News brief · Residency

Andorra: passive residence tightened by the Omnibus law

The principality has tightened the conditions for its residence without gainful activity. The scheme remains, but its entry cost and physical presence requirements now make it a relocation project, not a mere address.

By Editorial team · on May 14, 2026

What passive residence covers

Andorran residence without gainful activity is aimed at people who live on their wealth or on foreign income, and who do not carry on any professional activity in the principality.

It rests on three cumulative conditions: a non-refundable payment to the Andorran Financial Authority, an investment in the country, and proof of sufficient resources as well as health insurance coverage.

Since Law 2/2026 came into force on 13 February 2026, the main holder pays €50,000¹ to the Andorran Financial Authority, plus €12,000² per dependant. These sums are non-refundable: they are only reimbursed if the initial authorisation is refused.

The holder undertakes to be effectively present for at least 90 days³ a year. This obligation is a condition of renewal and is subject to checks.

The investment is required from €1,000,000⁴ in Andorran assets, or from €400,000⁵ if placed in the Housing Fund (Law 2/2026, in force since 13 February 2026). Applications submitted before 22 January 2026, the date the law was adopted, remain subject to the previous rules.

Why the principality is tightening the rules

Andorra is a small, mountainous territory whose capacity to accommodate newcomers is physically limited. The number of passive residence permits granted each year is capped, and raising the entry cost is one of the instruments of that limitation.

Pressure on housing there is real, and the local public debate on the presence of wealthy foreign residents has grown, as in other small, attractive jurisdictions.

The tightening is therefore not a technical adjustment: it is a deliberate immigration policy, and nothing suggests that it stops there.

For an applicant, the practical consequence is that one must reason on the conditions in force at the time of filing, not on those of documentation that is a few months old.

A second factor is external pressure. Andorra has concluded cooperation and information exchange agreements with the European Union, and is negotiating an association agreement. This trajectory implies regulatory convergence, and the policy for admitting wealthy residents is one of the points of attention.

The principality has also ended banking secrecy and takes part in the automatic exchange of information. What it offers today is light, transparent taxation, not a discretion that its law no longer allows.

What you get in return

Andorran personal income tax is capped at a rate of 10%⁶, with a relief below a threshold of €40,000⁷ on income from employment and economic activities.

Dividends from holdings in Andorran entities are not taxed, at a rate of 0%⁸, and corporate income tax is set at the general rate of 10%⁹.

The principality applies neither wealth tax nor inheritance or gift taxes. For passing on assets, this weighs more heavily in the long term than the income tax ceiling.

Andorran tax residence, by contrast, is acquired through a presence of more than 183 days¹⁰, or by having the centre of economic interests located in Andorra.

The gap between the 90 days³ that preserve the permit and the 183 days¹⁰ that trigger tax residence is the most misunderstood point of the Andorran file.

What to do

Check the conditions in force at the time of filing, as the scheme has been tightened.
Calculate the total cost: the non-refundable payment, and the return forgone on the investment.
Make sure you can meet the presence requirement of 90 days³, checked at renewal.
Genuinely move the centre of economic interests: contracts, clients, decisions.
Prepare for the exit tax, as Andorra is outside the European Economic Area: apply at least from 90 days¹¹ before the transfer.

For those who accept to genuinely live there, Andorra remains one of the lightest tax regimes in Western Europe, with a geographical proximity that few destinations offer. What fails there almost always has the same cause: a formal move without any actual relocation of one's life and activity — and that is precisely what the tightening aims to discourage.

Please note

General information, as of the date shown. A draft reform is not a rule in force: check the conditions with the authorities or a professional before deciding. Terms of use and disclaimers

