On September 12, 2022, the President of Andorra announced in the Andorran parliament some measures that will imply major changes in the residency application, increasing considerably the economic requirements to be able to reside in the Principality.
The executive has committed to approve such measures during the current legislature, a fact that may have a significant impact for those people who want to move their residence to Andorra during the beginning of 2023.
In this way, it was announced the presentation of amendments to the draft law amending the Foreign Investment Law in order to increase the economic requirements for obtaining residence permits in Andorra.
The main changes in the economic requirements for Andorran residences will affect both passive and active residences.
Regarding passive residences, the holder will have to invest permanently and effectively an amount of 600,000 euros in various types of assets such as:
- Real estate located in Andorran territory.
- Participations in the share capital or in the equity of companies resident in Andorra.
- Debt or financial instruments issued by entities resident in the Principality.
- Debt instruments issued by the public administration.
- Life insurance products contracted with entities resident in the Principality.
- Non-interest bearing deposits of the Andorran Financial Authority.
According to what was revealed by the Andorran executive, the investment will be reduced in a special way to 400,000 euros if it is effectively invested in the Fons d’Habitatge de Andorra, an institution similar to a financial instrument to develop affordable social housing policies. It will operate as a SICAV, with public and private partners, and is expected to be operational by the end of the year.
In the event that the investment in Andorran assets is made totally or partially in real estate, the executive has also indicated that a minimum amount of 400,000 euros will have to be allocated for each real estate unit that is acquired, thus avoiding speculation in small apartments.
Likewise, as has been the case until now, the individual will have to invest 47,500 euros in the Andorran financial authority and 9,500 euros for each dependant. Unlike before, there will be a cost of 2,500 euros for the holder of the residence and a cost of 500 euros for the regrouped person.
Main article: Active residence Andorra
Regarding the active residences, the new requirements aim to be the following:
- Increase in the amount of deposit in the AFA from €15,000 to €50,000.
- Increase in the percentage of participation required in Andorran companies that are formed by applicants for active residency, increasing the percentage of participation above the current 20%.
- Address the consecutive rejections of renewal of residences for lack of activity – companies without activity – or for lack of effective residence – not actually residing 183 days in Andorra-.
- Define the assumptions in which it is not necessary to make the deposit in the AFA due to the start of digital economy, entrepreneurship and Innovation projects.
Likewise, the Bill to amend the Foreign Investment Law was approved with quite relevant changes, especially those related to the liberalization of investment by those countries with an agreement to avoid double taxation with Andorra or with a collaboration agreement on foreign investment.
This would imply that foreign investments made by nationals or residents of countries such as Spain or France, among others, could be made without prior administrative authorization.
In short, the main change in the requirements aims to be in the amount of the deposit required to obtain active and passive residences:
|Until 2022||From January 1st onwards|
|Active residency with a 15.000 euros AFA deposit .||Active residency with a 50.000 AFA deposit.|
|Passive residency with a 350.000 euros invesment.||Passive residency with a 600.000 euros invesment.|