The requirements for passive residents in Andorra are about to undergo a significant transformation. The Principality, known for its attractive tax regime and exceptional quality of life, is updating its legislative framework to ensure sustainable growth and attract more established investors. As part of the well-known ‘Omnibus Law 2’, the General Council has agreed to raise the minimum investment required to obtain non-profit residency, among other notable changes that will affect future residents and self-employed individuals wishing to settle in the country. If you are considering living in Andorra, it is essential to be aware of these new conditions to plan your move successfully.
Why is Andorra modifying its immigration requirements?
The Andorran government aims with these measures to consolidate a balanced and sustainable economic growth model. The high demand to reside in the Principality, driven largely by its advantageous tax system and safety, has exerted pressure on sectors such as real estate. With these adjustments, the goal is to attract investment profiles that provide greater added value to the country, ensuring that Andorra’s development remains compatible with preserving its environment and the quality of life of its citizens.
These legislative modifications reinforce Andorra’s image as an exclusive and well-regulated destination, which values the real contribution of new residents to the local economy. The objective is not to close doors but to organize the arrival of new inhabitants and ensure their impact is positive for Andorran society as a whole. To understand the full context, it is useful to know the taxes in Andorra and how they influence the decision of many to relocate their residence.
Increase in Investment for Passive Residents in Andorra: 1 Million Euros
The most prominent change in the new regulation directly affects applicants for passive residency in Andorra. The mandatory investment in Andorran assets, previously set at 600,000 euros, will be raised to 1,000,000 euros. This €400,000 increase represents a significant tightening of conditions and seeks to attract investors with greater purchasing power and a stronger commitment to the country.
What can you invest in to obtain passive residency?
The law maintains flexibility regarding the types of assets where this investment can be made. Applicants for residency as passive residents in Andorra will continue to have options to meet the one-million-euro requirement. Below are the available alternatives:
- Real estate: Purchase of one or more properties located within Andorra.
- Shareholdings: Investment in the share capital of Andorran companies.
- Public debt: Acquisition of bonds or debt securities issued by the Government of Andorra.
- Financial instruments: Investment products issued by financial entities based in the Principality.
- Unremunerated deposits: Leaving the required amount in deposit with the Andorran Financial Authority (AFA).
Special conditions for real estate investment
While diversification of investments is permitted, the new law introduces a specific condition for those choosing the real estate sector as their main investment vehicle. To qualify to obtain passive residence through property purchase, the property must have a minimum value of 800,000 euros. This means that if an investor decides to allocate capital to buying a home, it must cost at least this amount. This measure aims to discourage speculation in the mid-low segment of the real estate market and steer foreign investment towards high-value properties.
New Conditions for Self-Employed Residency
The ‘Omnibus Law 2’ not only affects passive residents in Andorra but also those seeking to obtain residency in Andorra to work independently. The deposit that self-employed individuals must make with the Andorran Financial Authority (AFA) will also be increased.
The new fixed amount for this deposit will be 50,000 euros. This deposit acts as a guarantee for the administration and, although part of it remains refundable at the end of the residence, the increase aims to ensure greater solvency and commitment from new entrepreneurs establishing themselves in the country.
Stricter Penalties for Irregular Family Reunification
Another area where legislation becomes more stringent is in family reunification. The government aims to curb fraudulent attempts in this process by establishing much harsher consequences for violation of regulations.
Until now, irregularities in family reunification could result in the annulment of the permit for the improperly reunited person. Under the new law, the consequences will be severe: if irregular reunification is detected, not only will the permit of the affected family member be annulled, but the entire family nucleus. This includes the main permit holder, who will have to leave the country along with all their dependents. This measure underscores the importance of carrying out all immigration procedures with maximum rigor and transparency, preferably with the support of experts to avoid mistakes with irreversible consequences.
How Do These Changes Affect Your Plans to Move to Andorra?
These legislative changes outline a new landscape for those aspiring to reside in Andorra. The Principality positions itself as a more demanding destination, prioritizing quality and sustainability over quantity. If you were considering becoming a passive resident in Andorra, you will now need an initial investment capital of one million euros.
Planning becomes more crucial than ever. It is essential to stay updated on legislation and understand all details before starting any procedures. Timelines, permitted asset types, and specific conditions for each residence type are aspects that require careful analysis.
We Help You Manage Your Residency in Andorra
In a constantly evolving legislative environment, professional advice is your best guarantee of success. At Andorraway, our team of experts is always updated on legislative changes to provide you with clear and precise guidance throughout your relocation process.
If you wish to obtain passive residency or any other permit to live in the Principality, we will help you navigate the new requirements, ensuring your application complies with all conditions and is processed efficiently. Do not let the complexity of the new law hinder your project. Contact us and we will accompany you every step of the way to make your move to Andorra a reality.