In recent years, Andorra has become an increasingly attractive tax destination and, as a result, more and more people or entrepreneurs are looking to become residents in Andorra.
This small principality offers a favourable tax regime, with a maximum personal income tax rate of 10% and a corporate tax rate of 10%, which makes it one of the most competitive options in Europe. In addition, Andorra does not apply wealth or inheritance taxes, making it the ideal place for those seeking to optimize their income and protect their wealth.
In addition, the diversity of profiles interested in tax residency in Andorra is increasingly wide. From businessmen and entrepreneurs looking to establish their businesses in a tax-favorable environment, to independent professionals, investors or retirees who wish to benefit from its low tax burden and improve their quality of life.
Andorra also attracts families and elite athletes, who value its security, quality health services and natural environment. Thus, Andorra presents itself as a strategic option for those seeking to improve their fiscal and personal situation.
Table of contents
ToggleWhat is tax residency?
Tax residency is the legal status that determines in which country a person or company is obliged to pay taxes on its income and assets. It is defined according to factors such as the number of days you spend in a country, the location of your centre of economic interests or your usual domicile.
Being a tax resident in a country implies that you must comply with your tax obligations, which include reporting and paying taxes.
The tax residency status may change if the requirements of another country are met, which could generate tax benefits or advantages.
What types of residence permits are available in Andorra?
Before diving deep into the requirements to obtain tax residence in Andorra, we must differentiate two concepts that are often confused: administrative residence and tax residence. The administrative residence is granted by the competent immigration authorities; on the other hand, the tax residence is not acquired in parallel but is consolidated once a series of requirements in the current tax legislation have been fulfilled.
There are different modalities to obtain administrative residence, which we can group into active residence or passive residence.

Active residency
The active residence includes employees and the self-employed or entrepreneurs.
The work residence (when you work for someone) is obtained by means of an employment contract. This type of residence requires living and working in Andorra.
We can also find the independent residence, which requires the development of an economic activity by means of the creation of your own company in Andorra. In this case, the minimum stay required is 183 days spread over a calendar year and a deposit of 50,000 euros with the Andorran Financial Regulator (AFA), which can be made with any bank in Andorra.
This modality is similar to the figure of the self-employed in Spain. It is important to take into account that it is required to be the administrator of the company, to have more than 34% of its shares and to contribute to the Andorran social security. In short, this is the model par excellence to set up a business in Andorra.
Passive residency
Within the passive residence, we can find retirees, people with passive income or entrepreneurs. It is also known as non-profit residence, and requires an investment in the territory of 600,000 euros in real estate, shares in an Andorran company or investment in financial products, from which a deposit of 47,500 euros must be deducted before the Andorran Financial Regulator (AFA) and a sum of 9,500 euros for each dependant. For this typology, it is only required to reside in Andorra 90 days a year.
In general, since the passive residence does not contemplate any economic activity, it is usually recommended for those who are already retired and wish to manage their patrimony from Andorra, thus being able to benefit partially or totally from the advantages of being resident in this principality.
Requirements to change the tax domicile to Andorra
The criteria to consider someone a tax resident in Andorra are governed by the general rules of the OECD, approved in the Principality and duly reflected in the Andorran Personal Income Tax Law.
Among the requirements we can find certain eligibility criteria and the necessary documentation to apply.
Eligibility criteria
The legislation establishes that a person will be considered a tax resident in Andorra if he/she fulfils the following three points.
- If you reside more than 183 days in the country, taking into account that the days in which you travel to other territories are also computed.
- Your centre of economic interests is located in Andorra, that is to say, your main economic income comes from the principality.
- Your core family interests or your centre of vital interests in case you are married are in the country, or you have dependants in Andorra.
Required documentation
There are eight different categories of data that you must collect before applying for residency in Andorra.

- Application form for tax residency, at the Andorran Migration Agency.
- Proof of residence in Andorra, something that certifies your domicile in this country, such as a rental contract or a property deed. This document will prove that you reside in Andorra more than 183 days a year.
- Valid passport, which must be in order and valid for at least six months from the date of entry into Andorra.
- Proof of income, to demonstrate that you have sufficient means to live in the country. This may include:
- Bank statements of your accounts in Andorra or abroad.
- Documentation of income such as salary receipts, rent or any other source of income you receive. If you own a business, you will also need to submit profit certificates or an income statement.
- In some cases, they will require a minimum balance in an Andorran bank account to prove that you can financially support yourself in the country.
- Health insurance that covers your needs, either private or public, if you are registered with the Andorran Social Security Fund.
- Criminal record certificate from your country of origin and Andorra. This document must be legalized and with the Apostille of The Hague and cannot be valid for more than three months from its issuance.
- Form 720, a form to declare assets abroad, which must be submitted to the Andorran tax authorities. If you are a tax resident in Andorra, you may be required to submit information about your assets and property abroad.
- In many cases, a certificate of non-tax residence in your home country may be required to prove that you are no longer considered a tax resident there.
How is the administrative process to apply for tax residency?
Applying for tax residency in Andorra is a process that implies several steps, from the collection of documentation to the submission of the application to the Andorran authorities. Below, we detail the administrative process step by step.
How to submit your application: step-by-step
Once you have gathered all the necessary documents to apply for residency in Andorra, you will need to submit the application to the migration department of the Government of Andorra, which is the entity in charge of processing all residency applications. You can do this in two ways:
- Online application: through the official portal of the Andorran government, although in some cases, they may require you to physically attend their offices to complete some formalities.
- Physical submission: at the offices of the migration department in Andorra la Vella, where you will hand in all the documentation mentioned above together with the completed form.
Estimated timeframes for obtaining residency
The process for obtaining residency in Andorra may vary depending on the type of residency you are applying for and the specific details of your personal situation. For example the amount of documentation required and whether you have to submit any additional proof. However, in general, the evaluation of the application can take between 4 and 6 weeks. The estimated deadlines for the different types of residency in Andorra are:
- Active tax residence (workers and entrepreneurs): 2-4 months.
- Passive residence (investors and pensioners): 3-6 months.
- Residence for investment (golden visa): 2-3 months.
- Residence for entrepreneurs (SMEs and startups): 3-5 months.
- Deadlines for the types of Residence in Andorra

