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Andorra residency categories and the latest changes

June 2024 Foreign investment processing delays.

The Government Department responsible for the processing of foreign investment applications ( and bond exemptions under the digital economy area) have been inundated and cannot cope with the applications, so much so that they now say to allow THREE months for a decision.

Foreign investment affects:-

  • Those who want to form a company and become active residents,
  • Those non residents who want to purchase property,
  • Those residents with less than 3 years "service" as a resident looking to purchase property,
  • And also being delayed in the same way, those applying for bond exemption for the digital economy.

So many recent changes in the law of digital economy,  foreign investment approval, new taxes and procedures have all come together at the wrong time to create the perfect storm for that particular Government Department.

As Immigration require original certificates less than 3 months old, be prepared now more than ever to take one process at a time with full sets of documents.

Other important recent changes in Obligatory Requirements for passive residencies

When the bond refunds are made on cancellation of residency however the applicant will only receive 47,500 EUR and 9,500 EUR for each dependent refund. In other words the 2,500 EUR and 500 EUR payments for the card are no longer recoverable.

Also now required, not by law but by Immigration demands, is for all RE-APPLICATIONS (This is where the residency is cancelled or unable to be renewed necessitating a reset or re-application) for passive residency to obtain an Andorran police certificate. It has been clarified that this is NOT a new requirement for new applications or for the usual renewals of residency.

As from March 2022 immigration is no longer accepting any police certificate whatsoever that is not clean. It matters not the severity of the listed conviction or when that conviction took place. This does mean if you have a conviction for being drunk in charge of a bicycle from 1958 you will not be considered for residency. This is a new and dramatic change in immigration policy and I somehow feel and hope that this may at some stage be overruled. Under the old system there was generally no concern for a previous conviction as long as it was not serious which the majority are not. If you are considering applying for any category of residency and you have a conviction you must either take steps to remove that conviction before you apply for a police certificate or not apply at all. I understand that in some countries it may be possible to remove spent convictions but for example in the UK that is not the case, contrary to what people believe, and a criminal conviction will remain on the national computer database for 100 years!!!

Recent changes in Spouse requirements for active residencies

As from April 2022 the requirement for active residents to wait 12 months before their spouse may officially apply join them as a non working dependent is cut to 3 months. This appears to be for all nationalities and is significant as for example the spouse need no longer to be a shareholder of the company to overcome the old 12 month rule.

December 2024 Russian applications update...

There have been enquiries concerning the effect of sanctions and current policy for Russian and Belarusian applicants.

In summary the Government policy, is that the Government is not processing the foreign investment applications for company formation, consequently Cat B of passive and Cat D of active are not possible.

Immigration say they themselves are not affected by any policy regarding Russian and Belarusian applications for Category A of passive residency.  As before there are extra documentary requirements but in principle, applications will be processed and where the documents are correct the residencies will be approved subject to routine extra police checks.

The main problem is the banks here that are not processing new account applications for Russian or Belarusian nationals UNLESS there are very persuasive reasons, such as having left those countries many years ago, perhaps a new nationality, no funds coming from those countries OR any high risk country. Each may be considered on a case by case business but it is not easy at all.

another greenline

An overview of common requirements

You must be here in person with any dependent over 18 years old at the time of application. For children we can get around that requirement Also having been perfected in the COVID lockdowns of 2020 and 2021 it is possible to present an application without the applicant BUT it will not be processed until you appear in person.

Police certificates from any third country are now required to be completely free of any record. Immigration seems to think it is easy to get removed spent convictions, unfortunately if you are from the UK and many other countries that simply is not the case- However under this new diktat, if you have any conviction you should not apply for residency.

Time spent here or not spent here is not monitored ( except with the possibility of category D at first renewal). This means in reality you can spend as much or as little time here as you wish.

It is advisable now to also familiarise yourself with the renewal requirements which for passive residents need to be fully understood. Please have a look in your own time at the renewal requirements page.

Categories can be inter-changeable once approved, but strictly in compliance with the bureaucracy of Immigration. A change from active to passive and vice versa is now regarded as a new application and the clock ( years of residency under your belt) is reset from the year of your original application to the current application.

This is an explanation of these "Immigration quotas" that are issued from time to time by the Government.

Let me summarise the different categories available. Once you have decided which category may be appropriate for you, then please click on the appropriate category link to read in detail the requirements and how to go about starting the procedure.

living in andorra location
Category A Passive Residency

You may continue to have an existing company or employment outside Andorra.

The fully refundable but non-interest bearing deposit payable to the government is € 47,500 for the head of household and € 9,500 for each dependent. Within six months of approval the applicant must then show that he has invested a total amount of €600,000 in Andorra, please note that this government deposit does form part of this investment (Explanation: the € 47,500 deposit is paid at the time of application as is an additional € 9,500 for each dependent. Therefore, a husband and wife and one child will pay €66,500 as a deposit. The extra investment requirement will then be €532,500). This investment may be in property or financial investments in Andorra or a combination, and these are outlined in detail on the page specific to Category A.

