Passive Residency in Andorra

Passive Residency in Andorra

Unlike many countries in Europe, Andorra offers a unique pathway to residency — passive residency. This program is designed to offer visas to those wishing to become residents in the country, without spending the majority of their time within its borders. 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 become a permanent resident once you secure a passive residency permit; well, not technically. Each permit is granted for two years. After that, it is renewed for another 2 years and so on until you reach 20 years of residency. Once you have reached 20 years of residency, you can apply for citizenship.

 

Confused? Don’t be — we’re here to help. Read on as we’ll break down the different types of passive residency in Andorra and walk you through the 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 a clean criminal record and police certificates from your country of origin.

 

Income and Bank Certificates: You will need to provide a steady source of income and some form of private health insurance. Your personal income level must be at least 300% the average minimum salary for an Andorran resident, which is currently €12,999.96. If you plan on moving with a family, the same rules apply to each family member.

For example, If you have a family of four and three of those members are dependents, you would need to show an income of €77,999.76 — that’s €5,000 more per dependent.

 

Investments: To obtain a passive residency, you will need to make an investment of €50,000 via a government bond, in addition to other investments.

 

Age Requirements: Each applicant must be over 18 years of age.

 

Proof of Accommodation: Your residency application needs to be backed by a proof of accommodation. This could be a rental property that you’ve acquired for temporary accommodation.

 

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

 

Types of Passive Residency in Andorra

 

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

 

Additionally, each may boast its own unique benefits. Let’s take a look at what type of passive residency Andorra currently offers.

 

Residency Without Lucrative Activity

 

Okay, the name is long and intimidating, but residency without lucrative activity is 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 €400,000, including the €50,000 with the government.

 

Even once you obtain this visa, you are not yet considered a true tax resident. You need to spend at least 90 full calendar days per year in the country. If you spend 183 days or more in the country, you will become a fiscal resident and will be liable for income tax. Additionally, you will need to meet that standard of earning 300% the minimum Andorra salary mentioned above.

 

Once you do apply 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 do prefer to rent, you can invest through many other mediums. Ways in which you can reach the €400,000 investment threshold include:

 

  • Investment accounts
  • Shares in Andorran companies
  • Investments in the property market
  • Public bonds

 

As mentioned above, the government does not care so much about how you invest, so long as you meet those 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 formally create 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 and all required documents. You must have experience with the business you are planning to create.

 

Most people prove business acumen and experience by submitting a resume. 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 7-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 €50,000 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.
  • Reputable recommendations from fellow peers.

 

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

 

Proof of Insurance

 

As mentioned earlier, 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 medical insurance. That means you probably don’t hold medical or old-age insurance. We can absolutely assist with arranging this insurance, but to give you a price guide, local insurance companies will charge around €1,250/year for all 3 types of coverage.

 

Differences Between Passive Residency and Active Residency

 

As you may or may not know, 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 being within the country. Active residency is reserved for individuals who want to live and work in 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 do 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 when they are an active resident? Let’s break it down below.

 

Duties include:

 

  • Being enrolled in Andorran healthcare and social security
  • 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 often you want to live and work in the country.

 

Acquiring Andorran Citizenship

 

Becoming an official citizen of Andorra is not easy. The only way to do this is via residency, followed by naturalization, i.e., if you’ve resided in the country for over 20 years as a resident. This duration is reduced in two scenarios — 10 years if you graduate from an Andorran university; 3 years if you’re married to an Andorran national.

 

However, if a child is born in Andorra, they can obtain citizenship so long as their parents were Andorran citizens at the time of birth. If that’s not the case, the child can naturalize after 10 years.

 

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. International banks, exceptional healthcare and education, low-taxes, 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 weather-appropriate 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, along with a thriving après-ski scene.

 

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

 

Need More Information?

 

One thing to consider when applying for passive residency is additional documentation that may be necessary. Certain EU countries do require extra documentation to apply. These countries include Poland, Bulgaria, Czech Republic, Latvia, and Romania. Failure to provide extra information can prevent you from receiving a residency or making the process more difficult. 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!