Passive residence in Andorra, also known as non-profit residency, is a type of residency that allows foreigners to live in the principality without having to work in the country.
For whom is passive residence in Andorra suitable?
Passive residence is ideal for those who are looking for a secure and tax-favorable environment. Below we explain it in detail:
- Pensioners: Retired people who live on their pensions and other passive income and who are looking for a safe and fiscally attractive place to reside.
- High Net Worth Individuals (HNWI): Those with high net worth who live off their investments and passive income. Andorra offers a favorable tax environment and a high quality of life.
- Foreigners from outside the EU: Since Andorra has immigration restrictions, this modality makes it easier for citizens from countries such as Mexico, Argentina, Uruguay, and Russia (among others) to obtain the right to reside in the principality without the need for work permits.
What are the advantages of obtaining passive residence in Andorra?
Passive residency in Andorra offers multiple attractive advantages for high-net-worth individuals looking for a convenient and beneficial place to reside.
- Minimum stay: Passive residents are only required to stay in the country for a minimum of 90 days per year compared to the 183 days required for active self-employed residency. This makes it ideal for frequent travelers who cannot commit to long periods of continuous stay in one place.
- Unrestricted travel in neighboring countries: Holders of passive residence can travel freely in Spain, France, and Portugal without the need for additional visas, which is a great benefit for citizens of non-EU countries such as Russia, Ukraine, Uruguay, and Argentina, among others. This freedom of movement facilitates both leisure and business travel.
- Investments without additional fees: Passive residents can make investments in Andorra without having to pay the foreign investment tax. This represents a significant saving and encourages investment in the country, benefiting both investors and the local economy.
- Low tax burden: Andorra offers a very favorable tax environment with low taxes compared to other countries. This includes income, wealth, and corporate taxes, making it an attractive destination for those seeking to optimize their tax situation.
What are the requirements to apply for passive residence in Andorra?
In order to obtain passive residence in Andorra by investment, it is necessary to meet several specific requirements.
First of all, it is essential to own a real estate property in Andorra or to have a valid rental contract. In addition, a minimum investment of 600,000 euros must be made, either in one or several real estate properties whose value must exceed 400,000 euros, in banking products with Andorran ISIN, in the capital of an Andorran company or a combination of the above.
Another requirement is a minimum stay of 90 days per year in Andorra. Additionally, a criminal record certificate, generally issued by the police authorities of the country of origin, must be presented. It is also mandatory to take out private medical insurance covering the entire resident family.
To ensure the health of the applicants, it is required to obtain a medical certificate issued in Andorra. In addition, a deposit of €47,500 must be made with the Andorran Financial Authority, plus an additional €9,500 for each dependant, such as a partner or children. This deposit is deductible from the total amount of €600,000 to be invested in Andorran assets.
Finally, applicants must prove income above 300% of the Andorran minimum wage. If there are dependents, 100% of the minimum wage must be added for each person. These requirements ensure that applicants for passive residence have sufficient financial means and meet the standards of health and conduct established by Andorra.
As you can see, passive residency in Andorra has numerous sections that must be taken into account when starting the application process. It is common for this type of situation to generate tension or confusion in applicants, as they do not have all the necessary knowledge or tools. At MCA Assessors, we have a team of professional advisors to guarantee the application of your passive residence following all the regulations in force, avoiding any type of worry.
