Residence in Andorra: Requirements and tax residence
Andorra is a country with many advantage in multiple areas (Healthier, Taxation, Education) and for that reason since changed its strategy as a country in 2011 tens of thousands of people have decided to move their residence to Andorra.
For reside effectively in the Principality of Andorra you need to have a authorization or permission for this purpose. However, there are several types of Andorran residence permits, each with its rights and obligations, requirements, conditions, necessary documentation and procedures.
The purpose of this page is going to be exactly break down the different types of authorizations and indicate the typical cases in which said permits could be applied, summarizing and clarifying this issue so that it is easier to understand the process necessary to have residence in Andorra.
Update to 2024
It has already been approved, signed and ratified the Law 42/2022 of December 1 on the digital economy, entrepreneurship and innovation in which, among many other things, changes are made to immigration legislation. The most fundamental change in these amendments is the increase in the deposits required for passive or non-profit residence permits and for active residence and self-employment permits obtained through company incorporation (for entrepreneurs). You can see this law too on the page of the General Council Y in the BOPA, recently published.
These modifications arise from the measurements to alleviate what is considered a significant increase in housing prices, which is a problem for many Andorrans. This is part of the package of measures and directly affects foreign investment and new residents (Not those already established in Andorra). In this way, in the general case, the new passive residents will have to invest €600,000 in Andorran assets and the new entrepreneurs will have to pay a deposit of €50,000.
For this reason, currently and while the €50,000 deposit requirement lasts, the cheapest option to reside in Andorra is as a qualified professional, the way to set as autonomous or freelancer with university profession. Of course: for this it is necessary to have a university academic degree that allows you to practice liberally and a B2 degree in Catalan.
Finally, it is noteworthy that, due to the deployment of Law 42/2022 itself, those businessmen who demonstrate that the operations and activity of their company are of interest to the digital economy and innovation of Andorra can request the return of the €50,000 deposit after the fact (after having paid it). Furthermore, a still uncertain but interesting category of digital nomad in Andorra.
The 6 residence permits
There are roughly six residence permits in Andorra, although they are grouped into two clearly separate categories: active and passive. The difference between the two types of residence basically lies in the right to exercise professional activity of the active women.
Tax residence in Andorra
Obtaining Andorran residence allows a person to live in the country formally, but that does not imply that the person obtains tax residence to pay taxes in Andorra from their worldwide income. A person can have a residence permit in different countries during a tax year, but his tax residence is only in one country.
There are different criteria to determine in which country a natural or legal person is resident at the tax level, ordered in different priorities. In the event that a criterion is not clear or is not respected in any country, the following should be analyzed. The criteria follow the OECD model and are:
- A person is a tax resident in the state, territory or jurisdiction in which they stay more than 183 days
- If not, where the person has a permanent home
- If you do not have or have both, where you have the center of economic interests
- If it is not clear, where you have the center of vital interests (residence of your family nucleus)
- If it is not decisive either, assess where you usually spend the night
- Next, the criterion of nationality is used (residence in the country of which one is a national)
- Finally, in case of not applying any of the above, it is agreed by mutual agreement
Andorran active residence
It grants the right to effective residence in Andorra and work through the development of a work or professional activity. They all share the following requirements in common:
- Need for an employment contract in an Andorran company or foreign investment file
- Being over 18 years
- Do not present criminal or judicial records
- Pass a thorough medical exam
- Commit to reside at least 183 days in Andorra
- Possess an immigration authorization
- Register in the CASS (Caixa Andorrana de Seguretat Social)
- Change and approve the driving license before the Government Procedures Service and change the vehicle's registration within a maximum period of three months
Residence and work permit for others
This permission authorizes reside and work for others permanently and effectively in the country during the validity of the authorization.
- Take advantage of the statutory quota.
- Have an indefinite employment contract with a company legally incorporated in the country.
- Establish permanent and effective residence in Andorra.
May require, among others: passport, passport photograph, criminal record, document of accommodation and marital status, resume, extract of points of the CASS, common residence certificate and salary bulletins.
Active residence permit and self-employment
This permission authorizes reside and exercise an activity on their own in the country permanently during the validity of the authorization.
- Take advantage of the statutory quota.
- Exercise an activity on your own.
- Establish your residence permanently in the Principality of Andorra.
