of changes that directly impacted residency in the country. Their purpose was to respond to rising international demand, as well as to help the country transition to sustainable growth and preserve the housing market.
These changes to residency in Andorra are particularly important for foreign investors, as they affect both the entry requirements and the conditions for maintaining resident status. You can find all the changes to the Omnibus 2 Law here.
The requirements for active self-employed residency in Andorra
In order to obtain an active residency permit in Andorra and set up your own business in the country, you must demonstrate a genuine presence and direct involvement in the Andorran business community by meeting a series of legal, operational and financial requirements.
Actual residence in the country
Establish your main residence in Andorra and spend at least 183 days of the year in the country.
Incorporation of an Andorran company
Obtain prior authorisation for foreign investment and set up a company in Andorra in which you hold a significant stake (over 34%).
Involvement in business management
Hold a position on the board of directors of the incorporated company, which will ensure direct involvement in decision-making.
Genuine economic activity
Show that the company has a duly registered business that is actively operating within the Principality within a maximum of three months from the application.
Financial requirements for active residency in Andorra
From a financial perspective, you must also meet a key condition: making a mandatory non-refundable payment of €50,000 to the Andorran Financial Authority (AFA). Prior to the changes brought in by the Omnibus 2 Law, this contribution was refunded when the individual left the country, but it has now become a non-refundable payment.
The benefits of active residency in Andorra
Active residency in Andorra provides several benefits:
- A maximum corporation tax rate of 10%
- Low personal income tax rates, up to 10% for incomes of €40,000 or more
- IGI (Andorran VAT) of 4.5%
- Full access to the healthcare system
- Integration into the local economy
For international investors looking to do business in Europe, obtaining active residency in Andorra is a strategic option.
Passive residency in Andorra: investment and tax optimisation
You must meet a series of legal, financial and asset-related requirements to demonstrate your financial capacity. You must also make an effective investment in Andorra without carrying out professional activity in the country.
Requirements for passive residency in Andorra (updated in line with the new regulations)
Investment in Andorran assets (one of the following options)
A minimum investment of €1,000,000 in financial assets in Andorra.
Alternatively, an investment of €800,000 per unit in property.
Or, you can allocate €400,000 directly or indirectly to the Housing Fund, in accordance with current regulations.
Payment to the AFA
A non-refundable payment of €50,000 to the Andorran Financial Authority.
An additional €12,000 for each dependent.
Minimum residence in the country
Spend at least 90 days a year within Andorra.
Proof of financial solvency:
Demonstrate income or resources equivalent to more than 300% of the current annual minimum wage.
Add an extra 100% for each dependent.
Health cover
Hold valid private health insurance in Andorra.
The benefits of passive residency in Andorra
Passive residency in Andorra is ideal for those who do not require direct employment and are looking for a European base.
- No obligation to work in Andorra
- An attractive tax regime plus double taxation agreements with over 20 countries
- A flexible period of stay (only 90 days a year)
- A safe and stable environment
How we can help you obtain residency in Andorr
The regulatory framework in Andorra is constantly evolving, which makes it essential to have specialist advice to ensure a smooth, trouble-free process. At Advantia Assessors, we guide our clients through the entire Andorran residency process, providing a personalised service that complies with the latest regulations.
Services for active residency in Andorra
If you’re looking to start a business in Andorra or relocate one here, we can help you with:
- The incorporation of Andorran companies
- Applying for foreign investment authorisation
- The complete processing of an Andorran active residency permit
We ensure that your project meets all the legal requirements and has a solid foundation from day one.
Services for passive residency in Andorra
We offer the following to high-net-worth investors seeking tax optimisation:
- Advice on investments in the Principality
- Management of the application process for passive residency in Andorra
- Support with compliance with the financial requirements
Contact us and we’ll guide you through the entire process.