Expat Investment Advice in Andorra: Residency, Taxation and Real Estate

Andorra has evolved from a secluded mountain tax haven into a transparent, low-tax, and highly livable hub for international investors.

For expats, Andorra offers the opportunity to establish residency, safeguard wealth, and manage global investments under clear and predictable rules.

The country combines political stability, access to European markets, and a simple tax structure, offering personal and corporate rates capped at just 10%, no wealth or inheritance tax, and a strong financial system regulated under OECD standards.

This article gathers expat investment advice in Andorra regarding matters like how to obtain residency, how the tax system works, and what to expect when buying property, opening bank accounts, or running a business.

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The information in this article is for general guidance only. It does not constitute financial, legal, or tax advice, and is not a recommendation or solicitation to invest. Some facts may have changed since the time of writing.

How to Get Residency in Andorra as an Expat Investor

Expats can become residents of Andorra either actively, by working or running a business in the country, or passively, by investing a qualifying amount of capital and maintaining partial residence.

Both options can lead to full tax residency if you spend more than 183 days a year in Andorra or make it your main economic center.

Andorra Passive Residency Requirements 2025

Passive residency, often called investor or golden visa residency, requires a minimum investment of €600,000 in Andorran assets, which may include real estate, local securities, or government-approved financial instruments.

Applicants must also make a refundable deposit of €47,500 to the Andorran Financial Authority (AFA).

Lawmakers are currently considering raising the minimum investment to €800,000 or €1 million and restricting the share that can go toward property purchases.

Because of this, investors should maintain flexibility and keep additional funds available in case the new thresholds take effect.

Other conditions include:

• Proof of stable annual income sufficient to support yourself and dependents (usually around €40,000–€50,000).
• Comprehensive health insurance valid in Andorra and abroad.
• Clean criminal record from all countries of residence in the past five years.
• A minimum stay of 90 days per year in Andorra.

Passive residency does not grant the right to work locally, but residents may manage foreign investments or hold shares in Andorran companies.

This option is best suited for retirees, investors, and digital professionals who want tax efficiency and stability without the obligations of running an active enterprise.

Becoming a Tax Resident in Andorra

To qualify as an Andorran tax resident, you must either:

• Spend more than 183 days per year in Andorra, or
• Demonstrate that your economic or family interests are primarily located there (for instance, property ownership, business management, or dependent family members).

Once recognized as a tax resident, your global income falls under Andorra’s personal income tax (IRPF) system, which is capped at 10%.

Active residents contribute to the CASS public healthcare system, while passive residents are required to maintain private health insurance.

Andorra’s residency framework offers significant advantages: a straightforward tax regime, high quality of life, modern infrastructure, and close proximity to both France and Spain—all sans the bureaucratic complexity or high costs found in most European financial centers.

Andorra Tax System for Expats and Foreign Investors

Andorra offers one of Europe’s simplest and lowest tax regimes. The system is designed to attract residents and investors without the secrecy of traditional tax havens.

Taxes are transparent, easy to calculate, and capped at moderate levels, with no wealth, inheritance, or gift taxes.

Andorra Personal Income Tax

Residents are subject to personal income tax (IRPF) in Andorra, which ranges from 0% to 10% depending on income:

• The first €24,000 is tax-free.
• Income from €24,001 to €40,000 is taxed at 5%.
• All income above €40,000 is taxed at 10%.

Investment income such as dividends, interest, and capital gains is also taxed at up to 10%, but with various exemptions and allowances that can reduce the effective rate. For instance, small capital gains or savings income below €3,000 may be exempt in some cases.

This flat and predictable system makes Andorra especially appealing for entrepreneurs, investors, and retirees with foreign income streams.

Andorra taxes residents on worldwide income, but the low rates and clear rules make this easy to manage. Non-residents, meanwhile, are taxed only on income sourced within Andorra.

Corporate Tax in Andorra

Andorra’s corporate income tax is also capped at 10%, one of the lowest in Europe. Certain sectors or startups may qualify for reduced rates depending on activity and employment.

This makes the country especially favorable for entrepreneurs who register a company for international operations or consulting. Profits retained within Andorran corporations are taxed locally, but dividends distributed to residents are not double-taxed.