May require, among others: passport or DNI, passport photograph, criminal record, document of accommodation and marital status, CV, documentation for foreign investment or liberal professional, extract points from the CASS, certificate of residence of the Common.
It is important to remark that in case of a foreign investment (on establishing creating a company in Andorra) self-employed residents must make cash and deposit in the Andorran Financial Authority (AFA) the amount of fifty thousand euros (50,000 euros) without remuneration. On the other hand, freelancers or qualified professionals Andorrans are not required to pay this deposit. Later we explain more clearly the reason for the AFA deposit and its reasons.
Residence permit and temporary work
- exist different types of temporary permits.
- They allow to reside and work during the validity of the authorization.
- They are granted according to the established regulatory quotas to foreign persons who meet one of the following requirements:
- Have a temporary employment contract with a legally constituted company (generally winter or summer seasonal jobs).
- Have a authorization to study, carry out training practices, high-level sports training or research of a scientific or similar nature.
- Provide services to a person with Andorran nationality.
Passive residence in Andorra
It grants the right to reside effectively in Andorra without exercising any activity. This passive residence permit is somewhat special, since can be obtained in three different ways, each of them with its requirements, procedures, necessary documentation and extra obligations. The main and majority is the so-called "non-profit activity", and it is the one that we will deal with first. The passive residents they can request the passive residence of the people in their charge.
Authorizes reside in the country during the validity of the authorization without exercising any activity labor or professional.
- Benefit from the statutory quota
- Establish the primary and effective residence in Andorra for at least 90 days per calendar year without exercising any work or professional activity
Period and renewals
- Initial authorization and first renewal for two years
- Second renewal for three years
- Successive renewals for ten years except nationals of States with CDI with Andorra (*).
(*) Except residence for admission to geriatric centers or medical or therapeutic care centers, whose period is one year, renewable and renewable from year to year.
It may require, among others: passport or ID, passport photograph, criminal record, document of accommodation and marital status, curriculum vitae, prove annual income greater than 300% of the current annual minimum wage or certificate of residence of the Common.
In order to obtain the residence permit without work by this means, the applicant must demonstrate his commitment to the country, permanently and effectively. invest at least €600,000 in Andorran assets. Specifically in the following types of assets:
- Property located in the territory of the Principality of Andorra.
- Participations in the capital stock or in the equity of companies resident in the Principality of Andorra.
- Debt instruments or finances issued by entities resident in the Principality of Andorra.
- Public debt instruments issued by any public Administration of the Principality Andorra.
- Life insurance products contracted with entities resident in the Principality of Andorra.
- Deposits not paid to the Andorran Financial Authority (AFA).
There are a couple of extra notes in this regard:
- The first is that If the investment is made in real estate, it is required that at least one of the properties to be acquired has a value greater than €400,000.
- The second is that the amount required is reduced to €400,000 in the case of investing in the Housing Fund of the government, a fund created by the Andorran public administrations with the aim of financially endowing projects for the construction of subsidized housing.
However, the main holder must compulsorily make cash and deposit to the Andorran Financial Authority (AFA) the amount of 47,500 euros unpaid, as well as 9,500 euros unpaid for each of their dependents who acquire the status of resident without gainful activity (they can be dependents: the spouse, direct children and dependent ascendants over 65 years). Thus, the amounts of the AFA deposits are deducted from the corresponding amount to be invested.
Residence for professionals with international projection or scientific, cultural or sports interest
This permit authorizes to reside in the country during the validity of the authorization and also to carry out a professional activity provided that:
- The headquarters or base where the professional activity is carried out is located in the territory of the Principality of Andorra.
- The professional person with international projection has a maximum of one person hired in a labor regime.
- At least 85% of the services provided by the professional person are used in any other country or territory other than Andorran.
- Make cash and deposit the amount in the Andorran Financial Authority (AFA) of 47,500 euros plus 9,500 euros unpaid for each of the people in their charge.
- Accredit economic viability of the activity that it intends to carry out and demonstrate that this activity will generate sufficient economic resources that will allow both it and its dependents to reside in Andorra.
- Prove that you have a sufficient level of qualification and professional experience in the sector in which the activity is carried out or in the case of cultural, scientific or sports interest, provide a copy of any document that proves the amount of income derived, during the year prior to obtaining authorization, from the activity in which the authorization is framed.
