Active vs passive residency in Andorra: the cheaper way in, the harder way to stay
Since the February 2026 reform, active residency is the cheaper way into Andorra: a stake above 34%, EUR 50,000 to the AFA. The catch is 183 days.
Features writerSeptember 20267 min readAndorra has two main residence routes for wealthy newcomers, and the usual shorthand gets them backwards. Passive residency is sold as the premium product, active residency as the budget version. Since the February 2026 reform, active residency is the cheaper way in and the harder way to stay, and the hard part is your calendar, not your cheque.
Here is the short version. Active residency (residència i treball per compte propi) requires an Andorran company in which you hold more than 34%, a board seat and genuine control. When you file, you pay EUR 50,000 to the Andorran Financial Authority (AFA). Under Law 2/2026, in force since 13 February 2026, that sum is no longer a deposit but a non-refundable payment, returned only if the initial permit is refused. Permits are rationed: Decree 75/2026 opened 200, of which 150 are for the company route and 50 for liberal professionals. To renew, company owners must have lived in Andorra at least 183 days a year; tax residence starts above 183 days. Personal income tax and corporate tax both top out at 10%. The passive alternative now needs EUR 1,000,000 invested (EUR 400,000 through the Housing Fund), a further EUR 50,000 non-refundable, and 90 days a year.
How to get active residency in Andorra
- Reserve the permit. The reservation now comes before the company and opens a six-month window for the next three steps; miss it and the reservation lapses.
- Obtain foreign investment authorisation and incorporate. An SL needs EUR 3,000 of paid-up capital, a notarial deed and registration; your holding must exceed 34%.
- Take the board seat and actually run the company. The law requires effective direction and control, not a title.
- File and pay the AFA. The EUR 50,000 is due the moment the immigration application goes in. High-tech digital, entrepreneurship or innovation companies, and projects selected by a Government-recognised entity, are exempt.
- Prove a live business within three months. The company must hold a registered, active business; at renewal, activity is judged on the income it generated.
- Settle in. Bring a lease or deed, criminal record certificates and a medical check; after approval, register with your parish comú within three months.
The first permit runs for one year, renewable three times for two years each, then for ten-year periods.
The deposit that is no longer a deposit
Until February, the EUR 50,000 was a non-interest-bearing deposit held by the AFA. Law 2/2026 rewrote Article 38 ter of the immigration law: the money is now paid definitively and, once the permit is granted, passes to the State. Passive residency got the same treatment.
One conflict: in September 2026 the Government's J.1 procedure page still called it a non-remunerated deposit. The statute prevails. Only applications filed before the law was approved on 22 January 2026 keep the old rules.
Why 183 days is the real test
The active permit requires permanent residence, and the renewal procedure puts a number on it: company owners must show at least 183 days a year in Andorra, while liberal professionals must have lived and worked there permanently and effectively. Tax law separately makes you resident above 183 days in a calendar year, or if your main base of activities or economic interests is there.
My view: plan for 184 days and keep the evidence, because the two tests differ by a day. Renewal can be refused for lack of activity or residence, and two consecutive refusals bar a new self-employed application for twelve months. And the 10% only works if the country you left accepts that you left. A founder with a family home in Barcelona and a long weekend a month in the Pyrenees is not a hard case for a Spanish inspector.
What you pay, and what you keep
Capital committed is modest: EUR 3,000 of share capital, the EUR 50,000 payment, and incorporation and annual registry fees. Where passive residents buy private insurance, you contribute to CASS, Andorra's social security fund, as a self-employed worker from the day the activity starts; contributions scale with income, and renewal asks for your CASS record.
In return: personal income tax at 10%, with the first EUR 24,000 exempt and an effective 5% on work and business income up to EUR 40,000; corporate tax at 10%; dividends from Andorran companies exempt; no wealth or inheritance tax.
The housing squeeze
Every permit needs a lease or a deed. Buying is expensive: residents without three years of effective residence in the previous ten still count as foreign investors, need authorisation to buy, and pay foreign real estate investment tax of 6% within single-dwelling limits and 10% beyond, with units counted across related entities. Most newcomers rent first.
