Passive Residency in Andorra: Key Aspects of the New €50,000 Deposit for 2027
The landscape for international high-net-worth individuals seeking to establish themselves in the Principality is rapidly changing. The approval of what is administratively known as the "omnibus law" has introduced substantial modifications for those opting for passive residency in Andorra, a program that traditionally required a real estate or financial investment and a refundable deposit with the AFA.
Starting next fiscal year, the rules of the game will include a direct cost that will definitively impact the planning for new non-lucrative residents. The Andorran Ministry of Finance estimates an additional €13 to €14 million in revenue derived solely from this new non-refundable fee. What are the real implications of this for your relocation strategy?
Key Updates in 1 Minute
- The Non-Refundable Deposit: Applicants for passive and self-employed residency must pay a non-refundable €50,000.
- Impact on Public Coffers: This measure accounts for almost the entire growth in government revenue from fees for 2027.
- Growth in Direct Taxation: Andorra will triple direct tax collection compared to 2023, reaching €300 million.
- Stable Taxes: Despite the increase in overall revenue, the general tax rates for personal income tax (IRPF) and corporate tax (Sociedades) remain unchanged.
The New Fee Structure for Non-Active Residents
Until now, applying for passive residency in Andorra involved a significant capital outlay, but most of the money remained under your ownership as a recoverable deposit if you decided to leave the country. The new scheme introduces a mandatory fee of €50,000 that the Andorran State will permanently retain as administrative costs and compensation for infrastructure use.
Official budgetary forecasts confirm that revenues from the fees department and other concepts will rise from the €41.7 million projected for 2026 to exceed €55.5 million in 2027. This almost mathematical increase of nearly €14 million directly corresponds to the expected quota of new passive residents who will pay this entry fee.
"Revenue from fees will experience the highest proportional growth in the entire Andorran budget, driven by the new requirements of the omnibus law for passive and self-employed profiles."
This regulatory change aims to more selectively filter the profiles of individuals establishing themselves in the country. The Andorran Government seeks a sustainable growth model, prioritizing the arrival of capital that genuinely adds value to the local economy, rather than purely nominal residencies.
Comparison of Tax Collection in Andorra (2026 vs 2027)
The Principality’s financial health is robust, and this new non-refundable deposit is not an isolated measure but part of a broader fiscal restructuring aimed at the country’s economic resilience.
| Tax Item | Forecast 2026 | Budget 2027 | Estimated Increase |
|---|---|---|---|
| Passive Residency Fee (Fees) | 41,7 M € (Total Fees) | 55,5 M € (Total Fees) | + 33% (Driven by deposit) |
| Direct Taxation (Total) | ~256 M € | 300 M € | + 17% |
| IGI (Andorran VAT) | 197 M € | 206 M € | + 5% |
| Personal Income Tax (IRPF) | ~94 M € | 99,3 M € | + 5% |
The trend of taxes in Andorra continues to show extraordinary growth. Direct taxation will have almost tripled in the last four years, rising from €115 million in 2023 to €300 million projected for 2027, which reflects the dynamism of the Principality’s economy without the need to increase nominal tax rates.
Andorraway’s Analysis: How Does This Affect Your Relocation to Andorra?
Many of our VIP clients ask us: Is non-lucrative residency still worthwhile with this new €50,000 entry barrier? The short answer is yes, but it requires a careful analysis of your asset structure before making a hasty decision.
For high-net-worth individuals, a one-time transactional cost of €50,000 remains highly competitive compared to the high tax pressures in neighboring countries like Spain, France, or Germany. However, for intermediate profiles or digital entrepreneurs, this modification necessitates evaluating alternative routes, such as active self-employed residency, which requires a different operational involvement but avoids this non-refundable payment.
Just a few weeks ago, a client from Northern Europe with a substantial investment portfolio approached us with doubts about whether they would qualify in time before the full implementation of the new omnibus law criteria. During the audit process of their assets, we detected that their international corporate structure presented banking compliance complexities that would have delayed their application through standard channels. Thanks to our 360º comprehensive advisory approach, we reorganized their banking documentation under Andorran standards, allowing them to efficiently consolidate their residency application.
Do you have questions about which type of residency best suits your current financial situation under the 2027 regulatory framework? At AndorraWay, we help you design the optimal strategy to mitigate regulatory risks and ensure a secure asset transition.
If you want to assess the feasibility of your residency under these new conditions, let’s analyze your relocation case without obligation and prepare your arrival in the Principality with complete legal certainty.