What is the minimum time of residence?
The minimum time of residence in Andorra to be considered a tax resident is 183 days per year. This is the key criterion that determines whether you are a tax resident in Andorra or not, the main threshold that defines your tax residence, regardless of whether you are a full or part-time resident.
Persons with an active residence must meet the minimum 183 days of residence in this country and, in addition, must be registered in the Andorran Social Security Fund (CASS).
On the other hand, persons with passive residence, even if they are not actively working in Andorra, must maintain a minimum of 183 days of physical residence in the country.
What are the tax advantages of residing in Andorra?
Being a resident in Andorra gives you tax advantages that you would not have in in many European countries because taxes in Andorra are considerably lower. This makes the Andorran principality a very attractive tax destination. With a maximum personal income tax rate of 10%, a corporate tax rate of 10% and the absence of wealth and inheritance taxes, residing in Andorra allows for significant tax optimization. These advantages, together with the high quality of life, make Andorra an ideal choice for entrepreneurs and investors.
Income Taxes
Income taxes in Andorra are at a very low rate. Personal income tax is considerably lower than in many other countries. The maximum rate is 10% on personal income, one of the lowest figures in Europe.
In addition, although the tax rate is low, Andorra’s personal income tax system is progressive, being applied as follows:
- Up to €24,000: 0%.
- Between 24.000 € and 40.000 €: 5%.
- From €40,000 and above: 10%.
This system benefits those with moderate or high incomes, since the tax rate does not exceed 10%.
Wealth and Inheritance Tax
There is no wealth tax in Andorra, which means that you are not directly taxed on the value of your personal assets, such as real estate, financial investments or any other assets.
As for inheritance and gift tax, Andorra also has advantages, as it does not apply a significant tax in these cases, which facilitates the transfer of assets to heirs.
Benefits for investors and entrepreneurs
Andorra offers tax advantages for entrepreneurs wishing to establish a company or startup in the country. Investors or entrepreneurs residing in Andorra can benefit from a 10% corporate tax rate and relatively low costs when starting a business. This makes Andorra a very competitive place to set up and run businesses.
In addition, there are government incentives that encourage foreign investment, such as tax exemptions and facilities for the creation of new companies in sectors such as tourism, technology and finance.
If you are a resident of Andorra and have investments abroad, such as shares or investment funds, you are generally not required to pay taxes on those assets in Andorra, as there is no wealth tax or double taxation on international investments.
In addition, Andorra has agreements with some countries to avoid double taxation, which facilitates the tax optimization of investments in other countries.
Cost of living in Andorra vs. EU
Generally speaking, Andorra tends to be an attractive destination for its tax benefits and quality of life, although some aspects of the cost of living can be higher than in other areas throughout Europe.
This is largely due to the cost of housing, a scarce commodity in Andorra, given its small land area, compared to other countries in Europe. In January 2024, the average purchase price per square meter reached 4,582 euros, according to data from Idealista.
On the other hand, the cost of the shopping basket may be slightly higher than in surrounding countries, although the differences are not very significant. However, typically expensive products, such as tobacco or alcohol, are much cheaper, mainly due to the absence of taxes on their price.
Gasoline deserves a whole other chapter, which is still much cheaper than in other countries, despite the escalation of prices linked the rise of crude oil. This also impacts transportation, making it significantly cheaper than in Spain and other countries in the region. Additionally, purchasing and maintaining your own vehicle is also cheaper than in the rest of the Peninsula.
In short, although certain aspects of the cost of living in Andorra make it a more expensive option than Spain and other countries in the region, the tax advantages enjoyed by the principality compensate for this difference and make it a more than recommendable destination to reside.
Can I have tax residence in Andorra and live in my country?
Yes, it is possible to have tax residency in Andorra and live in another country, but this scenario involves certain tax risks and legal conditions that you must take into account to avoid problems with your country’s Tax Agency.
You can be considered a tax resident in Andorra if you meet the residency requirements, which include living more than 183 days a year in the country or having the effective address of your economic activity in Andorra, i.e., having your centre of economic and personal interests in Andorra.
The main risk of living abroad and having your tax residence in Andorra is that your country’s tax authorities could consider that you are actually a tax resident there.
This would happen if they prove that your centre of economic and family interests is in your country, which would contradict your tax status in Andorra. If that happens, you should comply with your country’s tax obligations, which implies paying taxes on your worldwide income, no matter where you generate it.
To minimize risks, make sure you have clear proof of your residence in Andorra such as documents or contracts, and of the place where your economic and family interests are actually developed. Otherwise, you could face problems with double taxation and fiscal obligations in both countries.