Sources and verification dates

1.
Andorra — passive residence: definitive payment by the main holder to the AFA (Law 2/2026) : €50,000
« Efectuar un ingrés, a favor de l'Autoritat Financera Andorrana, en el mateix moment en què es presenta la sol·licitud d'autorització d'immigració, d'un import de cinquanta mil euros (50.000 €), el qual s'ingressa amb caràcter definitiu i no és reemborsable, llevat que l'autorització d'immigració inicial sigui denegada. »
Consell General del Principat d'Andorra, « Llei 2/2026, del 22 de gener, de continuïtat i consolidació de les mesures per al creixement sostenible (BOPA núm. 15, 12 de febrer del 2026) », Jan 22, 2026Verified on Nov 2, 2026Verified source
2.
Andorra — passive residence: definitive payment per dependant (Law 2/2026) : €12,000
« el titular principal també ha de fer un ingrés d'un import addicional de dotze mil euros (12.000 €) per a cadascuna de les persones al seu càrrec que adquireixin la condició de resident sense activitat lucrativa. […] L'import de cinquanta mil euros (50.000 €), corresponent a l'autorització del titular principal, i l'import de dotze mil euros (12.000 €), per a cada persona a càrrec, s'ingressen amb caràcter definitiu i no són reemborsables, llevat que l'autorització d'immigració inicial sigui denegada. »
Consell General del Principat d'Andorra, « Llei 2/2026, del 22 de gener, de continuïtat i consolidació de les mesures per al creixement sostenible (BOPA núm. 15, 12 de febrer del 2026) », Jan 22, 2026Verified on Nov 2, 2026Verified source
3.
Andorra: annual physical presence to which the holder of a residence without gainful activity commits : 90 days
« Estableixi la seva residència principal i efectiva al Principat d'Andorra durant almenys 90 dies per any natural. »
govern.adVerified on Nov 2, 2026Verified source
4.
Andorra — passive residence: minimum investment in Andorran assets (Law 2/2026) : €1,000,000
« El titular principal d'una residència sense activitat lucrativa ha d'invertir de forma permanent i efectiva una quantitat d'almenys un milió d'euros (1.000.000 €) en alguna o diverses de les tipologies d'actius que s'indiquen a continuació »
Consell General del Principat d'Andorra, « Llei 2/2026, del 22 de gener, de continuïtat i consolidació de les mesures per al creixement sostenible (BOPA núm. 15, 12 de febrer del 2026) », Jan 22, 2026Verified on Nov 2, 2026Verified source
5.
Andorra — passive residence: minimum investment in the Housing Fund (Law 2/2026) : €400,000
« aquesta quantitat queda reduïda a l'import de quatre-cents mil euros (400.000 €) sempre que la inversió es faci directament o indirectament i de forma permanent i efectiva en el Fons d'Habitatge »
Consell General del Principat d'Andorra, « Llei 2/2026, del 22 de gener, de continuïtat i consolidació de les mesures per al creixement sostenible (BOPA núm. 15, 12 de febrer del 2026) », Jan 22, 2026Verified on Nov 2, 2026Verified source
6.
Andorra: personal income tax rate : 10%
« Article 43. Tipus de gravamen — El tipus de gravamen de l'impost és el 10 per cent. — Llei 5/2014 de l'impost sobre la renda de les persones físiques, art. 43. Article 41 de la Llei 95/2010 de l'impost sobre societats : El tipus general de gravamen per als obligats tributaris d'aquest impost és del 10 per cent. »
portaljuridicandorra.adVerified on Nov 2, 2026Verified source
7.
Andorra: threshold for the reduction on income from employment, economic activities and real estate capital : €40,000
« Article 46. Bonificació per obtenció de rendes del treball, d'activitats econòmiques o del capital immobiliari — L'obligat tributari […] es dedueix de la quota de tributació una bonificació del 50 per cent de la quantitat que resulti d'aplicar el tipus de gravamen de l'impost sobre l'import de la base de tributació general […] minorada en la quantitat corresponent a la reducció prevista en el primer paràgraf de l'apartat 1 de l'article 35 […]. Aquesta bonificació no pot excedir la quantitat de 800 euros. — Llei 5/2014, art. 46. Le plafond de 800 € correspond à 5 % de 16 000 €, soit une base de 40 000 € (24 000 € exonérés + 16 000 €) : au-delà de 40 000 €, le taux plein de 10 % s'applique. »
portaljuridicandorra.adVerified on Nov 2, 2026Verified source
8.
Andorra: taxation of dividends from holdings in Andorran entities : 0%
« Article 5. Rendes exemptes — Estan exemptes de l'impost les rendes següents: […] j) Els dividends i altres rendiments derivats de la participació en el patrimoni net, a què es fa referència a l'apartat 1 de l'article 22, quan siguin satisfets per entitats residents fiscals a Andorra o per organismes d'inversió col·lectiva de dret andorrà sempre que estiguin subjectes a l'impost sobre societats andorrà. — Llei 5/2014 (IRPF), art. 5 j). »
portaljuridicandorra.adVerified on Nov 2, 2026Verified source
9.
Andorra: standard corporate income tax rate : 10%
« El tipus general de gravamen per als obligats tributaris d'aquest impost és del 10 per cent. »
portaljuridicandorra.adVerified on Nov 2, 2026Verified source
10.
Andorra: annual presence giving rise to tax residency : 183 days
« Que romanguin més de 183 dies, durant l'any natural, en el territori andorrà. Per determinar aquest període en territori andorrà es computen les absències esporàdiques, excepte que l'obligat tributari acrediti la seva residència fiscal en un altre país. »
portaljuridicandorra.adVerified on Nov 2, 2026Verified source
11.
France, exit tax: deadline before departure to file a request for deferral with guarantees : 90 days
« Pour les départs intervenus à compter du 22 novembre 2019, la demande doit être déposée au plus tard 90 jours avant le transfert du domicile fiscal hors de France. — Direction générale des finances publiques, impots.gouv.fr. »
impots.gouv.fr