Andorra has become one of the most attractive countries in Europe for new investors and entrepreneurs, both for its attractive taxation and its quality of life. To live in the Principality you need a residence permit. There are currently only two types of residency, although there are some differences. Below, we will detail the main differences.
1. Active residence
This is the residency that allows working and residing in Andorra, in addition to being declared a tax resident in the Principality. This is achieved by means of a permanent and effective residence of more than half a year (183 days) in Andorra. Likewise, in the event that more than one country claims a resident as a tax resident in a territory, other factors are taken into account to break the tie (especially within the framework of double taxation agreements).
These factors are having the centre of economic interests in that country, either directly or indirectly. This means that the main economic base or activity of the person concerned is in one of the two countries. In addition, if the spouse or children (considered as the family nucleus) reside in different countries, in the event of a tie, the resident will be considered to be taxed where the family nucleus resides.
Having made these clarifications, we will discuss the two sub-types of active residences:
A) Self-employed residence – definition and requirements
Active residence, with a work permit and for own income, is mainly requested by entrepreneurs and freelancers. The profiles of people who establish themselves as self-employed in Andorra are very varied and range from people with liberal professions (lawyers, consultants), to digital marketing specialists, influencers, models, youtubers, fitness personalities and creators of infoproducts, among others.
What do these people have to prove in order to apply for an active residence permit in Andorra?
- Training and experience through the Curriculum Vitae in the field in which they wish to develop their professional activity.As this is not a European Union country, official diplomas and documents issued by the Public Administration must be apostilled. Please note that obtaining the Hague Apostille may cause the procedures to be delayed for more days, even weeks.
- Incorporate a company in Andorra or acquire at least 20% of an Andorran company.
- Obtain a position in the administrative body of the company.
- Registering a commercial activity, keeping it active and operational.
- To pay a mandatory non-remunerated (recoverable) deposit of €15,000 to the Andorran Financial Authority (hereinafter referred to as AFA). This deposit will be recovered in the event that the person decides to stop residing in Andorra or in the event of death.
Apostilled criminal record certificate.
- Rental or purchase contract for real estate in Andorra.
- Medical examination. Prior to obtaining the permit, a brief medical inspection is carried out in the same building as the Inimgración, consisting of a questionnaire, a physical examination of the back and auscultation and a vision test.
B) Residence for the purpose of paid employment
If you are hired by an Andorran company, you will go through a process similar to that of self-employed residence, except that you will not have to pay the €15,000 deposit and the company will pay the costs of your registration as a resident (approximately €200). However, you should be aware that it is not easy for an Andorran company to hire a non-resident.
First of all, Andorra is a very protectionist country in terms of employment and therefore has one of the lowest unemployment rates in Europe (around 2%). This is possible because it gives priority to hiring the unemployed who are already registered with the Andorran employment service. In order for an Andorran company to be able to hire you, two quotas must be valid at the time you are hired: that of people with your same profession who are unemployed at that moment and that of non-Andorran people who are already working in that company.
If you meet these two requirements and the selection process can be finalised in your favour, before you receive your residence permit and work as an employee in Andorra you must:
- Provide proof of training and experience by means of a Curriculum Vitae. Both the training and the experience that you accredit (by means of your employment record) must be related to the vacancy profile to be covered. The qualifications must be submitted with the original diploma.
- Find a company that will hire you, with both quotas available and that fits the profile with your corporate purpose.
- Criminal record certificate APOSTILLED.
- Rental or purchase contract for a property in Andorra. If, for example, you are staying with a relative or in a hotel, a domicile document signed by the person responsible for the property will suffice
- Medical check-up.
2. Passive residence
Passive residence is that which allows you to reside but not to work. To obtain it, it is necessary to prove that you have sufficient assets or income to subsist without the need to work. If this type of residence is obtained, the minimum period of residence is 90 days per calendar year, half of what it would be with an active residence. There are three types of passive residence:
A) Non-profit residence
It entails a minimum mandatory investment of €350,000 in Andorran real estate, shares, funds of Andorran companies or in debt instruments of the Principality of Andorra.
B) Residence for professionals with international projection
An investment is not necessary, but it is sufficient to incorporate or acquire an Andorran company that provides 85% of its services outside the Principality.
C) Residence for reasons of scientific, cultural and sporting interest
No investment is required. However, it is necessary to prove professionalism and income in one of the related fields.
