Passive Residency in Andorra 2026: Investment, Housing and Legal Requirements

Regulatory Framework in Andorra

This page summarises the applicable regulatory context and the services BMC provides from our local office. For specific situations, we recommend an individual assessment: each case depends on tax residency status, the nature of the assets, cross-border ties and the applicable administrative timelines.

BMC Services in Andorra

The following services are available from our local office by appointment or coordinated from Madrid:

• International tax
• Exit tax
• Tax planning
• Investor residency authorisation

Typical Cases in Andorra

• Legal requirements for Andorran passive residency
• Minimum investment required: AFA deposit and additional investment
• Permanent housing: lease agreement or purchase
• Minimum presence in the Principality and verification
• Mandatory health and civil liability insurance
• Periodic renewals and maintenance of requirements

Standard Documentation

To open a file we typically request: identity document, certificate of tax residency (where applicable), documentation of the assets or transaction, relevant administrative certificates and, in cross-border transactions, equivalent certificates from the foreign jurisdiction. The exact requirements depend on the type of file.

Languages of Service

• Spanish
• English
• French

How to Schedule a Meeting

In-person meetings at the BMC Andorra office by appointment, Monday to Friday. Remote coordination available by video conference. To open a file, contact us via the office enquiry form or the general consultation form.

Passive Residency in Andorra 2026: Who It Is Right For and What It Really Requires

Andorran passive residency is the residence authorisation for individuals who wish to live in Andorra without carrying out any local economic or gainful activity. It is the route chosen by the majority of private investors, high-performance athletes, high-net-worth retired individuals and business owners who keep their income outside Andorra (dividends from participations, investment gains, royalties).

In 2026 the principal attraction is fiscal: Andorra applies a maximum personal income tax rate of 10% (compared with 47% in Spain), corporate tax at 10%, and levies no inheritance or gift tax. The Spain-Andorra DTT 2015 governs double taxation: Spanish-source income continues to be taxed in Spain (as IRNR — Impuesto sobre la Renta de No Residentes, non-resident income tax), but the aggregate tax burden can be reduced significantly when Andorran or international income represents the bulk of the assets.

Passive residency is not an automatic tax shortcut. It requires genuine investment, permanent housing and documented physical presence. The AEAT (Agencia Estatal de Administracion Tributaria, Spain’s Tax Agency) scrutinises relocations to Andorra with rigorous criteria.

Who May Apply for Passive Residency in Andorra

Andorran law (Llei qualificada d’immigracio — the Qualified Immigration Act — and its implementing regulations) permits passive residency for natural persons of any nationality who:

• Have no intention of carrying out gainful activity in Andorra
• Have sufficient economic resources to support themselves without working in the Principality
• Can meet the investment and deposit requirements

EU citizenship is not required: nationals of third countries may apply. A clean criminal record and the absence of legal incompatibilities with residence in the Principality are required.

The Andorran Passive Residency Application Process: Step by Step

Step 1: Feasibility Analysis and Preliminary Assessment

Before initiating the application process, BMC conducts an analysis of:

1. Exit tax cost: if the applicant has been a tax resident in Spain for at least 10 of the last 15 tax years and holds participations in entities with a value exceeding 4 million euros (or >=25% of capital), Art. 95 bis LIRPF (Ley del Impuesto sobre la Renta de las Personas Fisicas, Personal Income Tax Act) taxes the latent gains. Prior analysis of whether exit tax is triggered and what it would cost is a prerequisite for the decision to relocate.

2. Planning of the subsequent Spanish tax residency position: after obtaining Andorran passive residency, the applicant ceases to be a Spanish tax resident (if the Andorran criteria are genuinely met). Spanish-source income will fall under IRNR. It is necessary to identify which income continues to be taxed in Spain and at what rates under the DTT 2015.

3. Coherence of the relocation: the AEAT will investigate whether the relocation is genuine. If the family remains in Spain, if spending patterns are still predominantly Spanish, or if the real economic activity remains centred in Spain, the relocation will not be recognised.

Step 2: Constituting the Investment and AFA Deposit

The investment requirements for Andorran passive residency in 2026 include:

• Deposit with the Autoritat Financera Andorrana (AFA): a fixed amount set by Andorran regulation (typically in the range of 47,500 euros, subject to update). The deposit is refundable on leaving but immobilises capital for the duration of residency
• Additional investment in Andorran assets: real estate in Andorra, participations in Andorran companies, Andorran public debt or other assets within the Principality. The minimum investment required typically exceeds 300,000 euros between the deposit and the assets
• The investment must be evidenced before submitting documentation to the Servei d’Immigracio

Step 3: Permanent Housing and Lease or Purchase Deed

The applicant must demonstrate that they have permanent housing in Andorra:

• A long-term lease agreement (normally >=1 year, renewable) in the applicant’s name
• Or a purchase deed for a property in Andorra

The housing must be suitable for regular use (not a room in a third party’s home, not a storage unit). The Andorran property market in 2026 has rental prices above the Spanish average, particularly in Andorra la Vella and Escaldes-Engordany.

Step 4: Filing with the Servei d’Immigracio and Obtaining the Permit

The application to the Servei d’Immigracio del Govern d’Andorra (Andorran Government Immigration Service) includes:

• Official application form for passive residency authorisation
• Valid passport and identity documents
• Criminal record certificate (issued by the country of origin and the country of prior residence)
• Proof of the AFA deposit
• Evidence of the additional investment
• Lease agreement or property deed for the housing
• Andorran or international health insurance with Andorra coverage
• Civil liability insurance
• Declaration of sufficient economic means

The resolution period is 2 to 4 months, subject to the workload of the Servei. BMC coordinates with the local Andorran advisor for the preparation and submission of the documentation.

Costs, Timelines and Maintenance Obligations for Passive Residency

Costs of obtaining residency:

• Investment and AFA deposit: 350,000-600,000 euros depending on the assets chosen
• Advisory fees (management, coordination, documentation): depending on the file
• Servei d’Immigracio fees: modest (under 1,000 euros)
• Andorran notary fees for deeds: depending on the transaction

Annual maintenance:

• Minimum presence in Andorra: typically 90 days per year, documented
• Maintenance of housing and health insurance
• Periodic renewal of the permit (every 2 years in the first cycle, every 3 or more thereafter)

Residual tax obligations in Spain:

• Modelo 210 (IRNR) for Spanish-source income: rental income, dividends not covered by DTT, property capital gains
• Modelo 721 if crypto-assets are held abroad with a value exceeding 50,000 euros
• The DTT 2015 limits withholding on dividends from Spanish companies to 5% (parent companies) or 15% (others)

Common Risks and How to Manage Them

Lack of genuine presence in Andorra. Obtaining the passive residency permit and spending fewer than the required 90 days leads to non-renewal of the permit and, potentially, to the AEAT checking tax residency for the period during which the taxpayer claimed to be Andorran. Detailed records of entries to and exits from the Principality are essential.

Failing to achieve Andorran tax residency. The passive residency permit is not automatically equivalent to Andorran tax residency. For tax residency to change, the taxpayer must meet the DTT 2015 criteria: permanent home, centre of vital interests or habitual abode in Andorra. If the AEAT applies the DTT tie-breaker and concludes that the centre of interests remains in Spain, it may regularise the taxpayer as a Spanish resident.

Breaching the “passive” profile. Passive residency prohibits gainful activity in Andorra. Carrying out economic activity in Andorra without having converted the permit to active residency infringes Andorran immigration law and can result in revocation of the permit.