Due to the countless benefits of residing in the Principality, more and more people are deciding to move there after finishing their working life.
This is possible in two ways: by being regrouped by an immediate family member or through passive residence.
There are also bilateral agreements with countries of the European Union, among them Spain, France or Portugal, which allow to receive the pension and to reside in Andorran territory.
As not everyone has a direct family member in Andorra, the most common way to access the Principality as a pensioner is through “passive residence”, which allows residing in the country without working or even generating income in the country. This type of residence does not require contributions to the Andorran Social Security Fund (CASS).
However, it is a requirement that the passive resident has private health coverage, being able to receive the corresponding pension from his country of origin and taking advantage of the tax benefits in Andorra.
Requirements for retirement in Andorra
Main article: Passive residence Andorra.
As mentioned, one of the requirements for entry is to have private health coverage. On the other hand, non-Andorran retirees who decide to reside in Andorra through passive residence, must invest at least €400,000 within the Principality, through the purchase of real estate, establishment of a company, or in a personal account in an Andorran bank. On the other hand, they must deposit the amount of 50.000€ in the AFA (Andorran Financial Authority).
Other requirements are:
- Not to have a criminal record.
- To have a valid passport.
- Confirm marital status at the corresponding office.
- Completion of a medical examination at the Immigration Medical Service, once in Andorra.
- Demonstrating an income of more than 300% of the minimum wage in the Principality.
- Residency in Andorra for at least 90 days during the year.
- Other certificates or documents that are requested in relation to the pension or medical insurance.
Also, a document for the “Declaration of work activity abroad” must be filled out and the corresponding process carried out through CASS.
Some of the tax benefits enjoyed by retirees in the Principality are:
- Wealth tax exemption
- Exemption on inheritance and gift taxes.
- Very low taxes on gains obtained from wealth (the maximum amount is 10%) or exemption from the same, depending on the case.
Other advantages of retiring in Andorra
Both for those who have contributed in the Principality, as well as for those who decide to move after retirement, there are countless advantages. Among them, we highlight the fact that it has what is probably the best health system in the world, in addition to the security and tranquility that this place offers for those who wish to enjoy a peaceful retirement close to nature.
Andorra has an almost zero crime rate, an excellent climate and an exemplary transportation system, and offers a quality of life that is unparalleled in the European Union. It is also a politically neutral territory, which over the years has remained on the sidelines in political and social conflicts.
Retire having worked in Andorra
Finally, those who have worked in Andorra will be able to retire from the age of 65, having a minimum of 180 months of social security contributions. However, there is the possibility of early retirement at the age of 61, with some requirements, such as a minimum contribution of 40 years and not being registered as a self-employed or salaried worker.
Likewise, those who wish to continue working after the age of 65 can do so without any problem, as long as they continue to contribute.
All workers, both self-employed and salaried, contribute 22% of the total salary. Salaried workers contribute 6.5% (the rest of the amount is covered by the company), while the self-employed must contribute the full amount.
However, reforms are planned in the short term to improve and make the Andorran pension system more sustainable.
Do you need help?
If you are considering retiring in Andorra, we recommend reading the report “The definitive guide to living in Andorra”, with the most complete information on Andorran taxation, residence and society.
You can also contact us, from Andorra Inc. we can help you to get residency in Andorra and to regroup your family members.