This article has been revised and updated in accordance with the latest amendments to Andorran regulations.
Updated August 2023.
Andorra offers two different types of residence permits: active residency (linked to a work permit in the principality) and tax residency (also known as passive residency).
In the last decade, the legislative evolution of Andorra in terms of tax matters has led to increased interest in obtaining tax residency in the country, especially among businesspeople, elite sportspersons and public figures. Acquiring a residence permit is essential for any foreigner who spends more than 90 days a year in Andorra.
Residency without lucrative activity in Andorra
Residency without lucrative activity in Andorra is one of the options for tax residency (residency without a work permit) offered by Andorra. This residence permit is designed for those who are not residents of Andorra but reside in the principality for more than 90 days a year without conducting any professional or work activity. However, the necessary activities for the management of an individual’s own assets are permitted. As are those that correspond to the individual as an administrator of the companies or own funds in which they have more than a 50% stake (as long as they do not receive any form of salary as an administrator).
Three requirements when applying for residency without lucrative activity
In addition to committing to residing in Andorra for more than 90 days a year, the main requirement is – within a maximum period of six months – making a permanent investment in Andorra of a minimum of €600,000 in one of the following assets:
– Real estate properties located in the country
– Shareholdings in companies in the principality, either shareholdings in the share capital or in own funds
– Debt or financial products issued by entities that are resident in the country
– Debt products issued by any of the Andorran public administrations
– Unpaid deposits in the AFA (Andorran Financial Authority, formerly known as the INAF)
As a minimum, it is essential that of the €600,000 required for investment, the holder of a residency without lucrative activity makes a deposit of €47,500 in the AFA, plus €9,500 for every dependant who also acquires non-lucrative residency. These deposits are returned to the holder in the event of cancellation or non-renewal of residency in the principality.
Applicants for tax residency must provide proof of income of at least 300% of the average annual minimum wage (currently €1,286.13/month). This rule also applies for each dependant but at a rate of 100%.
In addition to the residency without lucrative activity, Andorra offers other types of tax residencies: professional residencies with international projection, residencies for purposes of scientific, cultural and sporting interest and residencies for admission to nursing homes or medical-therapeutic treatment centres (both of a private nature).
At Advantia Assessors, we specialise in the management of procedures for obtaining tax residencies in Andorra. Once the situation of each person has been analysed individually, we propose the best option for acquiring passive residency in Andorra and perform the necessary steps to make it effective. Feel free to contact us for a no-obligation consultation!