Even if most of your personal income or economic activities are performed outside of Andorra, you would still qualify for passive residency. This allows any individual to save taxes and maintain a comfortable lifestyle at the same time.

You’re probably wondering whether you can become a citizen once you secure a passive residency permit. You can, but not right away. Each permit is granted for two years. After that, it is renewed for another two years, then a further three years and then ten more years. Once you have reached twenty years of residency, you can apply for citizenship.

Confused? Don’t be—we’re here to help. Read on as we break down the different types of passive residency in Andorra and walk you through the application process.

Requirements for Acquiring Passive Residency

Acquiring residency in Andorra is relatively straightforward, but it has its quirks. Prior to being granted a residency permit, you will have to meet a list of requirements. These include:

Criminal background check: Before becoming a resident, you’ll be required to present proof of a clean criminal record via police certificates from your country of origin.

Proof of income and health insurance: You will need to provide proof of a steady source of income and some form of private health insurance. Your personal income level must be no less than 300% of the average minimum salary for an Andorran resident. If you plan on moving with a family, the same rules apply to each family member. However, for them the rate is 100%.

Government bond deposit: To obtain passive residency you will need to make a mandatory investment of €47,500 into a government bond.

Age requirement: Applicants must be over 18 years of age.

Proof of accommodation: Your residency application needs to be backed by proof of accommodation. This could be a rental property or a home you've purchased.

There are many more caveats involved in ensuring the success of your application. It’s also worth mentioning that your application needs to be in Catalan. Of course, we can assist you with this, along with any other hoops that you’ll have to jump through.

Types of Passive Residency in Andorra

Right now, there are three distinct routes you can take to gain passive residency in Andorra. You may be eligible for one of them or even all three. Each comes with its own set of requirements that need to be met, however in all cases you will need proof of private medical insurance. Without this, you cannot properly fulfill the standard immigration prerequisites laid out by the Andorran government.

Each of the three options has its own unique benefits. Let’s take a look at the types of passive residency Andorra currently offers.

Residency Without Lucrative Activity

Okay, the name is long and intimidating, but residency without lucrative activity is actually pretty straightforward. Essentially, this is what is known in Andorra as “Type 1” residency. To obtain this type of residency, individuals will need to make a total investment of €600,000. (This includes the €50,000 government bond deposit mentioned above.)

Even once you obtain this visa, you are not yet considered a true tax resident. You need to spend at least 90 full days per calendar year in the country. (If you spend 183 days or more here, you will become a fiscal resident and will be liable for income tax.) As we mentioned earlier, you cannot earn less than 300% of the minimum Andorra salary.

Once you've applied for residency, you will have a 7-month window to prove your investment to the country and get all of your proverbial ducks in a row.

Investments do include property or real estate, but if you prefer to rent you can invest through various other means. Ways in which you can reach the €600,000 investment threshold include:

Investment accounts

Shares in Andorran companies

Investments in the property market

Public bonds

Remember, the government does not care so much about how you invest, so long as you meet their prerequisites for residency without lucrative activity.

Professionals in International Business

“Type II” residency is geared towards any individual who does business abroad. With this type of passive residency, interested applicants are required to form an Andorran company. This is in addition to the government bond listed above. Once your Andorran company is formed, you will need to spend at least 90 days within the country each year and conduct 85% of business outside of the country.

Your company will be subject to Andorra’s corporate tax rate of 10%. In the process of applying for this type of residency, you will need to submit a proper 3-year business plan along with all required documents. You must also show that you have experience with the type of business you are planning to create.

Most people prove business acumen and experience by submitting a resumé, but it is also useful to collect several references that relate to the business you are trying to create. Once the government approves your business plan and company, you will have seven months to bring that company to fruition. Making sure you have all of your bases covered prior to the 7-month threshold is key here.

Achievement Based Residency: Accredited Athletes, Scientists, and Artists

The third and final type is based on international accreditation. It is geared towards individuals who are professional athletes, performers, scientists, artists or anyone who has a high status as an individual. Bear in mind that to qualify, 85% of your work must happen outside of Andorra’s borders. There is not currently a requirement for investment for this type of residency outside of the €47,500 government bond.

With that said, you cannot just claim to be something you’re not. Approval of your application will be contingent upon proper documentation of your achievements. Here is what you must provide to the government:

Documents proving success within your field, notable achievements and overall qualifications

A detailed income report

Awards and accreditation within your field or practice

Recommendations from reputable peers

Only once you prove your status in your field will you qualify for this type of passive residency.

Proof of Insurance

Anyone who wants to apply for a passive residency will need to hold three types of insurance. You will also need to prove your current enrollment. Failure to hold insurance will result in your application being rejected.

The three types of insurance you will need to possess include:

Incapacity

Medical

Old age

Depending on what country you’re from, you are probably only familiar with health insurance. That means you probably don’t hold incapacity or old age insurance. We can absolutely assist with arranging this. To give you an idea of price, local insurance companies will charge around €1,250/year for all three types of coverage.

Differences Between Passive Residency and Active Residency

Andorra also offers active residency to prospective residents. The path to each is quite different, as are the benefits. So, what separates active and passive residency? Well, it all starts with how often you plan on staying in the country. Active residency is reserved for individuals who want to live and work here year-round.

In contrast, passive residency is reserved for those who will be spending 183 days or less in Andorra. Most of the time, passive residents only spend around 90 days per year living and working in the country.

Those who hold active residency will also have to fulfill and meet certain duties at all times. Passive residents are not required to uphold such duties. What must one do as an active resident? Let’s break it down below.

Duties include:

Being enrolled in CASS, Andorra's healthcare and social security system

Possessing an immigration permit at all times

Notifying the government of any changes to marital status, address or dependents

As a passive resident, you will not need to partake in these duties. Passive residency is ideal for self-employed individuals and entrepreneurs who want to live here. If you want to live and work in Andorra full time, opt for active residency so that you can take advantage of the myriad of benefits. You’ll know exactly what type of residency works best for you based on how much time you plan on spending in the country.

Acquiring Andorran Citizenship

Becoming an official citizen of Andorra is not easy. As an adult you have two options: naturalisation or marriage. The former requires that you’ve resided in the country for over twenty years and the latter at least three.

This duration is reduced to ten years for children who have completed their studies in Andorra's school system. If a child is born in Andorra, they're eligible for citizenship immediately if one or both parents are citizens or have been living here legally for at least ten years. Children born abroad to Andorran parents are also eligible (even if only one of the parents is Andorran.)

What’s Life in Andorra Like?

Despite its small size, Andorra will never cease to amaze you. Expect to see a casual blend of rural and urban—there will be days when you spot cattle and cutting edge sports cars on the same street. The property market is diverse; everything from small studio apartments to large chalets are up for grabs. First class banking, exceptional healthcare and education, an excellent tax system and duty-free living are some of the main advantages of living here.

Because it’s nestled in the Pyrenees, you can make the most of every season with an array of outdoor activities, such as hiking, mountain biking and skiing. For those who enjoy late nights, you’ll be happy to know that Andorra does have a nightlife culture if you know where to look. It also enjoys a thriving après-ski scene.

The possibilities are endless. It’s a great place to set up a base and call home.

Need More Information?

One thing to consider when applying for passive residency is any additional documentation that may be necessary. Certain EU countries do require extra documentation in order to apply. These countries include Poland, Bulgaria, Czech Republic, Latvia and Romania. Failure to provide extra information can make the process more difficult or even prevent you from obtaining residency entirely. Of course, we’d love to help make this part of the process easy for you.

Need more information? Reach out and contact us today! Our goal is to help you find your new way of life in Andorra!