The Principality of Andorra has a very low tax burden, the maximum tax for individuals and companies is 10%, the general VAT is 4.5%, capital gains are generally not taxed, no donation tax is paid and there is no wealth tax.

In order to obtain all these tax advantages, it is necessary to be considered a tax resident in Andorra, specifically, there are two main types of residence: on the one hand, active residence, which are for business projects that they want to develop in the country, and on the other. On the other hand, passive residence, which is for people who, without working in Andorra, want to invest and reside in the Principality.

In addition there are more advantages for other types of special residence permits that are granted to people who can justify a particular talent or a certain prestige (cultural, scientific, etc.), such as artists, or even elite athletes.

Below, we detail and explain the types and characteristics of residences in Andorra, in order to benefit from these advantages.

1-Active residence: with a work permit in Andorra

Active tax residence is granted to people who work in Andorra and there are two ways to obtain it

  1. a) Carry out a professional activity in Andorra

If you have a job offer from an Andorran company to work in Andorra, you have the right to request active residence in Andorra (as an employee).

  1. b) Create a company in the Andorran territory

If you have a business project in the Principality, you can obtain active residence (on your own). To become an active resident in Andorra, your business activity will have to meet the following conditions:

  • The company’s headquarters must be located in one of the 7 parishes that make up the Andorran territory.
  • It is recommended that the employer has a certain staff structure and means to carry out the activity.

The beneficiaries of the professional tax residence authorization in Andorra have to deposit a minimum of € 15,000 in the Andorran Financial Authority (AFA, formerly INAF). In case of non-renewal of the residence permit, said amount will be returned.

Conditions to obtain active Andorran residency

If you justify a professional activity or the creation of a company in Andorra, you will be able to obtain the status of active resident. The procedures must be carried out at the Ministry of the Interior, the conditions that you must respect are the following:

  • Live, at least 183 real days a year in the Principality of Andorra,
  • Be at least 18 years old
  • Provide proof of the absence of a criminal record
  • Have a work contract / promise with an Andorran company
  • Create a company and own more than 10% of its shares
  • Undergo a medical exam
  • In order to reinforce the intention to reside in Andorra, a deposit of € 15,000 is required at the INAF (Institut Nacional Andorrà de Finances), unpaid.
  • Proceed to the installation of your tax domicile in Andorra

2-Passive residence: without work permit.

Passive resident status in Andorra is granted to people who do not work in Andorra but who want to reside in the Principality.

Conditions to obtain Andorran passive residence

To obtain passive residence authorization in Andorra, you must provide different information and documents, which must be apostilled:

  • Provide proof of the absence of a criminal record
  • Passport and certificate of civil status
  • Certificate of health, retirement and disability insurance
  • For those over 60 years of age, a health insurance certificate
  • Certify an income, at least 4 times higher than the average level of the country

Passive residence authorization is also subject to compliance with the following conditions:

  • Be at least 18 years old
  • Live a minimum of 90 real days a year in the Principality of Andorra
  • Have an official address
  • Provide a bank document that proves the deposit of € 50,000 in the INAF (Institut Nacional Andorrà de Finances), unpaid, plus the additional € 10,000 deposit for each family member.
  • Undergo a medical examination at the immigration service
  • Justify an income higher than 300% of the annual minimum wage in Andorra
  • Obligation to invest at least € 400,000 in the Principality of Andorra. This investment can take several forms (mandatory unpaid deposits in the AFA are deducted from this amount)

Different statutes of passive residents

If you do not have an employment contract or do not plan to create a company, you can also request passive residence in Andorra. This type of residence is divided into 3 categories: A, B and C.

  • Passive resident in Andorra category A: for people who live in Andorra without having a professional activity.
  • Passive resident in Andorra category B: for people who have income generated by an international activity and not a local activity.
  • Passive resident in Andorra category C: for people of recognized international prestige (athletes, researchers and artists).

3-Once these requirements have been met and after being qualified as a tax resident in Andorra, you will have to take into account the taxes to be paid in Andorra. Specifically, they are the following:

  • Corporate taxes on profits made by an organization. The applicable general rate is 10% maximum, a company being endowed with particular benefits during the first 2 years of its existence, in addition, double taxation agreements will have to be reviewed
  • Personal income tax. Personal income tax applies to those who are considered tax residents in Andorra.

Personal income tax in Andorra does not apply to salaries below € 24,000 per year. From this amount it is in accordance with the income, never being more than 10%.

  • General indirect tax (IGI) It would be the equivalent of the Spanish VAT, however its index remains particularly low at 4.5%.
  • Other fees and taxes in Andorra Directly withheld by the parishes that make up the Principality of Andorra, the communal fee is an integral part of local taxes in Andorra.
  • Regarding the government rate, it varies between € 200 to more than € 800 per year and is aimed at companies that do not benefit from commercial registration.
  • The tax for non-tax residents in Andorra

Border workers who come from Spain or France carrying out an activity in the country are considered non-tax residents in Andorra.

The IRNR: the income tax of non-tax residents in Andorra

The situation of non-tax residents in Andorra is particular. They are subject to IRNR if they carry out one of the following activities: employee in a service provider company (repair, rental of real estate, etc.); teacher, training professional, technical assistant, etc .; artist; employee affiliated with CASS (social security)

The amount of IRNR rises on average to 10% of the wages received


The attractiveness of the Andorran tax residence lies in its low taxation of 10%, and its facilities to qualify for residency. For this reason, in any case, to avoid any type of risk in the processing of tax residence, it is totally advisable to consult with a tax specialist who can advise you and accompany you through the process to obtain your tax residence in Andorra.