Residence for admission to geriatric centers or medical or therapeutic care centers
Authorizes to reside in the country during the validity of the authorization in a private nursing home or private medical or therapeutic care facility for at least 90 days per calendar year, without exercising any work or professional activity.
Residence permits for regrouping
This permission the regrouped with a person of Andorran nationality or with the holder of a residence and work authorization authorizes to reside in Andorra (either on their own or someone else's), provided they reside in the country. They can request it, in accordance with current legislation:
- The spouse or the member of the stable couple union (if they are a registered domestic partner in Andorra).
- Your minor children and the minor children of the spouse have legal custody and custody.
- Their children of legal age, and the children of legal age of the spouse, in charge and those who exercise legal guardianship or who have under their protection in the framework of a similar institution.
- Dependent ascendants who are at least 65 years old or who are retired.
- Other persons who are said when the requesting person exercises legal guardianship or is under their protection within the framework of another similar institution recognized by the Andorran legal system and not contrary to national public order, provided that both parents have lost or their homeland has been extinguished power.
Since the changes in the Immigration Law of 2022, all nationalities will be able to regroup after three months of effective residence in Andorra. The definitive proof to accredit said effective residence is the contribution of three full monthly payments to social security. Therefore, obtaining residence by family reunification will mean an additional delay of 3-4 months in any establishment procedure in Andorra..
On the other hand, it is also required to certify economic solvency in order to carry out the regrouping. These certificates are issued by Andorran banking entities to demonstrate that there is economic capacity to support family reunification and require that the applicant have income equivalent to a percentage of the interprofessional minimum wage in force in the country. Since the changes with the approval of the Immigration Service Regulations of 2023Specifically, for each regrouped person, the following are required:
- for a adult: 100% of the interprofessional minimum wage (previously 70%)
- for a minor: 70% of the interprofessional minimum wage (previously 40%)
Ten-year period when the regrouping is with a person of Andorran nationality
With the holder of a residence and work authorization, it is delivered for an initial duration of one year, renewable three times for periods of two years and with subsequent renewals they are delivered for ten years (except for nationals of states with CDI) .
It may require, among others: passport or ID, passport photograph, criminal record, document of accommodation and marital status, document proving health insurance, documents proving the applicant's financial means and income (if you have ), documents proving the family bond with the person requesting and other documents.
How to process residence in Andorra?
At the moment to obtain to have a permission of residence in Andorra is a process that requires several procedures that can be streamlined with the help of a local advice. Depending on the type of residence, the procedures vary. In this article we will show in a table as an example the procedures for active residence as an employee.
Deposit at the AFA
Recently, the Andorran authorities ordered that for foreign investments (permission on own account as administrator of a company) and passive residences it is necessary to deposit as bail in the Andorran Financial Authority (AFA) a certain amount in euros.
The reason, whether well-founded or not and the excessive amount or not, was that previously there were incidents of false self-employed and people who left the country after residing leaving debts with the Andorran administrations. To mitigate this, they decided to make the payment of a bond mandatory as a demonstration that they really wanted to invest in the country and had a commitment to the Principality.
Although these amounts can be an obstacle for many people when deciding to invest and settle in Andorra, it must also be said that they recover fully without problems after terminating residence in the country, provided that one does not have debts with the administrations or mishaps of similar style.
Other residence permits
In addition to these main types (namely, residence and self-employment, residence without work and residence by regrouping) there are other types of specific permissions for certain groups. For example, permits for border workers, school personnel, for study and other reasons, temporary immigration (seasonal), etc. However, these types of permits are or quite similar to others (For example, the temporary immigration permit is very similar to that of residence and work for others) or very specific (frontier workers). So we do not treat them in depth.
As always, we finally remember that Abast is a specialized office in the establishment of people and businesses in the country. If you want to relocate your business or set up a new company and reside in Andorra, do not hesitate to contact us. You also should read who are we here.
Broadly speaking, there are residence and work permits (self-employed or employed), passive or non-profit residence without work, and residence for family reunification.
If you are exercising activity (residence and work) you must spend at least 183 days in the Principality. In the case of passive residence (without activity) it is enough to reside more than 90 days. More information here.
This bond was imposed to avoid debts with the Andorran public administrations, although it can be abusive. Self-employed residents pay €50,000, and passive residents €47,500 for the owner and €9,500 per dependent.
The residence permit for family reunification was made for this purpose. Under certain requirements, the entire family of a resident of Andorra can legally reside in the country.