Real Estate Capital Gains Tax in Andorra

When selling Andorran real estate, non-residents pay a capital gains tax on profits, calculated on a sliding scale:

• 15% if sold within one year of purchase.
• 13% if sold within two years.
• 10% if sold within three years.
• Then reduced by 1% per year until reaching 0% after 12 years.

This progressive system discourages short-term speculation and rewards long-term investment.

Andorra has also signed a growing number of double taxation treaties (DTAs), providing relief from duplicate taxes for expats. These agreements currently include France, Spain, Portugal, Luxembourg, UAE, Malta, Liechtenstein, and several others.

A treaty with the United Kingdom was signed in February 2025, pending ratification.

Buying Property in Andorra as a Foreigner

Any foreigner, resident or non-resident, can purchase real estate in Andorra with prior authorization from the government. The process typically takes several weeks and involves confirming that the buyer has no criminal record and that the funds are of legal origin.

For many expats, purchasing property is also a convenient way to meet the passive residency investment requirement, as real estate counts toward the €600,000 threshold.

Since 2024, Andorra has introduced a progressive tax on foreign property investment under Law 3/2024 and Decree 76/2024.

This applies primarily to large-scale or speculative purchases by non-residents. The exact rate depends on property type and total value, but the measure reflects Andorra’s effort to balance housing demand with affordability for locals.

Lawmakers have also discussed tightening restrictions on using property as the sole qualifying investment for residency, so investors should plan for potential changes or diversify their Andorran holdings.

Property transactions involve:

• Transfer tax (ITP) of around 4% for second-hand properties.
• IGI (VAT) at 4.5% for new developments.
• Notary and registration fees usually under 1% combined.

These are paid at the time of purchase and are non-refundable. Foreign buyers typically pay in euros through Andorran banks, and all funds must be declared under anti-money-laundering regulations.

Opening a Bank Account in Andorra as a Non-Resident

Setting up a bank account in Andorra is straightforward if you meet documentation and compliance requirements, but expect more scrutiny than in larger EU jurisdictions due to strict anti-money-laundering laws.

Foreigners can open personal or business accounts in Andorra through one of the country’s private banks. Applicants must provide:

• A valid passport and proof of legal residence or address.
• Tax residence certificate from their current country.
• Source-of-funds documentation (such as bank statements, payslips, or investment portfolio summaries).
• In some cases, a reference letter from an existing bank.

Minimum deposits vary by institution. For non-residents, private banks may require €50,000–€100,000 as an opening balance, while smaller accounts may be available once residency is approved.

Andorra adheres to the OECD Common Reporting Standard (CRS) and the EU automatic exchange of information framework.

All banks are legally required to share account details such as balances, dividends, and interest with the client’s home tax authority annually.

This means Andorra no longer offers banking secrecy. However, for compliant investors, it provides stable, legitimate access to European financial markets without reputational risk.

Starting a Business in Andorra as a Foreigner

Andorra allows 100% foreign ownership of local companies, and the registration process is efficient by European standards. The country encourages small business activity and entrepreneurship, particularly in technology, consulting, and professional services.

The most common structure is the Societat Limitada (SL), equivalent to a private limited company. It requires:

• Minimum share capital: €3,000 (fully paid upon incorporation).
• Registered address in Andorra.
• At least one director, who can be a foreign national.
• Foreign investment approval from the government before registration.

After approval, the incorporation deed is notarized, capital is deposited in a bank account, and the company is entered into the official registry. The process typically takes one to two months.

Entrepreneurs who manage or own their company locally must register with CASS, the Andorran social security and healthcare system.

Contributions are based on the country’s average wage or about €2,560.99 per month and total roughly 22% (including retirement and healthcare components).

While CASS contributions add to costs, they grant access to the national healthcare network and qualify residents for long-term benefits.

Managing Foreign Companies from Andorra

Expats can manage foreign or holding companies from Andorra, but tax residency and substance rules apply. Authorities assess where key management decisions occur to determine whether profits should be taxed locally.

Maintaining proper documentation such as meeting minutes, contracts, and Andorran address records is essential for compliance.

Setting up a company in Andorra can therefore serve two purposes: it fulfills active residency requirements and provides a tax-efficient structure for consulting, e-commerce, or digital services aimed at European markets.

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