living in Andorra guide on residency relocation advice

On 4th January 2012 the Government finally announced proposals, and I stress they are only proposals for changing the passive residency scheme. One thing remains certain is that passive residency will continue, but there may be three different categories with different requirements. There is much debating ahead, laws to draft and approve and most likely any changes as proposed would require ratification by the Consittutional Tribunal which overseas laws which affect the exterior or may conflict with articles in the Constitution ( To wit, the last major proposals to the Immigration law on work permits took over 3 years to clear with the Tribunal). My opinion is that changes will take place, they will take up to two years (or more if the Tribunal has questions), and that any changes will result in higher investments required and more regulations and probably declarations of businesses and incomes.

So as 500 new places have recently been made available, if you are considering residency here, the old scheme is still available, but for how long remains the key question.

The Politicians charged with reviewing the current system of passive residency have now made public their party's proposals for changes. They are of the opinion that with these changes Andorra will become more prestigious, will be able to attract investors of a high callibre, "and continue to control who comes to Andorra, the least possible number of undesirables" (NO COMMENT HERE THESE ARE THE FACTS). This they opine will put Andorra at the same level of other places such as Monaco, Switzerland or the UK (LIKEWISE NO COMMENT).

They propose three categories of passive residency.

1) For those that are retired and do not have active work then they will be required to invest € 370.000 into Andorra, either in the form of immovable property or other asset investments. This is in addition to the € 30.000 bond which requirement has not been changed.

2) For those who do not have work inside Andorra but who do have busineses or employment outside Andorra, around the globe but who for reasons of the quality of life have chosen Andorra as a place to live. They will be permitted to undertake their business and "personal work" 85% outside Andorra, but they will remain outside the Andorran "labour market".

3) For those who are engaged in cultural, scientific or professional sporting activities, such as writers, novelists, poets,scientists perhaps who also have chosen Andorra as a base to live.

In respect of categories 1) and 2) They will be required to pay the same €30.000' bond as at present but without it seems the requirement to invest that extra € 370.000. Also it is proposed to reduce the minimum time required to be spent here from the current 183 days per year to 90 days. They also propose greater flexibility in the bureaucratic requirements for entry here.

I have been advising for some time that there was an ongoing review, this is what they are now looking at. The details are of course at this stage very vague, and certainly have not yet been debated nor the mechanics thought through.

We do know historically when they bought in the passive residents law that required a bond, those who were granted residency without the bond were told to pay. Some did, some left, some battled on with lawyers. Eventually the Government backed down and those who had not paid were still granted their passive residency, those who had paid were also granted residency but were not re-imbursed. The question is with these new proposals, what would be the position of existing passive residents. Legally you have been allowed residency under one law, I would suggest bearing in mind the previous fiasco that you will be allowed to continue as is. That does not stop them from trying though, so I will keep up to date on matters when more is announced.

As far as the "nouvingut" (newcomer, which may suggest that the new scheme would only apply to them) is concerned, it would seem the poor pensioner will be required to fork out an extra 370.000 investment, while the jet setting "high callibre" businessmen and the Charles Dickens aspirers only require the € 30.000 bond. At first glance it would appear best to be a novelist rather than retired, it only takes a few minutes to copy and paste in the form of a book with an online publisher and in 3 days be the proud owner in your physical posession of your first ( or perhaps 101st) novel, who's going to read it anyway?

On a more serious note the reference to 85% of business operations outside Andorra raises questions. Is this time spent, money spent/earned, and how in either case can this be monitored ? It smells of annual declarations and possibly the first hint of an overseas earnings tax, but that may be jumping the gun.

IN CONCLUSION......

None of these proposals can be rushed in, I have suggested it will be up to a couple of years or longer. I don't believe those who secure residency under the existing scheme will be affected, here are 500 new places available under the existing scheme, so those considering may wish to take the above into account when considering their own application.

As always the comments and opinions above are y own and are not intended to constitute legal advice.

The Government has recently announced a new quota of 500 places ( 1 place being a family unit regardless of the number within the family). The Quota has been issued under the same requirements as exist under the old quota. It should also be noted that the review of the system is being undertaken, so future changes in requirements are likely to be announced later this year. I will update this website as and when I have news. Meanwhile the extra 500 quota is good news for the continuation of the passive residency scheme

Just recently there has been a lot of activity in the all important passive residency applications room, coupled with this the actual issue of new residence cards is taking more than the customary 2-3 weeks, in one case nearly 7 weeks.

The reason ? I sumise that the level of activity is due to the anticipated review of the passive residency procedure! Figures, statistics and all the usual reports I believe have been called for from the political overlords in furtherance of a policy review....watch this space. On 16h November though I was informed that the extra activity was due to a broken computer !!!

Incidentally the other night was meet the politicians night, asking expats for views on residency. Nothing concrete was revealed, divulged, winked at or even really discussed, so rumours about rumours continue.

I was right, on the 4th January 2012 the Government announced its intentions to make changes to the passive residents scheme. I have outlined what is known in full.

On Monday 19th September 2011 Sr Antoni Martì the Head of Government outlined some major policy announcements that his Government were working on.

The most important matter that will concern passive residents and prospective passive residents is that the Government intends to review the procedure and to attract "wealthy individuals of high standing". That's not to say those that are here are the riff raff but it does sound rather Fawlty Towers with John Cleese bowing to Lord Melbor.

What is clear without a doubt is that a new quota for passive residents will be issued as the scheme is a lucrative source of income for the country. I have already opined that the current quota will run out some time in 2012, and it would appear that this review and a new quota will be in place for next year. In my opinion the reference to wealthy applicants is a straight-forward hint that the price of the bond will rise, possible substantially. It may be of interest to note that those seeking residence in Malta must now find a bond of €500,000. I am not saying that Andorra will follow, but in reality € 30,000 remains the cheapest residency on offer.

I have been privvy to a rumour today that the bond will be scrapped and all that have paid will get a refund. Before you all rush down to Immigration, I stress this is just another rumour amongst many, the whole process is under discussion and I will announce on this website as and when any concrete news comes to hand.

It is a policy flagship of this Government not only to open Andorra to foreign investment but to actively encourage it. There was a very half hearted effort by the last Government to allow 100% foreign ownership of companies in limited sectors. This has proved to be ineffective and beuracratic.

Just what this Government proposes we will wait and see. Presently my advice is not to start down the road of an Andorran company and to stay "offshore". Perhaps this raft of new regulations will serve to strengthen that opinion.