Active or passive residency in Andorra
Passive residency now requires EUR 1,000,000 in Andorran assets, or EUR 400,000 through the Housing Fund. Each property bought must take more than EUR 800,000, and financial instruments count for 36 months at most. Add EUR 50,000 non-refundable plus EUR 12,000 per dependant, income above three times the annual minimum wage, and no work in Andorra. Decree 74/2026 allows 163 such permits.
Active residency ties up a fraction of that capital and asks for your life instead. Employees of someone else's Andorran company need neither: theirs is the ordinary residence and work permit, under a separate quota.
Who this is actually for
Founders who will genuinely move and run a real business from Andorra: software, consulting, a trading desk with local staff. The company formation guide covers the corporate side.
It is wrong for anyone wanting tax residence without living somewhere, for a holding company with no activity, and for passport seekers: naturalisation takes 20 years and requires giving up your other nationality. If you have the capital and want a lighter day count, look at the passive route or Monaco. Senior employees rather than owners should look at Gibraltar's HEPSS.
The full, dated reference for this: Andorra: Active residency (Residència i treball per compte propi).
Frequently asked
What is active residency in Andorra?
Active residency, formally residence and work on one's own account (residència i treball per compte propi), is the Andorran permit for people who move to run their own business. Outside the liberal professions, you reserve a permit, obtain foreign investment authorisation, set up an Andorran company in which you hold more than 34%, sit on its administrative body and genuinely direct it. You pay EUR 50,000 to the Andorran Financial Authority when you file, and within three months the company must hold a registered, active business. To renew, you must have lived in Andorra at least 183 days a year. Decree 75/2026 caps these permits at 200.
Is the EUR 50,000 AFA deposit for Andorra active residency refundable?
Not any more. Law 2/2026, published on 12 February 2026 and in force from the following day, rewrote Article 38 ter of the immigration law so that the EUR 50,000 is paid to the Andorran Financial Authority on a definitive basis and is not refundable unless the initial permit is refused. Once the permit is granted, the AFA transfers the money to the finance ministry for the State. The Government's own procedure page still described it as a non-remunerated deposit in September 2026, but the statute prevails. Applications filed before the law was approved remain under the old rules, and qualifying technology projects are exempt from paying.
How many days a year must I live in Andorra on active residency?
At least 183 days a year if you hold the permit through your own company. The Government's renewal procedure requires company owners to show they lived in Andorra for a minimum of 183 days a year, while liberal professionals must have lived and worked there permanently and effectively. That is roughly double the 90 days passive residents commit to. Andorran tax law separately makes you resident if you spend more than 183 days there in a calendar year, so plan for 184 and keep the evidence. Renewal can be refused for lack of residence or activity, and two consecutive refusals bar a new application for twelve months.
What is the difference between active and passive residency in Andorra?
Active residency is for people who live in Andorra and run their own business there: a stake above 34% in an Andorran company, a board seat, a EUR 50,000 non-refundable payment to the AFA and at least 183 days a year in the country. Passive residency, residence without gainful activity, forbids working in Andorra but needs far more capital: since February 2026, EUR 1,000,000 in Andorran assets or EUR 400,000 through the Housing Fund, plus EUR 50,000 non-refundable and EUR 12,000 per dependant. Passive residents commit to 90 days a year, private health cover and income above three times the annual minimum wage.
What is the income tax in Andorra for active residents?
Personal income tax in Andorra is charged at 10%. The first EUR 24,000 is exempt through the personal minimum, and a bonus of half the tax on work, business and property income above that level, capped at EUR 800, gives an effective 5% rate on that income between EUR 24,000 and EUR 40,000. Corporate tax on your Andorran company is also 10%, and dividends from Andorran companies subject to corporate tax are exempt. There is no wealth tax and no inheritance tax, and IGI, the local equivalent of VAT, is 4.5%. None of this helps unless Andorra is genuinely your tax residence and your former country accepts it.
How long does Andorra active residency take, and is there a quota?
Plan on several months. You first reserve the permit, then have up to six months to obtain foreign investment authorisation, incorporate the company, take up your board role and file, and the business must be registered and active within three months of filing. Our planning range is three to eight months end to end, with bank onboarding often the slowest step. There is a quota: Decree 75/2026 of 11 March 2026 set 200 self-employed permits, 150 for the company route, 30 for liberal professionals and 20 for doctors, granted in order of filing, with nationals of countries holding an agreement with Andorra first, then EU and EEA citizens.
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