How to relocate to Andorra? What you need to know

Transferring residence to Andorra requires a careful and well-planned process.

First of all, it is essential to carry out an internal Due Diligence of the client's personal and professional situation. Andorra has rigorous rules regarding the prevention of money laundering, which is why it is crucial to analyse the origin of the funds and the absence of a criminal record (a necessary requirement for obtaining a residence permit).

If during the study any potential risk is identified that could affect the application for a residence permit and it could be rejected, or if the banks in Andorra reject the application to open a bank account, we will inform the client so that he/she can make an informed decision.

Types of residence permits

Regarding residence permits in Andorra, there are different types of administrative residences, according to the profile of the applicant. These can be active residences or residences without lucrative activity (known as "passive residences").

Active residences

These are aimed at residents who wish to establish their residence in Andorra permanently and effectively for a minimum of 183 days a year and, at the same time, be able to work in Andorra or from Andorra. This type of residence includes self-employed workers (freelancers) and employees working for a company established in Andorra.

If the type of residence chosen is that of a self-employed person, the applicant for residence must:

1. set up an Andorran company, the recommended type of company in most cases being the limited liability company "S.L.". This type of company requires a minimum share capital of €3,000;
2. have a shareholding of more than 34% in the share capital of the Andorran company;
3. hold a member position in the company's administrative body;
4. the Andorran company must own a business license duly registered in the Andorran Register of Commerce;
5. make a non-remunerated deposit of €50,000 with the Andorran Financial Authority "AFA". This deposit is returned to the applicant for residence once he/she is no longer a resident in Andorra.

Passive residences

This is aimed at a profile of residents who wish to establish their main and effective residence in Andorra for a minimum time period (90 days a year). There are the following types of passive residences:

1. residents without lucrative activity. This type of residence is indicated for an investor profile, who lives on a passive income in Andorra. The residence without lucrative activity will require an investment of 600.000€ in different types of Andorran assets, among which we have:
   • Real estate located in the territory of the Principality of Andorra;
   • Shares in the share capital or equity of companies resident in the Principality of Andorra;
   • Debt or financial instruments issued by entities resident in the Principality of Andorra;
   • Debt instruments issued by any public administration of the Principality of Andorra;
   • Life insurance products contracted with entities resident in the Principality of Andorra.
2. elite sportspersons , artists and scientists. This type of residence requires that 85% of the services are used outside Andorran territory;
3. professionals with international projection. This type of residence requires that:
   • 85% of the services must be used outside Andorran territory;
   • a maximum of one person must be employed on an employment basis in Andorra;
   • the headquarters or base where the professional activity is carried out is located in Andorran territory.
4. residence for admission to private geriatric, medical, or therapeutic centers.

This type of passive residence requires a non-remunerated deposit to the AFA of €47,500 for the main residence and €9,500 for each residence dependent on the main holder. This deposit is returned to the applicant of the residence once he/she is no longer a resident in Andorra.

According to the client's profile, we advise which type of residence is suitable and fits the client's profile, in order to obtain an administrative residence permit in Andorra and move to live in the country.

It is important to bear in mind that obtaining an administrative residence permit only entitles the holder to reside legally in the country. However, it does not automatically make you a tax resident .

In order to be considered a tax resident in Andorra , the criteria established in the Andorran tax regulations for individuals must be followed, as well as the criteria established in the agreements to avoid double taxation in tax matters (DTAs) that Andorra has signed with other jurisdictions.

Is it necessary to live in Andorra to keep the Andorran administrative residence permit?

The Andorran immigration regulations establish a clear difference in terms of the number of days of stay in order to be considered an administrative resident in Andorra, therefore, in order to keep and renew the residence permit:

• The holder of an active residence permit must reside in Andorra permanently and effectively, which means living at least 183 days a year;
• The holder of a passive residence permit must reside in Andorra for at least 90 days a year.

It is important to note that the fulfillment of the permanence requirement is fundamental to keep and renew the residence permit in Andorra by the immigration service authorities. It is quite common in the case of renewals of active residences that the Andorran police verify the effective permanence of the holder of the residence.

This information is provided for informational purposes only and does not constitute any recommendation or legal advice. It is based on the regulations in force at the time of writing.

At Carlota Pastora Advocats we are available to answer any questions related to the choice of the type of residence. Our team of experts in tax and immigration law will be happy to assess your specific profile and provide you with personalised legal advice on the type of residence that best suits your needs and objectives.