News brief · Taxation
Andorra: the entry cost of passive residency has been raised
The entry cost of Andorran residency without gainful activity combines a non-refundable payment to the Andorran Financial Authority with an investment in the country. Raising it changes the calculation, not the nature of the scheme.
By Editorial team · on July 23, 2026
What passive residency covers
Andorran residency without gainful activity is intended for people who live on their assets or on foreign income and who do not carry on any professional activity in Andorra.
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 together with health cover.
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 dependent. These sums are non-refundable: they are returned only if the initial authorisation is refused.
The holder also undertakes to be physically present for at least 90 days3 per year. This obligation is a condition of renewal and is subject to checks.
The investment is required at 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.
What the increase changes
Raising the entry cost changes the return on the scheme without changing its nature. It is therefore best approached in terms of opportunity cost: the sums tied up earn nothing, and this foregone income is added to the cost of living in Andorra.
This opportunity cost must then be compared with the expected tax saving. Andorran income tax is capped at 10%6, and dividends from Andorran shareholdings are not taxed, at a rate of 0%7.
For substantial assets or income, the calculation remains very favourable. For average incomes, the increase may tip the balance, all the more so as the principality is not cheap.
The scheme forms part of a deliberate policy: Andorra intentionally limits the number of passive residencies granted each year, and raising the entry cost is one of the instruments of that limit.
A point of method is worth making. The payment to the Financial Authority is a definitive expense. The investment, by contrast, remains an asset: its real cost is measured by the return you give up by placing it in the required assets rather than elsewhere, over the whole duration of the residency.
What to check before committing
- Distinguish passive residency from active residency, which presupposes an activity in Andorra and is subject to other conditions.
- Work out the total cost: the non-refundable payment of €50,0001, and the return lost on the investment.
- Check that you can meet the presence requirement of 90 days3 per year, which is verified at renewal.
- Do not confuse this presence with tax residence, which presupposes more than 183 days8 or the location of the centre of economic interests.
- Deal with the departure from France, including the exit tax and the request for a deferral at least from 90 days9 before the transfer.
The fourth point is the one that undermines the most Andorran cases. The residence permit and tax residence follow two different logics, and complying with the former is not enough to secure the latter in the eyes of the French administration.
What to set against it
Andorra belongs neither to the European Union nor to the Schengen area, which has practical consequences: customs formalities on purchases, no automatic recognition of certain rights, and access to healthcare organised by agreement.
The territory is small and mountainous, with no airport, and connections go through Toulouse or Barcelona. Daily life is comfortable, but the range of services is that of a small town, not a capital.
The Andorran passport gives visa-free access to about 17110 destinations, but naturalisation requires a very long period of residence and is not the purpose of the scheme.
The principality therefore suits those seeking light taxation in the immediate vicinity of France who accept a restricted living environment. It does not suit those who wish to keep most of their life on the other side of the border while domiciling their income there.
Please note
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: 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
- 8.
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
- 9.
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. »
- 10.
Andorran passport: visa-free destinations : 171
« Henley Passport Index — classement des passeports par nombre de destinations accessibles sans visa préalable (données IATA), consulté à la date indiquée. Valeur reprise de l’index de l’ancien site (barème à 227 destinations). »
henleyglobal.comVerified on Nov 2, 2026Verified source