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🏠 Living in Andorra: what you need to know before choosing your residence

For anyone considering applying for a residence permit in the Principality, Andorra offers two major types of administrative residence:

• active residence (when a professional activity is carried out in the country), and
• passive residence (when you wish to live in Andorra without working in the Principality).

Although often presented as similar options, the differences run deep: CASS obligations, investment requirements, physical presence, cost, taxation, and legal limitations.

Below you will find a clear and practical guide to help determine which modality best fits your profile.

If you are considering moving to Andorra, you may wish to read Living and working in Andorra: what you need to know before relocating

⚙️ Active residence: requirements and real advantages

What is commonly referred to as “active residence” actually encompasses several different modalities. It is granted to those who work, undertake business activities or manage a company in Andorra.

It is the ideal option for employees, professionals, freelancers, business owners, entrepreneurs and directors wishing to carry out their economic activity in the country.

As we will see later, not all of these categories necessarily grant the right to reside in Andorra.

🔹 Active residences with the right to reside and work

The categories that grant both residence and work rights are:

• Residence and work (employment-based)
• Temporary immigration for residence and work
• Residence for self-employment

🔹 Active residences granting only the right to work

The following categories allow you to work, but not to reside in Andorra:

• Cross-border worker
• Temporary cross-border worker
• Work authorisation without residence (posted worker)

🔹 Special active residence categories – limited rights

There are also special authorisations with limited activity:

• Employees of foreign companies (temporary)
• For studies, internships, research or training
• Young persons with a work option

It is worth noting that over 95 % of applications fall into the first group — those allowing both residence and work.

🔧 Main requirements of active residence

Beyond the particularities of each modality, all of them share several general requirements:

• Affiliation to CASS (Andorran Social Security) either as an employee or as a self-employed worker (except in very specific cases). To understand more about how social contributions work in Andorra, you may consult Contributions of self-employed workers to CASS: reduced regimes and general obligations
• Effective and continuous residence in the country (a real degree of physical presence).
• A habitual residence or available accommodation in Andorra.

And certain specific requirements:

• A valid employment contract in the case of employees.
• In some cases, a minimum shareholding in a local company and the exercise of managerial functions.
• For self-employment residence, a mandatory €50,000 deposit with the AFA (with exceptions for some liberal professions).

🌟 Key advantages

This is the most common form of residence in the Principality. In general terms, it includes all the rights the country grants: residence, employment, and access to public services. Notable advantages include:

• Possibility of becoming a tax resident if permanence criteria and/or economic interests are met. To understand the differences between active, passive and tax residence, you may consult Types of residence in Andorra: active, passive and tax
• Taxation under the Andorran Personal Income Tax (IRPF), with a maximum rate of 10 % and a significantly lower effective rate. More details in Personal income tax (IRPF or PIT) in Andorra
• A stable business environment recognised internationally.
• Possibility to undertake and structure economic activity efficiently.

❗ The most common active residence for non-employees

For individuals who do not have an employment relationship with an Andorran company, the most widely used modality is self-employment residence.

It grants full independence, although it comes with more constraints than the other categories: financial deposits, local ties, permanence, enhanced monitoring, and so on.

➤ For detailed information, you may consult Self-employment residence in Andorra

Additionally, since one of the requirements is to hold at least 35 % of the shares of an Andorran company — and although it does not necessarily need to be newly created — it is often useful to read Incorporating a company in Andorra: steps, requirements and advantages, as this is the most common scenario.

🏡 Passive residence: living in the country without working

Passive residence (or non-lucrative residence) allows you to live in Andorra without carrying out professional activity within the territory.
It is ideal for high-net-worth individuals, retirees, families with capital or investors.

The existing types of passive residence are:

• Residence without lucrative activity (the most common)
• Residence for internationally recognised professionals (legally recognised but almost unused)
• Residence for reasons of scientific, cultural or sporting interest (discretionary)
• Residence based on admission to care homes or medical care centres

In practice, over 95 % of passive residence permits correspond to the first category.

