Andorra Residency by Investment, how do I invest?
Category A - Summary of the passive residency by investment option
This category of residency is the most straight forward of all the categories and if the total investment of € 600,000 in permissible investments (please see below) is not a concern for you then this is the way forward. Please note that as a passive resident in this category you are not necessarily a tax / fiscal resident as you are required on paper ( and time here is not monitored) to spend a minimum of 90 days per year. To become liable as a tax resident you are required at least on paper to spend more than 183 days per year so with careful planning you are most likely to be exempt from personal tax in Andorra. You can also choose to become a fiscal resident if that is what you require, regardless of how long you actually stay here as time spent here or not spent here is not monitored.
In this category most people in effect face a choice of passive residency with or without the "fiscal". For those requiring fiscal residency then Andorra provides a low tax country for that option. Over the coming years if the plans of the OECD, EU and other organisations are to come to fruition and everybody on this planet at some stage will require to become a fiscal resident and tax payer of a specific country .
Please also note that Category A also allows you to have an Andorran Company provided it is not trading or active in Andorra, a holding company for example, so that also opens a few options. Whether you need tax / fiscal residency or not Andorra Category A passive residency can offer interesting options.
For applicants under Category A the applicants must provide:
From outside Andorra:
- Apostillised/Legalised Police certificates from your country of birth, country of current passport and in some cases the country of your last residency before Andorra. Some personal circumstances can be complicated but I can guide you through all of the obtaining and verification of correct stamps both with my database of records and client's documented experiences and with those at Immigration. This will be one of the first areas we will need to discuss. Please note the new and current regulation that requires all police certificates to be clean and that they will not accept any certificate that is not regardless of the severity or the date of the conviction.
- Apostillised/Legalised proof of civil status. This will be a marriage certificate, divorce certificate or a single declaration form as appropriate, again we can secure these documents often very easily.There are further restrictions on documents validity which we again will discuss.Civil Unions and partnerships now may also be recognised. You should note that Immigration does not recognise the status of "partner" nor fiancé (e). As an unmarried couple you can apply together and live together but you will be required to pay the single bond each of € 47,500. (Once married or a civil partnership carried out in Andorra you can apply for the refund as you would have paid € 57,000 together as a married couple)
From inside Andorra:
- Proof of private medical insurance valid for Andorra. You will require private medical insurance to satisfy the Immigration requirements for medical coverage in Andorra. The wording of the specific declaration that they require though contains THREE separate insurances and the translation from Catalan causes problems. In effect you require three insurances, namely medical, incapacity and old age. The latter causes the main problem in that insurance against old age simply does not exist. In this latter two policies, they are requiring all residents between the ages of 18 and 60 to have these extra covers. Incapacity is quite straight forward and may well be covered in by a medical insurance policy but old age will not be. For this final category of insurance, they require proof of a pension plan, and proof that is by having signed the pre-mentioned Immigration declaration that simply refers to insurance against old age! We can obtain all of these policies in Andorra where the declaration is guaranteed to be signed and the cost for all three insurance will start at around 1,400 euros annually. Please note that the pension plan portion of the insurance is fully refundable with profits at your 60th birthday. Residents under 18 and over 60 years old only require health insurance. If you have existing medical cover from an International insurer it may be possible to use this for medical and incapacity but Immigration are now making this very difficult administratively, it is best to speak to me first.
- Show proof of sufficient means to support yourself and family. This is currently proven by bank certificate of 300% of the minimum salary and 100% additional for each dependent, this involves opening a local account and depositing the required funds currently (From January 2023) € 46,300.68 and € 15,433.56 for each dependent (including ALL children regardless of age). You are not required under this category or any other category to prove the actual source of income to Immigration.
- Proof of a rental contract or title to a property that complies with Immigration requirements. Under the additional investment requirement (see below) an applicant has 7 months in total from the date of the application to prove the additional investment. This means that if an applicant chooses to purchase property he must submit the "compromis de compra-venda" (purchase agreement) to Immigration, he has one year to then produce title deeds to the property. Alternatively an applicant may rent a property and invest the required investment in Andorran financial instruments under this Category. Please note that a rental contract must now be in the name of the principal applicant only. As husband and wife this has created problems but it must be in the principal applicant's sole name.
- Sign an undertaking that they will reside for a minimum of 90 days per year in Andorra.
- Pay to the Government AFA (after the above documents have been accepted) a non-interest bearing deposit (fully refundable upon departure) of €47,500 for the head of household and €9,500 for each dependent,
- Pay to the Government (Immigration) € 2,500 plus € 500 for each initial issue of the residency card on approval
- That they sign an undertaking at the time of application that within six months of the approval for residency that they will submit documentary proof that, including the amount paid for the Government deposit that they have invested a minimum total amount of €600.000 in Andorra in the permissible categories of investments. Please scroll down for details of permissible investments in ths category.