3. Requirements for living in Andorra
It applies to both passive and active residence:
- Be of legal age, or an emancipated minor
- Residence in the country for at least 90 days (for active residence 183 days)
- No criminal record
- Passing the medical check-up
- The documents necessary to meet the above requirements:
- Valid passport
- Apostilled criminal record certificate
- Medical certificate
- Rental or purchase contract
4. Why live in Andorra
Andorra is a country with political and financial stability, as well as great legal security (something that is highly valued by businessmen and entrepreneurs). It is also one of the safest countries in the world, with a low crime rate. According to the Travel Risk Map, it is ranked among the top countries in the world, along with other countries such as Switzerland, Luxembourg and Finland.
The Andorran healthcare system (SAAS) is robust and egalitarian. The same hospitals and doctors are available to the richest and the poorest in the country, as it is structured through a co-payment system, with social security paying 75% of the visit or intervention and the patient paying 25%. Thus, a visit to a general practitioner or a physiotherapist costs 5 euros, a specialist such as a dermatologist costs 7 euros and an emergency service or a visit to the dentist costs 10 euros.
Andorra has the best health system according to the prestigious review The Lancet, which places the Principality at the top of the world ranking for its low rate of avoidable deaths in the event of definitive medical care. In addition to being efficient, it has healthcare agreements with neighbouring countries, especially the regions of Catalonia and the south of France (Toulouse hospital). Thus, an Andorran citizen can visit leading centres such as Teknon or Vall d’Hebron as if it were a hospital in Andorra, as the Andorran social security will pay 75% and the taxpayer 25%.
The Principality has a multilingual education system (Andorran, Spanish, French and British). In other words, parents can choose between four education systems, the first three public and the British private, to educate their children. The children also take skiing as a compulsory subject within the Andorran educational framework, so they can do sport and be in contact with the environment and nature that characterises the country of the Pyrenees.
Finally, and leaving aside the quality of life, Andorra offers one of the most attractive tax frameworks in Europe, and even in the world. With its low taxes, both personal income tax, IGI (VAT) and corporate tax, it is attracting more and more new residents to Andorra.
Advantages of living in Andorra:
- Low taxation and tax advantages
- Geographical location in the heart of Europe, less than three hours by car from two major capitals such as Barcelona and Toulouse.
- Quality of life: security, care system, education and nature Wide range of leisure activities
How long does it take from the beginning of the procedure until I get my residence permit?
This is not a very specific estimate, as the waiting time can vary greatly depending on whether the person is emigrating from the European Union and whether he/she is a self-employed or employed person. As a generic approximation, we could consider that a person coming from the European Union could take 4 weeks to obtain a residence permit if he/she is hired by an Andorran company, and about 3 months if he/she also has to set up a company.
✔️ We remind you that with Andorra One you can halve the waiting time to get your residence permit on your own account
How often is the residence permit renewed?
Once the residence permit has been obtained, it should be noted that the first year is only valid for 12 months. Once the first year has passed with the requirements described above, it is valid for two years for the following 3 years. Finally, it will be renewed every 10 years. In conclusion, after 7 years of residence in the Principality, the residence permit is valid for 10 years.
Is it possible to obtain Andorran nationality?
After spending 20 years living in the Principality and passing an exam on the culture and language of the country, you can choose to obtain Andorran nationality, renouncing your previous nationality, since Andorra does not allow dual nationality. Having Andorran nationality will allow you, among other things, to vote in Andorran elections, take part in civil service examinations and hold political office.
Is there a possibility of family reunification?
Yes, family reunification can be requested by any Andorran citizen or any person with a valid residence and work permit residing in the country, as long as they meet the minimum economic requirements and the person who wishes to move to Andorra does not have a criminal record.
Reunification may be requested for spouses or persons in an analogous relationship of affectivity (such as unmarried partners); for minor and adult children over whom they have legal guardianship and custody; ascendants who are dependent on them (minimum 65 years of age and retired persons) and for all those over whom they have legal guardianship.
What is the duration of the residence permit?
In cases where the reunification is requested by a person of Andorran nationality, the residence authorisation is valid for a maximum of 10 years. In cases where the reunification is requested by a person resident in the Principality, the residence permit is valid for 1 year, renewable three times for periods of 3 years, and finally valid for 10 years.
Do I have to be working to access social security services (CASS)?
Yes, having a permit entitles you to social security in Andorra. In order to have access, you must therefore be working and be paid for it.