🔧 Main requirements

For residence without lucrative activity — commonly known as “passive residence” — the requirements are:

• Minimum investment of €600,000 in Andorran assets (real estate, deposits, shareholdings, bonds…). Closed list.
• Deposit with the AFA:
  • €47,500 for the main applicant
  • €11,500 per dependent
• Medical insurance covering potential costs in the Principality (illness, incapacity, old age).
• Minimum stay of 90 days per year (non-consecutive).
• Prohibition of exercising direct professional activity in Andorra.

This residence can also lead to tax residency, provided all legal requirements are met.

➤ For more information, you may consult Tax residency in Andorra

🌟 Key advantages

Below are some of the main advantages this residence grants — or may grant — while keeping in mind that these are not necessarily automatic benefits:

• Ability to live in the country while maintaining economic or investment activity abroad.
• Very low local taxation and a stable environment.
• Enjoying a safe, selective country with a pleasant climate. For more details, you may consult Climate in Andorra
• Possibility of obtaining tax residency if permanence or economic-interest criteria are met.
• Geographic proximity to France, Spain and the rest of Europe.
• A multilingual environment (Catalan, Spanish, French and, to a lesser extent, English — except in expatriate communities).

➤ To explore further, you may consult Passive residence in Andorra

🔎 Essential differences between active and passive residence

Below is a simplified list of the key differences between both groups of residence:

💼 Professional activity

• Active: mandatory or possible (as employee or self-employed).
• Passive: prohibited directly in Andorran territory. Only investment-based participation is allowed.

💰 Required deposit

• Active: generally not required, except for self-employment residence, which requires a €50,000 AFA deposit.
• Passive: minimum investment of €600,000, including the AFA deposit of €47,500 for the main applicant.

➤ To understand how the residence deposit works and in which cases it applies, you may consult Residence deposit in Andorra: origin, evolution and applicable regimes

🏥 CASS affiliation

• Active: mandatory, with full coverage.
• Passive: no contributions (medical insurance required to cover potential costs).

To learn more about the CASS, you can consult the article The CASS in Andorra: contributions, coverage and key points for 2025.

📍 Physical presence

• Active: effective and continuous residence.
• Passive: minimum of 90 days per year.

🎯 Objective

• Active: to work or undertake business in the Principality with reduced taxation both locally and internationally.
• Passive: to live without professional activity, with a patrimonial focus. Often allows access to reduced worldwide taxation.

💸 Global cost

• Active: low or moderate depending on the structure and needs.
• Passive: higher, depending on complexity and personal circumstances.

⚖️ How to know which modality suits you best

The decision will depend on your profile:

• If you are an entrepreneur, digital professional or wish to manage your company, active residence is usually the preferred option, provided you can meet the requirements.
• If you are retired, have capital or seek patrimonial stability, passive residence is often chosen.
• If you want to optimise taxation and establish your centre of life in Andorra, either modality can lead to tax residency, assuming the legal criteria are met.

➤ For a full and exhaustive comparison of all residence types, you may consult Types of residence in Andorra: all administrative modalities

🧠 Practical advice before choosing your residence

Before choosing one residence or another, it is important to consider several elements:

• Analyse how much time you can — or will be able to — spend in the country.
• Review your tax ties with your country of origin, as one modality may be more relevant than another depending on your circumstances. If you think you may be in such a situation, you may consult Tax residency conflicts: when two countries consider you a resident simultaneously
• Evaluate whether a business structure could optimise your worldwide income or whether your activity is more financial or patrimonial.
• Ensure coherence between your actual residence and tax residence.

When in doubt, it is always advisable to request specialised guidance and make informed decisions.

If you would like our support, we remain fully available to help you choose the most suitable option for your interests, whether through an online meeting, an in-person consultation or via our contact form.

Conclusion

Andorra offers a safe, stable and competitive environment for both professionals and high-net-worth individuals.

Choosing the residence that suits you best is key to ensuring a legal, efficient and long-term installation.

Making the right decisions from the start prevents the loss of time and money that comes from correcting unwanted situations.

With sound planning and the support of an experienced team, you can live, structure and optimise your taxation in Andorra with full legal certainty and peace of mind.

If you would like to know which residence best fits your situation, you may book your meeting below or contact us through our contact form.

Last review: November 2025