If you intend relocating with children, please see my section for relocating to Andorra with a family. where extra documents are required in support of children's application.
The residency is granted initially for a period of 2 years, then for 2, 3 and then every 10 years. At renewal you do not have to be present, the documents required are obtained locally and the process is quite straightforward providing no changes have been arbitrarily made by the resident to areas such as insurance and banks without first seeking my advice.
If you are a national of any of the former Eastern European States (Eastern Bloc non EU countries) then until it is announced to the contrary you will require more documentary proof in support of your application. The requirements now demanded by Immigration for nationals of these countries are time consuming, we will need to discuss these requirements in detail, please contact me. These countries include ( but not exclusively) Russia, Ukraine, Belarus, Albania, and all of the now independent but former dependencies of the Russian Federation.
As at February 2014 the former Eastern European States ( Eastern Bloc) now EXCLUDES ALL nationals of EU member states. This is a big change in Andorran policy since up until this date Andorra has not recognised member states of the EU as actually part of the EU for the purposes of Immigration to Andorra. If you have enquired before as a national of an EU country and that includes Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia, then please contact me immediately, the door is now open.
Areas of Investment Allowed in Category A
The permissible investments can be either / or, or a combination of one or more of the following:-
1. Property in Andorra. A local mortgage can now count towards the investment requirement. Formerly the entire equity was required to be brought to Andorra and invested, but this is no longer the case. It can also include the purchase of land but in which case you will have to rent a property as all residents need to prove a livable address.. Please note the requirement that It is the head of household who individually must ensure that he or she has invested the full amount.
Please note that ANY property that may have been bought in Andorra at some time in the past even before the new law was approved can be used as the extra investment requirement. This means that even if you bought a property 15 years ago it now counts towards the required investment. The value though of all properties accepted by Immigration is the value on the title deed and not today's market value.
The new changes as from December 22nd 2022 mean that the investment requirement has risen to 600,000 EUR ( less the bond/deposit contributions at application). There are though further conditions:-
- If you invest 400,000 EUR into a "Fons d'Habitatge", a Government investment vehicle for low cost housing yet to be up and running then the investment of an extra 200,000 EUR is waived. Details on this will be made known at some stage. In principle that is all that is required to be invested, but then you need an address, either purchased or rented.
- There is a new minimum limit of 400,000 EUR in any one property to qualify for Immigration requirements. This means that you cannot buy 3 apartments of 200,000 EUR each, nor it seems can you buy one for 400,000 EUR and another for 300,000 EUR. If you want to invest in two properties then the requirement would be an investment of 800,000 to qualify. Otherwise if you buy a property for 400,000 EUR you will require an additional investment in the bank to make up the shortfall. One loophole springs to mind is you form a holding company with a share capital of 600,000 EUR and then you can use that equity to buy properties of any value.
Please note that stamp duty and other expenses incurred in the purchase of a property are not included, it purely is the equity value on the property.
2. Global/Regional investment funds as permitted and invested through local banks or a simple deposit into the bank, In all cases the funds will be required to be "locked" into Andorra for the duration of the residency unless they are withdrawn with the intention of satisfying other allowable investments such as property purchase. Interest or profit can be earned without tax or capital gains. Please note though that funds can go down as well as up and this can cause problems at renewals if the extra investment requirement is allowed to fall below value.
3. Shares issued by Andorran registered companies, In practice this is difficult for investing in existing entities for many reasons such as Andorran Company share structure, and transfer by private agreement since there is no stock exchange here. A capital investment though in forming a local Andorran Company can be a viable investment alternative but there are restrictions on how that company can operate since passive residents are not allowed to work in Andorra, however as a holding company this can be a useful vehicle to receive dividends from companies around the world and in most circumstances tax free for the company and at the personal level.
4. Andorran Government Treasuries or Public Company bonds, In 2022 Treasuries were available at a return of 1.75% (Maturity July 2022). There is little public information available but government bonds are issued for subscription from time to time, the bank will help on that. Public Company bonds are not readily available yet but may be in the future (See the "Fons d'Habitatge" above for example).
5. A straight increase in the bond paid to the Government but non-interest bearing of up to €600.000, at face this may not be an attractive option bearing in mind bank deposits and investments, however it may offer a convenient and more accessible place to "park" the required funds pending, say, a delayed house build or other delays which may otherwise jeopardise your application. At least with this the funds are safe and are not subject to losses or downward revisions!!
So what do I do next?
Once you have satisfied your self with what is required the next step is to turn to the page
titled "Application Process"
titled "Application Process"