On approval of the residency, the card will then cost 2,500 EUR for the principal applicant and 500 EUR for each dependent and these fees are non refundable.

On paper the minimum required stay is 90 days per year. The minimum required stay to become a fiscal resident is 183 days per year. So, a passive resident who stays in Andorra for less than 183 days per year can maintain his residency and not necessarily become a fiscal resident. For those passive residents who need to become a fiscal resident but who cannot in practise stay for 183 days per year can simply opt to declare tax (or by stating that Andorra is their principal base of economic activity regardless of the number of days spent here). For details of tax implications please refer to the Andorra Tax page.

Residents under category A are also allowed to form an Andorran holding company which can be useful to receive dividends (under most circumstances) tax free from companies based elsewhere.

Category A is a paper exercise and remains the most straightforward category of residency to apply for. It takes 3-8 weeks for the card to be issued. If the investment requirement is not a concern for you then this category is by far the most straightforward and quickest route.

The spring skyline La Massana
Category B Passive Residency

Residency dependent on the viability of a business plan, a passive category that allows a company, residency and flexibility of living in Andorra.

Please note that this category is currently under review, renewals in this category especially have become quite onerous and in general I only recommend this category as a last resort, where possible category D active residency should be considered.

The fully refundable but non-interest-bearing deposit payable to the government is € 47,500 for the head of household and € 9,500 for each dependent. In this category you are not required to prove any extra investment as in Category A. However, you must within seven months of approval have formed an Andorran company. This category is subjective, and approval is granted on the basis of a viable business plan at the residency application stage. I have guides on this to assist you.

On approval of the residency, the card will then cost 2,500 EUR for the principal applicant and 500 EUR for each dependent and these fees are non refundable.
As with Category A, the minimum required stay is 90 days per year.  Of course, the company itself will be liable to Company tax in Andorra at 10% on profits but for the individual shareholders unless they stay here for more than 183 days will not necessarily become a fiscal resident. In effect category B allows residency, an Andorran company, and flexibility of living and working in Andorra as a principal base. One point of the tax law is that dividend distribution from an Andorran company is exempt from personal income tax in Andorra (once the company tax is declared). Salaries under this category are also treated as dividend distribution.
Category B provides that a minimum of 85% of business activity must be conducted outside of Andorra, and there is a provision for the company to be able to exercise an option to employ a maximum of one employee in Andorra.
Category B can take longer to approve, maybe 1 to 3 months, as the business plan has to be studied by various government departments. Once approval is granted the residency card is issued within 3 to 6 weeks and the formation of the Andorran company can commence. Family dependants can be included in the application at the same time as the main applicant (but NOT always in Category D, please see below) or can be added at any time after approval of the head of household.
Category B does NOT allow you to contribute to the local social security system (CASS) and you will require private medical insurance.

There is now a new Category B (Digital Entrepreneur) however for reasons stated on that web page, there are too many complications, especially at renewal that I cannot recommend it, nor am I agreeing to process any applications. Instead, I recommend Category D active residency below with the bond exemption.

Santa Coloma to Spain
Category C Passive Residency

This passive residence Category is designed to attract the professional sportsmen, writers, entertainers, and famous people to Andorra.

In essence this is exactly the same as category A but the applicant is required to show that he is a professional and famous sportsman, scientist, sculptor, author, or famous person in his own right. If this can be proven by means of a professional contract, CV and proof of achievements then the applicant will be required to pay € 47,500 deposit to the government plus € 9,500 for each family dependent but will be exempt from having to invest a further amount up to € 600,000 as in Category A.

On approval of the residency, the card will then cost 2,500 EUR for the principal applicant and 500 EUR for each dependent and these fees are non refundable.

Again, the minimum required stay is 90 days per year and therefore the resident is not necessarily a fiscal resident as in Categories A and B above.

As in Category B there is a subjective element in determining whether the applicant is of sufficient fame or standing to be approved under this category but approval does come through a lot quicker than Category B and generally the paperwork is not too complicated to put together in most circumstances.

There is now a new category B (Digital Entrepreneur) however for reasons stated on that web page, there are too many complications, especially at renewal that I cannot recommend it, nor am I agreeing to process any applications. Instead, I recommend Category D active residency below with the bond exemption.

2019 Soldeu finish line
Category D Active Residency

Category D (known locally as "Compte Propi").  

As from 2022 there is a bond/deposit of €50,000 per shareholder/Director who must also hold a minimum of 34% of the share capital in order to apply for residency, unless the branch of Professional Liberal is taken ( see below).

For digital entrepreneurs there is an option to apply after company formation to the Ministry of the Economy for exemption from the €50,000 bond/deposit. This is explained later.

