Passive residence in Andorra: evolution, requirements and legal framework

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Historical background and evolution

Passive residence in Andorra —officially called residence without lucrative activity until 2025— is the oldest form of economic residence in the country.

It was introduced by the Qualified Immigration Law of 14 May 2002 as a way to attract investors, high-net-worth individuals, and retirees wishing to settle in the Principality without engaging in local employment.

At first, only proof of sufficient income and a minimum investment of €400,000 were required, with no mandatory deposit.

Over time, the system evolved to ensure greater transparency and financial control.

Who is it suitable for

This type of residence is chosen by many retirees and its main purpose is to allow individuals to become tax residents in Andorra without having to meet the stricter requirements imposed by other residence permits, such as self-employed residence.
However, it does come with certain limitations. If this applies to you and you are unsure which type of residence best suits your situation, we recommend reading Residency in Andorra for retirees: real requirements, limitations and alternatives.

It is also suitable for investor or wealth-management profiles, who view Andorra not only as a low-tax jurisdiction but also as a country offering an exceptionally high level of security and peace of mind.

Andorran taxation and tax residency

If, on the other hand, you wish to explore tax residency in greater depth — as this is one of the main objectives of this permit — you can consult Tax residency in Andorra: real requirements and advantages.

For a broader overview of the Andorran tax system, we recommend reading Taxation in Andorra: a practical guide to understanding taxes, obligations and real risks.

Key legislative milestones

As mentioned above, passive residence, being one of the oldest permits, has undergone significant evolution since its creation. Below is an overview of the key changes.

🔹Law 27/2007 and the 2008 Decree

Starting in 2008, the reform of Law 27/2007 and its implementing decree introduced for the first time a mandatory deposit of €15,000 with the INAF (National Institute of Finance).

The goal was to strengthen the figure of the economic resident and provide the government with a financial guarantee mechanism.

🔹Qualified Law 9/2012 of 31 May

The 2012 reform marked a major turning point:

• Mandatory deposit: €50,000 + €10,000 per dependent.
• Minimum investment: €400,000 in Andorran assets (real estate, shares, bonds or deposits).
• Minimum stay: 90 days per year within a 365-day period.

From then on, passive residence became an exclusive regime for high-net-worth individuals with genuine interests in the country.

🔹Consolidated texts of 2017 and 2019

These updates did not introduce material changes but confirmed the 2012 structure, keeping the INAF as the managing entity.

They also clarified the criteria for dependents, housing and mandatory health insurance.

🔹Law 10/2018 and Law 42/2022

Although mainly focused on other categories (such as self-employed residence and digital nomads), these laws paved the way for a gradual harmonisation of economic residence regimes.

🔹Law 3/2024 and Decree 76/2024

The Decree 76/2024 of 10 July raised the minimum investment threshold from €400,000 to €600,000, aligning it with the Andorran property market.
It also broadened the definition of eligible assets:

• Real estate located in Andorra.
• Bank deposits or sovereign bonds.
• Shares in Andorran companies or collective investment vehicles.

🔹Law 5/2025 of 6 March (Omnibus Law)

The Omnibus Law 5/2025 (To learn more, see the article The Omnibus Law in Andorra) modernises and consolidates the regime:

• Maintains the €50,000 deposit, increasing to €12,000 per dependent.
• Transfers the deposit management from the INAF to the AFA (Andorran Financial Authority).
• Replaces the term “without lucrative activity” with passive residence.
• Unifies procedures and allows future adjustments by decree.

Current requirements (2025)

To obtain or renew passive residence in Andorra, applicants must provide:

• Deposit: €50,000 in the AFA’s guarantee account.
• Dependents: €12,000 additional for each (spouse, children, or ascendants). Learn more in Family reunification in Andorra: requirements, changes and current percentages
• Minimum investment: €600,000 in Andorran assets.
• Effective stay: at least 90 days per year.
• Full health insurance and suitable accommodation.
• No criminal record and proven financial solvency.

The deposit is non-remunerated and refundable upon termination of residence, provided the holder has fulfilled all fiscal and social obligations.

➤ To better understand how the guarantee deposit works and how it is managed by the AFA, see The residency deposit in Andorra: origin, evolution and applicable regime.

Property acquisition

Although purchasing a property is not mandatory, it often becomes the natural investment step for most passive residents.
If you wish to identify the area that best suits your needs, we recommend reading Where to live in Andorra: a complete guide to areas, towns and real differences between parishes.

You may also find The Andorran real estate market (2019–2025): prices, new developments and access to housing useful if you are looking for first-hand information on property prices in Andorra.

Purpose and advantages

This residence category is particularly suited to individuals who wish to:

• Benefit from Andorra’s maximum tax rate of 10%, if they become tax residents.
• Maintain geographical freedom and flexible asset management.
• Enjoy a secure and stable European environment.
• Access high-quality banking, healthcare and education services.

Unlike other European models, Andorra requires a real economic link with the country — not just formal registration — which strengthens its credibility before international institutions.

To clearly understand the difference between passive residence (an administrative permit) and tax residence, we recommend the article Types of residence in Andorra: active, passive and tax residence.

Comparison with other residence types

• Self-employed residence: also requires a €50,000 deposit, but it is linked to an active business or professional activity.

➤ To learn more, see the article Self-employed residence in Andorra.

• Employed residence: requires no deposit, as solvency is derived from the employment contract and CASS contributions.
• Temporary or cross-border residence: does not require a deposit either.

➤ For further details on the different residence options available, you can consult Types of residence in Andorra: all administrative modalities

Passive residence, the right choice for many new residents

The Andorran passive residence remains one of the most solid and exclusive ways to establish residence in the Principality.

From its creation in 2002 to the Omnibus Law of 2025, the regime has evolved from €400,000 to €600,000 in required investment and from €15,000 to €50,000 in deposit, strengthening Andorra’s reputation for solvency and international credibility.

As a result, the profile of new applicants has become increasingly qualified and financially robust.

Requirements may become more stringent in the future. For this reason, if you are considering this type of residence, we recommend taking action sooner rather than later.
You can explore what lies ahead in Residence in Andorra: current stability and changes on the horizon.

📞 Are you considering applying for this type of residence and need assistance with the process?

Would you like expert advice on which Andorran assets to invest in, whether financial or real estate-related?

We are at your disposal to help you make informed and secure decisions and to answer any questions you may have.
Do not hesitate to contact us via our Contact form, or, if you prefer, you may Book your meeting for specialised and fully confidential consultancy just below this article.

Last updated: December 2025