Creating a residence in Andorra, conditions and information to know
There is no lack of advantages for an Andorran resident. The country has set up an ideal framework for foreign investors. It is a very popular destination to create a company. Individuals are not left out either. Andorra offers a tax system with very low rates. Active or passive residence in the Principality of Andorra, what are the advantages? What are the implications for executives wishing to create a managerial residence? What about the conditions for those who wish to expatriate there with their family?
The different types of residence in the Principality of Andorra
For all the people wishing to expatriate in the Principality, they have two solutions at their disposal. They can either become an active resident or a passive resident.
Active residence
Active residence is intended for all persons with immigration authorization to carry out a professional activity in the country. For this reason, this status is also called working residence. Employees and entrepreneurs who wish to work in "Andorra" must have an active residence.
Shareholders or foreign nationals who wish to take over a company in Andorra can obtain active residence. However, to be eligible, they must hold at least 20% of the capital of the company in question. To do this, they will need a work permit.
For the active residence permit, it is obtained for a period of one year for the first year with renewal periods thereafter. These periods depend mainly on the nationality of the citizen. If you are French, Spanish or Portuguese, for example, you can have two consecutive two-year renewal periods. After these periods, the renewals are for a period of ten years. However, a Belgian or Swiss citizen will have to go through more renewals.
The application for an active residence is accompanied by substantial administrative steps. That is why the support of a Gestoria will allow you to optimize the procedures and to save a lot of time.
The passive house
When a foreigner wishes to settle in the Principality of Andorra without a work permit, passive residence is the option that he can consider. For this purpose, he can settle there as a retiree or as an investor. It can be a person who wants to rent real estate, who has funds or a bank interest, who receives a pension, etc.
In other words, it is a residence where the person concerned does not have to have an active business.
Creating a residence, the essential conditions to be able to settle in Andorra
The procedures and conditions for creating a residence in Andorra are not the same for an active resident and a passive resident.
To be eligible for an active residence, you must, among other things:
- Reside permanently in the Principality for at least 183 days per year, not including vacations and business trips,
- Own at least 20% of the company's shares and/or be a director,
- Register with the CASS, the Andorran social security system,
- Present a clean criminal record certificate (no money laundering or other financial crimes),
- Pay a deposit of 15,000 euros to the AFA,
- Have a home in Andorra, whether it is purchased or rented,
- Deposit a share capital of approximately 3,000 euros in an Andorran bank for company founders.
As for the passive residence, here are some of the conditions that must be met to receive it:
- Establish your main residence in Andorra for at least 90 days in a calendar year,
- Make an investment of at least 350,000 euros, plus a deposit of 47,500 euros to be paid to the Andorran Financial Authority or AFA,
- Take out international health insurance,
- Prove a clean criminal record,
- Present a medical certificate from the immigration medical service,
- Have a bank certificate mentioning the deposit of 47,500 euros and 9,500 euros more for each dependent family member,
- Have a proof of income which must be 300 times more than the minimum wage in the Principality.
Obtaining an Andorran residence for the creation of companies
Located between France and Spain, Andorra offers many opportunities for entrepreneurs, especially for its low taxation. To create an offshore company, it is not mandatory to be an Andorran resident. It is quite possible to create this type of company without being a resident. However, the company’s structure will be subject to the same legal framework as all Andorran companies.
Realize your expatriation project without further delay!
Make an appointment
The case of family reunification: explanations and specificities for Andorra
In Andorra, a resident or a person with an Andorran residence can apply for family reunification. The process of family reunification is also possible in this country for a holder of a residence permit or a work permit.
A resident of “Andorra” can apply for family reunification for :
- Spouse;
- Partner;
- Children under 18 years of age or spouse’s children if they have legal custody;
- Elderly or retired persons of at least 65 years of age for whom they are responsible;
- Individuals under guardianship.
The residence permit duration for family reunification changes according to the status of the person who takes care of them. If the person is of Andorran nationality, it is valid for a maximum of 10 years. It is valid for 1 year and can be renewed 3 times for intervals of 2 years if the family reunification has an active residence in Andorra. However, agreements have been signed by the Principality and other countries to ease the requirements of the residence permit.
Among the documents required for this process, you will have official forms to complete. As an applicant, you must prove that you have the economic means to cover the costs involved and to support the people concerned.
Concept of a center of family, economic and social interest to determine a tax residence
In Andorra, the concept of center of interest follows the same principles as in other European countries. Andorra will be your center of economic interest if you make your main investments there. For this condition to be effective, Andorra must be the seat of your business. A country is a center of interest when a large majority of your income is derived from there.
If you decide to move to Andorra with your family, the country will also become the place of residence of your family. It will be the place of the main personal stay. Please note that there is no hierarchy between personal, economic, or social interests. They are effective as soon as you meet all the criteria required for a tax domicile in Andorra.
The importance of being accompanied in the administrative steps of creating a residence in Andorra
During the process of creating an Andorran residence, it may happen that you need professionals to assist you in these steps. Taking advantage of the services of a Gestoria relieves you of all the time-consuming tasks related to this new adventure. You could have to provide different documents, like a foreign investment authorization.
As most of the administrative procedures are done in Catalan in Andorra, the accompaniment of an expert is a real saving of time and energy. It also ensures the success and optimization of the procedures.
