Changes in immigration and foreign investment in Andorra: towards a more restrictive model

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Historical background: from controlled openness to mass attraction

Since 2012, Andorra has undergone a deep and accelerated transformation of its institutional, fiscal and economic model. Its definitive removal from the lists of tax havens marked the beginning of a gradual opening to the outside world, with a clear objective: to integrate into the international economy through a harmonised, transparent and predictable legal framework.

You can explore the concept of tax havens and the Andorran case in more detail in Tax haven in Andorra: myth, reality and what the current tax system actually says.

Double taxation agreements

This structural shift was reinforced by the successive signing of double taxation agreements (DTAs), particularly significant with countries such as Spain and France, and more recently the United Kingdom. These agreements consolidated the Principality’s international recognition and effectively reduced the tax risks associated with international mobility.

Andorra ceased to be perceived as an exception and instead positioned itself as a distinctive European jurisdiction, fully aligned with international standards.

You can find a detailed overview in Double taxation agreements (DTAs) in Andorra.

A turbulent European environment

At the same time, the broader European context was evolving in the opposite direction: increasing tax pressure, ever more complex systems, and a widespread perception of a lack of support for entrepreneurship led to growing disengagement among certain professional and wealth profiles.

In this environment, Andorra emerged as an attractive alternative for those wishing to remain within Europe while benefiting from a more efficient, stable and secure environment.

Unlike other emerging destinations — such as Dubai — Andorra offered a less disruptive model, but one that was culturally and legally closer to the European framework. This factor played a key role in attracting new residents.

You can explore the main drivers in Why so many entrepreneurs relocate to Andorra.

For a broader historical perspective, see Andorra’s international evolution: from tradition to the global stage.

Current situation: housing as the central issue

The arrival of new residents has not been limited to highly visible or media-driven profiles such as YouTubers. Entrepreneurs, athletes, digital professionals, investors and business founders have found Andorra to be a particularly favourable environment for developing both personal and professional projects. The result has been an unprecedented level of interest in the country.

However, the impact of this growth in a small-scale country has been proportionally very significant. With a population approaching 90,000 inhabitants and a limited surface area, any strain on structural resources is felt immediately.

The real estate market is the clearest example of this imbalance. In 2017, it was still possible to purchase property for under €2,000 per square metre. By 2025, finding properties below €5,000 per square metre has become virtually impossible.

Although this trend is not unique to Andorra, in its case it has affected the entire territory, with direct consequences on the cost of living and, above all, on access to housing.

More details can be found in The Andorran real estate market (2019–2025): prices, new developments and access to housing.

This price increase has been exacerbated by several structural factors:

• a growing number of people living alone rather than as couples,
• a shortage of immediate supply (much new construction is sold off-plan),
• sustained interest in property as a wealth asset,
• supply growth lagging behind demand.

The result is a highly strained market, in which an individual earning a market-level salary faces serious difficulties in affording rent on their own.

Measures adopted to date

In response to this situation, public administrations — originally designed for a much smaller scale — have been overwhelmed and have reacted progressively by introducing corrective measures across different areas.

In the field of immigration, the residence regime has evolved continuously:

• the gradual introduction of financial deposits (starting from an initial framework with no deposit). Learn more in Residence deposits in Andorra: origin, evolution and applicable regimes
• successive increases in entry requirements. Further detail in Self-employed residence in Andorra: requirements, benefits and real taxation and Passive residence in Andorra: evolution, requirements and legislative changes
• tightening of renewal conditions. A practical example is explained in The new Andorran Immigration Regulation: key changes and practical impact for residents and companies
• stronger effective control of compliance with residence conditions.

At the same time, language requirements have been strengthened, introducing knowledge of Catalan as a relevant element for integration and permit renewal. More information in Catalan in Andorra: language requirements and their impact on immigration and permit renewals.

In the housing sector, several high-impact measures have been implemented:

• initial limitations on tourist rentals,
• subsequent prohibition on granting new licences. See Tourist rentals in Andorra: how to operate an HUT legally and when it can actually be profitable
• approval of first-home purchase assistance programmes for residents, always under non-speculative criteria. Learn more in First-home access programme in Andorra: a new boost to ownership
• expansion — albeit limited — of the public housing stock for vulnerable groups.

The year 2025 marked an additional turning point with:

• the effective limitation of new self-employed residence permits,
• stricter control of cross-border workers and seasonal employees,
• the adoption of the Omnibus Law, redefining the foreign investment regime and introducing the foreign real estate investment tax. More details in Omnibus Law 5/2025: a paradigm shift in foreign investment and access to housing in Andorra.

Despite this set of measures, the impact on the housing market has been insufficient to reverse the trend, as initially anticipated.

Measures under consideration and most likely scenarios

In this context, the Government is working on a new package of measures which, although still under parliamentary review and not yet definitively confirmed, clearly points towards a further tightening of the system.

Although not officially confirmed, entry into force could take place between February and April 2026.

The most likely measures include:

• an increase in the minimum investment requirement for passive residence to levels significantly higher than current thresholds. For passive residents, the minimum investment could rise to €800,000. Further detail in Passive residence in Andorra: evolution, requirements and legislative changes
• an increase in the foreign real estate investment tax rate, raising the minimum from 3% to 6%,
• a revision of the deposit regime, introducing a non-refundable component, potentially affecting both passive and active residents, similar in nature to a fee. See the current framework in Foreign Real Estate Investment Tax in Andorra: purpose, structure and practical application. According to some sources, this non-refundable portion could reach up to €30,000,
• further adjustments to labour immigration, seasonal work and sectoral controls, aiming to allow partial activity in other sectors while making sector changes more difficult. The impact is expected to particularly affect non-EU nationals, as the current 3-year period may be extended until the third renewal, resulting in a total duration of 5 to 7 years,
• the possible adoption of a new Omnibus Law consolidating all these measures across multiple legislative areas.

At the same time, work is underway to create a land registry, which has not existed to date and should allow for a more accurate diagnosis of the real estate market. The absence of such a tool has so far hindered a clear political consensus on the precise origins of the problem.

The overall direction is clear: to limit the impact of foreign capital and reduce pressure on a market that many already consider to be in a state of emergency.

Will these measures enter into force?

It is highly likely that a significant portion of these measures, together with others of lesser scope, will come into force. However, at present it remains impossible to be categorical. Until the final text is agreed, approved and published, these remain probable scenarios, not confirmed rules.

Once the changes enter into force, we will — as always — report on their scope and impact.

Final reflection: an increasingly selective model

Andorra is not moving towards an open-access model, but rather towards an increasingly selective approach, closer to the Swiss mindset: not everyone is welcome, not all growth is desirable, and the country’s capacity is finite.

This approach may be debated — and even perceived as discriminatory in some respects — but it responds to a logic of preservation in the face of a real and tangible challenge.

The trend is clear and consistent with what has been announced in recent years: access to the country will become increasingly difficult, both in terms of initial residence approval and ongoing renewal.

For those considering relocating to Andorra, the message is twofold: if the decision is to move, sooner is likely better, but always with rigorous planning, and with full awareness that the regulatory framework will continue to evolve towards a more demanding, selective and tightly controlled model.

📞 Are you considering Andorra as a relocation option or as an investment destination?

If you need to analyse your specific situation or assess how these changes may affect you, you can contact us via the Contact form.
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Last revision: January 2026