The beautiful landscapes, the excellent quality of life, and, of course, the extraordinary tax system have made Andorra the dreamland of many.
But what does it take to become an Andorran resident?
Let’s take a look.
Requirements to be a tax resident in Andorra
The requirements vary a bit depending on whether you are moving to the country to work, to start a business, or to be a passive resident (living there without working, the equivalent of the golden visa).
Let’s first look at the general requirements:
- Be of legal age (unless accompanied by an adult).
- Reside in the Principality for a minimum period of time.
- Have a place of residence, regardless of whether it’s owned or rented.
- Pay a deposit of between 15,000 and 50,000 euros.
- Not to have a criminal record.
- Pass a medical examination.
In order to prove the fulfillment of these requirements, it is necessary to provide the following documentation:
- Certificate of criminal record from the country of origin.
- Valid passport and certificate of marital status.
- A document that accredits the payment of the deposit to the Government of Andorra.
- Originals of the sale contract of housing or of the rent contract.
- Documents related to insurance for disability, illness, or retirement.
Types of residence in Andorra
A residence as an entrepreneur
This residence is known as self-employed and is the most common among entrepreneurs who move their activity to the Principality.
To transfer their tax residence to Andorra, they can either set up their own business or acquire a minimum 20% shareholding in a local company and take on a management position in it.
In this case, it’s necessary to have a minimum capital of 3,000 euros to start the procedures and pay a deposit of 15,000 euros. The minimum time of residence required in this case is 183 days per year.
In this modality of residence, it’s necessary to present a curriculum, although it’s a mere formality.
The residence permit granted is valid for one year, after which it is renewed:
- After two years
- After five years
- And thereafter, every ten years.
A residence as an employee
This type of residence is obtained by those who obtain a job in local companies or businesses in Andorra. Although, one of the essential requirements to be able to start working is to have a minimum experience of two years in the requested position.
The particularity is that, if one year later it’s decided to opt for entrepreneurship, it will no longer be necessary to pay the deposit of 15,000 euros that is required for foreign entrepreneurs.
In order to be able to work legally, it’s necessary to have a green card, which is managed by the employer and costs 180 euros. Once the card has been issued, it remains in the possession of the worker, who can use it to look for a new job.
In this case, it’s also necessary to attach a curriculum vitae among the documentation and to stay in the country for a minimum of 183 days.
Important: Relocate&Save doesn’t provide residency advice on behalf of others.
Main article: Passive residence in Andorra
Passive residents are people who don’t want to work (neither self-employed nor employed) and also large estates. Tax residence is obtained with a minimum stay in the country of 90 days.
In the case of passive residences, it’s required to present a property title or a bank certification that proves that it’s possible to live in the country without the need to work. In addition, it’s necessary to prove that an investment has been made.
The requirements vary depending on the type of passive residence:
- Residence for investors: Requires a minimum investment of 350,000 euros in real estate in Andorran territory or in an Andorran bank fund. Interested parties must prove that they have an income of at least three times the minimum wage, and pay a deposit of 50,000 euros and an extra 10,000 euros for each family member who is dependent on the applicant.
- Residence for professionals with international projection: When the applicant’s company is based in Andorra but obtains a minimum of 85% of its income abroad. In this case, it’s necessary to pay the same deposit as in the previous case and to present a certified business plan.
- Residence for sportsmen, scientists, or artists: The same bond is paid as in the previous cases, and it’s necessary to have an income above 300% of the minimum wage. In addition, it’s necessary to provide evidence that proves that one has the condition of a sportsman, scientist, or artist.
In the last case, the residence is obtained for a period of one year and after the first renewal, it’s renewed every three years. However, in the other cases, the residence has a duration of two years and is extended for two more years.
How to start the process
If you wish to transfer your residence to the Principality, either through an active or a passive residence, at Relocate&Save we have a team of tax experts based in Andorra.
And if you’re still not sure which is your ideal tax destination, we recommend you to read the report “The three best tax destinations of the moment”, available for free below.