Andorran passive or non-profit residency is the quickest and easiest way to reside in Andorra.
Andorra is a rather restrictive country regarding immigration (with certain privileges for Spanish, French and Portuguese, but quite strict with other nationalities).
The report “The definitive guide to living in Andorra” is now available, with detailed information on Andorra’s tax framework, residence and society.
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However, passive residence allows you to obtain the right to live in the principality in a much simpler way, even as a non-EU national, which makes it very popular for citizens of countries such as Mexico, Argentina, Uruguay, Russia, etc.
Who is the passive residence for?
Andorran passive residence can be of different types, but it functions for practical purposes as a Golden visa or residence by investment. It is granted for the following reasons:
- For reasons of scientific, cultural or sporting interest (many Moto GP professionals have availed themselves of it).
- Professionals and entrepreneurs with projects at international level (large entrepreneurs with “overseas” business).
- For investment in Andorra (the most common of the three).
In this guide we will focus on the third one: the passive residence by investment.
This modality is aimed at people who wish to live in Andorra without working as an employee and living mainly from their passive income, so it is ideal for pensioners and HWNI (“High-Net-Worth Individual”) who live from their rents, investment portfolios, bank interests and income generated outside Andorra in general.
In short, if you have a high purchasing power and have weighed living in Andorra, this residence is probably the way that suits you best.
What are the advantages of passive residence?
Passive residence, despite its barriers to entry (it is mainly for people with a lot of capital), offers a number of very attractive advantages. Among them are:
- It is very convenient for those people who travel a lot, as it only requires staying in the country 90 days instead of the 183 days of self-employed residency.
- It is subject to a less exhaustive control than active self-employed residence. Generally, the Andorran police do not check that the 90-day requirement is met in the country.
- It is a residence permit that can be obtained by all types of non-EU nationals and allows them to travel freely in Spain, France and Portugal. That is to say, with the passive residence non-EU passport holders (Russian, Ukrainian, Uruguayan, Argentinean, etc.) will not be limited in their stay as tourists and will not need a special visa.
- It allows investments to be made in the country without the need to pay the foreign investment tax, which is a not inconsiderable saving.
What are the requirements?
These are the specific requirements to obtain Andorran passive residence by investment:
- Have a real estate property in Andorra or a rental contract.
- Invest in a real estate property with a minimum value of 350,000 euros, pay this amount in a banking product with Andorran ISIN or invest it in the capital of an Andorran company.
- Minimum residence period of 90 days.
- Certificate of good conduct.
- Private medical insurance.
- Medical certificate issued in Andorra.
- A deposit of more than €50,000, plus €10,000 per dependant (for the partner or each child coming to live in the principality with such residence), with the Andorran Financial Authority until the passive residence is not settled.
- Conformity of income of more than 300% of the Andorran minimum wage, currently situated at 1083,33€. In addition if you have dependents you must add 100% extra per dependant.
In general, the passive residence implies an investment of approximately 400,000 €, in addition to being able to prove that you are not economically dependent.
Does this allow me to pay taxes in Andorra without being a tax resident there?
Although some Spanish advisors make the mistake of selling Andorran residency as a panacea that allows you to lower your tax bill and continue living in Spain, we must clarify a very important detail: the principles of international taxation are above residence permits, and that this passive residency is a mere migratory authorization to reside in the country legally.
This means that if you reside only 90 days in Andorra and spend the rest of the year in Spain, you can be sure that the Spanish Tax Agency will come after you.
In other words: to enjoy the tax advantages of Andorra you will have to take into account not only what is established in the immigration legislation of each country, but also in the tax legislation and agreements to avoid double taxation.
How to take the first step?
If you are considering moving to Andorra, we recommend reading the report “The definitive guide to living in Andorra”, with the most complete information on Andorran taxation, residence and society.
For any other matter, please do not hesitate to contact us.
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