Moving to Andorra in 2026: income tax capped at 10%, residence and the Pyrenean setting

Andorra is not a tax-free territory: it is a low-tax territory, which is different and can be verified from the texts themselves. Personal income tax was introduced there by Law 5/2014.

Persons who stay in Andorran territory for more than 183 days² in the calendar year, or who have the main centre of their activities or economic interests there, are considered tax residents. The criteria are alternative.

The tax rate is single: 10%³. It applies after reductions, including a reduction for the personal minimum which in practice exempts modest incomes.

A bonus also applies to employment income, income from economic activities and income from immovable capital, built around a threshold of €40,000⁴.

Capital income

Dividends and other returns on holdings in Andorran entities are exempt: Article 5 of the law lists them among exempt income, at a rate of 0%⁵. Corporate income tax is set at the general rate of 10%⁶.

The architecture is therefore coherent: a moderate rate on income, a company taxed at the same level, and a dividend distribution that does not bear a second layer of tax. For a company director, it is the whole picture that matters, not just the headline rate.

We do not publish the capital gains scale, nor the Andorran inheritance and gift regime: they do not appear in the extracts of texts available to us.

This coherence has a counterpart that must be weighed. A low single rate comes with a broad tax base: few tax niches, few deferral mechanisms, little room for optimisation once settled. The advantage lies at the outset, in the decision to relocate, not in annual management.

As Andorra belongs neither to the European Union nor to the Schengen area, a French national has no automatic right of residence there. Everyone is subject to Andorran immigration law, and this is a major difference from other European destinations.

Residence without gainful activity

This is the route for retirees and people living on their assets. It involves two separate financial commitments, set out in Article 96 of the immigration law: an investment in Andorran assets, and a payment to the financial authority.

Since Law 2/2026, for applications submitted from 22 January 2026, the main holder pays €50,000⁷ to the Andorran Financial Authority, and €12,000⁸ per dependant. This payment is final and non-refundable, except if the initial authorisation is refused: it must be treated as an entry cost, not as a tied-up sum. The refundable deposit of the former regime now applies only to earlier applications.

The same law sets the permanent investment in Andorran assets — notably real estate, holdings in Andorran companies, Andorran securities and funds, public debt and life insurance — at a minimum of from €1,000,000⁹, a amount reduced to from €400,000¹⁰ when the investment is made in the Housing Fund. Along with the payment, this is the main item in the file; the eligibility of the chosen assets should be confirmed with the immigration department before any commitment.

There is also an effective presence requirement: the applicant undertakes to establish their residence in Andorra for at least 90 days¹¹ per calendar year. This threshold is not that of tax residence — it is far below it — and confusing the two is the costliest mistake in an Andorran file.

An active residence, open to anyone who carries out an activity or manages an Andorran company, is subject to different conditions, notably regarding shareholding and quotas.

One last element distinguishes Andorra from its neighbours: the number of permits issued for residence without gainful activity is limited, and the country pursues a policy of selection rather than volume. A complete and fundable file therefore does not, on its own, guarantee issuance within a given timeframe.

Acquisition by a non-resident is subject to prior administrative authorisation. This is not a mere formality: it conditions the transaction and forms part of a land-control policy specific to a small territory.

The housing stock is limited by geography — narrow valleys, little buildable land — and foreign demand has created lasting pressure. The constraint is not cyclical: it is physical.

Real estate can also serve as the vehicle for the investment required for residence without gainful activity, which ties the residence file to the wealth file. A property acquired to meet an immigration condition cannot be resold with the same freedom as an ordinary investment.

We do not publish Andorran transfer taxes, nor local property-holding taxation: they do not appear in the sources we were able to consult.

Andorra combines low taxation with a cost of living that is not low. Housing is the dominant item, owing to the combined effect of land scarcity and demand from foreign residents.

We do not publish a typical monthly budget: we have not found an official Andorran series measuring a basket of expenses comparable to that of an expatriate.

Three items shape a budget. Housing, already mentioned. The car, indispensable in a mountain territory where distances are measured in elevation as much as in kilometres. And healthcare, organised around an insurance system to which residents contribute, with out-of-pocket costs to be anticipated.

Conversely, indirect taxation is low, which is visible on consumer goods and fuel — this is the historical origin of Andorran retail trade. The difference therefore favours those who consume locally and works against those who must find housing.

1. Choose the route — residence without gainful activity, or active residence — since the financial conditions and presence obligations differ;
2. have the immigration department confirm that the assets chosen for the required investment are accepted, an indispensable step before any costing;
3. make the payment to the Andorran financial authority, building it into the budget as a sum permanently acquired by the State;
4. obtain the prior authorisation if the transaction involves a property acquisition by a non-resident;
5. organise effective presence, at least at the level of the commitment made, and document it year by year.

The order matters: the investment amount drives the overall costing, and the acquisition authorisation determines the property timetable. Entering into a preliminary sale agreement before settling these two points risks a delay that is hard to make up.

We do not publish processing times: we have no official, dated and quantified source for Andorran immigration authorisations.

• The presence commitment of 90 days¹¹ per year is a condition of the residence permit. It is not enough to establish Andorran tax residence, which requires more than 183 days² or the centre of economic interests.
• This gap is the main trap: a resident who complies with their immigration commitment without genuinely transferring their centre of interests may remain domiciled in France.
• The payment to the financial authority has been final since Law 2/2026, non-refundable except if the initial authorisation is refused, and is in addition to the required investment.
• Andorra is neither in the European Union nor in Schengen: the rights attached to European citizenship cannot be exercised there, and travel to the Schengen area follows its own rules.
• The Andorran passport gives about 171¹² visa-free access, but naturalisation there is lengthy and demanding.

Finally, within a decade Andorra has gone from an almost total absence of direct taxation to a complete tax system, with information exchange and treaties. Reasoning from the territory's reputation rather than its positive law leads to considerable errors of judgement — in either direction.

For a French national, the decisive question remains the centre of economic interests. A company director who keeps most of his or her income tied to a French activity meets one of the criteria of Article 4 B of the French General Tax Code (code général des impôts), and Andorra's geographic proximity makes this situation common. Distance offers no protection; what matters is where the income is tied.