Introduction
Passive residency in Andorra: the government proposes raising the required amount to obtain this permit to €800,000 and also increasing the minimum property purchase price for this purpose. If you’re considering passive residency in Andorra because you plan to move, invest, or start a project from outside, these changes are relevant: they alter investment options, the real estate market, and administrative conditions.
Summary of the measure and context
The continuity and consolidation law project for sustainable growth modifies requirements in effect since 2022. The minimum required investment for passive residency, which had increased from €400,000 to €600,000 (with the sustainable growth law), is now raised to €800,000. Additionally, the project states that if the investment is in properties, the minimum price per unit must be €800,000.
Practically, this means that passive residency in Andorra is increasingly oriented towards high-value investments, with the declared goal of avoiding pressure on the supply of affordable housing.
What investment options are considered?
According to the government text, the required investment for passive residency in Andorra can be made through various instruments. Options include:
- Andorran government bonds.
- Share capital of Andorran companies.
- Non-interest bearing deposits with the Andorran Financial Authority (AFA).
- Financial products or debt instruments issued by local banks (new addition).
- Acquisition of real estate, provided each unit exceeds €800,000.
The inclusion of banking products and debt instruments broadens the alternatives compared to the previous version, offering more financial options for those seeking passive residency in Andorra without investing everything in real estate.
Why does the threshold increase to €800,000?
The official argument is to protect the market for habitual and affordable housing, preventing demand linked to passive residency in Andorra from driving up prices in segments accessible to residents with jobs or locals. By raising the requirement and the minimum per property unit, the aim is to focus related purchases on high-value properties, reducing the impact on more affordable housing.
Impact on the real estate market and for those wanting to move
For those planning to move to Andorra or invest in properties, the medium-term effects could be:
- Less pressure on the affordable housing segment if the law remains unchanged.
- An increase in demand in the luxury segment (higher-priced apartments and chalets), which could raise prices in that niche.
- Greater interest in financial alternatives to meet the investment requirement of passive residency in Andorra (deposits, debt, and share capital), especially if purchasing properties above €800,000 doesn’t suit the investor’s strategy.
If your goal is to obtain passive residency in Andorra through property purchase, this change alters the feasibility calculation: you’ll need a larger budget or consider other investment routes provided by law.
Advantages and disadvantages for potential residents
Advantages
- Protection of the affordable housing market for residents with jobs and locals.
- Additional financial options to diversify the required investment.
- Greater clarity in regulations regarding the minimum per unit if investing in real estate.
Disadvantages
- Higher entry cost for passive residency in Andorra, which may exclude smaller investors.
- Risk of increased costs in the luxury segment.
- Possible uncertainty until the Parliament processes and approves the project, with a risk of changes in figures or conditions.
Steps to take if you’re interested in passive residency in Andorra
If you’re considering applying for passive residency in Andorra, it’s advisable to plan ahead and evaluate all options covered by the new legal wording:
- Review the investment method that best fits your profile: purchase of properties over €800,000, investment in government bonds, or banking instruments.
- Contact tax and legal advisors in Andorra to simulate scenarios (taxes, related costs, and timelines).
- Assess the cost of living and services in the principality to estimate the total budget: consult practical guides on cost of living in Andorra and how it is living in Andorra.
- If you decide to change your residence, organize logistics in advance: explore resources for moving management and necessary homologations like your driver’s license (exchanging your license).
For tax matters and investment structuring, consult information on taxes in Andorra and, if you have specific questions, contact specialists via our contact page.
Timeline and next parliamentary phase
The approved text by the government will be forwarded to the Parliament for processing. During parliamentary review, amendments and changes may be introduced: the final figure for passive residency in Andorra or associated requirements could be adjusted. Therefore, if you’re in the process or about to start procedures, it’s advisable to monitor the project’s progress and not assume the final version until the Parliament approves the law.
Practical recommendations
- If seeking passive residency in Andorra for housing, consider real budgets above €800,000 and study the market in specific areas.
- If not wanting to concentrate the investment solely in one property, consider financial instruments or share capital of Andorran companies as alternatives to meet the investment requirement.
- Seek tax advice to optimize taxes and understand ongoing obligations after obtaining residency.
- Use local sources and services to plan your move and services (healthcare, education): for example, review healthcare system and education in Andorra if moving with family.
Conclusion
The rise to €800,000 marks a significant shift in Andorra’s passive residency policy: it tightens the investment threshold and restricts real estate options to high-value units. For those considering passive residency in Andorra, the key is to inform yourself as soon as possible, analyze alternative investment options, and plan with professional advice. If you want support evaluating specific options and organizing your move, visit our residence in Andorra section and contact us through our contact form.