An active work permit in Andorra but is limited and only allows you to work for the company for which Immigration approval was given. If you wish to trade in Andorra, for example import goods, employ local people, have a shop or restaurant, manufacture here etc. then Category D is the only option. Category D´s intention is for you to develop the business within Andorra as your principle economic base. Category B as explained above allows flexibility of being in or working in Andorra and with international business elsewhere.
Category D does not require a business plan other than the application for foreign investment approval but there are two branches to this category (known as "Compte Propi"):-

  1. The most common is formation of an Andorran Company with the foreign investment approval first. It should be noted that once the Andorran company is formed the procedure at immigration is a paper exercise only. This category is not applicable to those seeking employment from any other existing company, nor are you able to work for another company.
  2. "Professional Liberal"  is a "comerç" (sole proprietorship not a limited company) for self-employment in certain professions such as architects, doctors and so on where the qualifications must be approved by the local relevant Institute or Department. These institutes will decide whether qualifications can be reciprocal and the qualifications held are applicable to Andorra. This route can be more difficult for approval and depends on qualifications and experience. There is however NO bond required as the comerç is not a company.

Please note that you can start along the lines of company formation, but when it comes to asking for the local trading license and after the residency is approved problems can arise. This is because the trading license is issued by the relevant Comú and as is happening more and more the Comú approval requires the recognition of "Professional Liberal" and that then in some cases can be denied resulting in problems and a revamping of the company objectives. For some reason this is not picked up on by Government in the foreign investment approval process and really should be!

The minimum time required to be spent here is 183 days per year rather than the 90 days for passive residents. For this reason in Category D you will become a full fiscal resident but note that the personal income tax law means that dividend distributions from an Andorran company are exempt from personal taxation (once the corporation tax is declared).

In this process the Andorran company can take up to 5- 9 weeks to complete. Once the company documents are available an application can be then made to immigration for active residency. The processing time for active residency is a matter of days but does include an undertaking to prove to immigration that all of the company formation and local licensing procedure will be completed within 3 months of residency approval.

For a spouse to become a non-working dependent, Immigration require a 12 month wait between the main application and the family grouping (unlike Category B). However, if the spouse can be included as a joint minimum 34% shareholder then applications can then be at the same time. This will incur extra contributions though to CASS (Social security) as the spouse will be deemed to be working. Category D is the only category where you are obliged to contribute to CASS, the other categories require private health insurance.

Thee is also now an option by application to the Ministry of the Economy for exemption from the 50,000 EUR bond that your business will directly assist in the development of the digital economy, more on the link to Category G below.

Once you have an idea of what category you may be interested in please go back and click now on the appropriate Category heading and discover in more detail what is involved. I fully understand that each individual case is different and that very relevant questions arise. Please do email me if you have specific questions.
Spring in La Cortinada golf course

What are these Immigration quotas that are issued from time to time?

No mortal has any indication when a new quota will or is about to be issued by the Andorran Government. Let me first assure people that historically a quota has never been exhausted, there is no apparent rush before the door shuts under whatever current quota is in effect.

A quota of ONE includes a family unit not the individual. As explained above it is not an annual quota nor is it linked to any time frame. It seems the "topping up" of these quotas is regular, let me explain based on historical research:-

For example on 30th May 2019 The Government issued a "new" quota of 250 places for Active residency Category D. Historical research indicates 250 authorisations were issued on 20.11.2013, 02.04.2014, 22.10.2014, 20.05.2015, 11.11.2015 18.05.2016, 11.01.2017, 28.06.2017, 20.12.2017, 06.06.2018 and finally 30.05.2019. That adds up to 2,750 family units in this category alone!

Clearly the issue of quotas can be determined to be just regular replenishments whether used or not. Let`s examine the historic figures for Categories A, B and C.

Category A

2012 - 300 ( when the new law came in)
2013 - 390
2016 - 490
2017 - 490 ( last one, so a new quota must be due)

Category B

2012 - 100 ( when the new law came in)
2013 - 30
2016 - 30
2017 - 30 ( last one)

Category C

2012 - 100 ( when the new law came in)
2013 - 50
2016 - 50
2017 - 50 ( last one)

We can conclude dear Watson that Cat B is the most unpopular, then Cat C and finally A. But when you compare the quotas issued under Cat D amounting to 2,750 families as opposed to 1,670 under A it is clear the "D" s have it !

Logically if Andorra does start bulging with any influx then the powers to be may well delay an issue, rest assured I have heard no such rumours. Also what the figues do not take into account is those cancelling their residency for one reason or another, I am processing a sizeable portion every year but the arrivals are outnumbering the departures !

The bank certificate explained, a percentage of the minimum wage.

At application for Categories, A, B and C only you will be required to present a bank certificate to show your account has been funded to the amount as required by law. This amount represents an x00 % of the minimum wage of Andorra which is to show you have sufficient means to live in Andorra. As per the table below, the bank certificate is different from the bond/deposit requirement BUT at application the bank certificate amount can be used to pay part of the bond/deposit (Be aware though of the renewal obligations).

Proof of annual income requirements for passive residency applications as at January 2024

2024 passive resident income rquirements
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