Residence in Andorra - Andorra Lawyers

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Residence in Andorra : the different possibilities
Residence in Andorra is basically summarized in three types of residence: active (self-employed), active (employed) or passive.

We will provide the necessary information about all the residence permits in Andorra. It also offers different types of permits for people who may need family reunification or have a certain reputation (cultural, scientific, etc.), such as artists and athletes.

Types of residence permits in Andorra
It is possible to obtain a residence permit in Andorra as long as each and every one of the requirements established by the immigration law in Andorra are met.

There are some specificities that each of us has to take into account to avoid legal problems. This is a type of permit currently available.

Active residence for own account

It is the most common for entrepreneurs who already have a consolidated company in their country and want to reside in Andorra and pay taxes in Andorra.

This type of residence has been changing the requirements to be able to live in Andorra during the last years.

Currently, to obtain this type of residence permit in Andorra for active residence, the following requirements must be met:

Holding more than 21% of the share capital of a company in Andorra.
To be part of the administrative body of that company.
To make a transfer of 50.000€ to the Andorran Financial Authority (AFA) as a deposit.
To reside in Andorra for more than 183 days per year.

Active residence in Andorra as an employee in Andorra

Residence in Andorra can be obtained through Andorran companies that hire you as a worker in the country.

This type of residence permit in Andorra is obtained through an employment contract in the Principality of Andorra.

The company in Andorra must carry out the procedure to obtain the residence permit in Andorra for the worker. This procedure takes about 10 days.

Exercising a professional activity in Andorra

If you have a qualified profession, i.e. you are a lawyer, doctor, engineer, etc. You can apply for a special residence permit, which does not require the constitution of a company in Andorra, nor the procedure of the deposit of 50,000 euros to the AFA.

In these cases, to obtain the residence in Andorra you will have to homologate your university degree in the Principality of Andorra and later open a business in the country to be able to maintain the condition of resident in Andorra.

It is mandatory that you invoice against the degree that you have homologated in the Principality of Andorra.

It is a kind of residence in Andorra on your own account, but with a special authorization that allows you to live in Andorra without the need for

Active residence for professionals with international projection

It is a form of tax residence in Andorra that requires work and professional activities in the country and abroad.

This type of residence in the country, obeys to fulfill the following requirements:

That the company’s turnover is made at least 85% abroad.
The rest of the invoicing must be made in Andorra.
It is necessary that for the residence of professionals with international projection a detailed business plan is made to present with the rest of the procedures before the Government of Andorra so that the holder can obtain the authorization to reside in the country.

Passive residence without lucrative activity

The passive residence in Andorra is adapted for people who want to reside in the country without working.

This method does not require a large amount of time in the Principality of Andorra, as it only requires 90 days per year.

Often for this reason the program is chosen by retired professionals, retired athletes or wealthy people.

Currently 600,000 euros must be invested in the country in order to obtain Andorran passive residency.

Requirements to be fulfilled to obtain residency in Andorra

If you want a better life, better quality of life, you may think that you could live and work in Andorra.

The tax code is unique and many Spaniards choose to live there.

Before you get on board, you should know what should happen during the purchase of the house in Andorra or during the process of incorporation of a company in Andorra.

Therefore, you must keep in mind that both the passive Andorran residence and the active residence, whether it is the type of residence for own account, for others, or of a scientific, cultural or sports nature, require a minimum number of days to reside in Andorra.

It is important that you meet these days in Andorra, otherwise you could lose the Andorran residence due to not spending enough days in your Andorran domicile.

Criteria for tax residency in Andorra

The various criteria for obtaining tax residency in Andorra that we will explain below are also important.

One of the most important criteria to apply for residency in Andorra is to be able to prove the origin of the funds with documents or documentation that allows to see the traceability of the funds.

Another of the criteria and requirements is to present a valid passport or ID card of the persons who are going to obtain any type of residence, whether passive residence or active residence.

Main advantages of having your residence in Andorra on your own account

The easiest way to obtain a residence in Andorra is through the self-employed work permit.

This type of residence is a permit that allows you to reside in the Principality of Andorra through the incorporation of a company in the country.

The self-employed residency also allows family reunification as long as the person to be reunited is the spouse or parents/children and a minimum salary is demonstrated for each person seeking family reunification.

The taxation of Andorran residents

In this other article you will find all the points of interest related to the people who wish to pay their taxes in Andorra, thanks to the authorization of residence in Andorra.

These persons will be subject to pay for the totality of their income obtained in the world in Andorra thanks to the Andorran residence and work.

Therefore, in case you obtain the Andorran residence authorization and therefore you have presented all the necessary documentation, you will be able to file your income tax return (among other taxes) in Andorra.

Personal Income Tax (IRPF)

Introduced as a tax in 2015, the tax is used to impose taxes on income earned by individuals.

Personal income tax must be paid in Andorra by anyone holding a residence and work authorization (or any type of residence) in Andorra. The income to be declared in Andorra is the income obtained worldwide.

The personal income tax rate is a maximum of 10%. It is one of the least taxed countries in Europe.In case you obtain dividends from your Andorran company for the professional activity of your company, you have to know that dividends are completely exempt from taxation in the country. This point is highly attractive compared to neighboring countries. That is why the immigration of businessmen in Andorra is currently a very active immigration.

Other taxes in the Principality

There are important taxes in the country such as the Corporate Tax, which is levied on the profits of the activity of legal entities (Companies) in accordance with Andorran regulations.

This tax has a maximum rate of 10%.

Some expenses can be deducted such as rent, insurance of the house or activity, as long as the contracts are in the name of the company.

These documents are important in order to be able to prove the deduction of the rent as an expense as well as any insurance related to the business activity.

How much does it cost to become a resident in Andorra?

It is important that you first consider what type of resident permit you need.

There are several options. Depending on your activity or if you are seeking an immigration permit through the investment of a property, the cost will be different.

If you want to incorporate your company in the country, count on about 65K€ (50K€ as deposit to the AFA).

Therefore, the cost varies depending on the types of authorizations.

How to start the process to live in Andorra

To start the process of entering Andorra you will have to determine the type of residence you want. In addition, you must satisfy the criteria for the selected types of residence, as well as the usual conditions.

To start living in Andorra you will need a residence permit. The process is carried out through the option of the activity to be carried out in Andorra. If it is done through a business activity, it will be necessary to create the corporate structure before starting the procedures.

The person will obtain the residence in Andorra after two months of that person initiating the process.

If you are overwhelmed by the paperwork, leave everything to us.

How to apply for residency in Andorra?

The actual process of obtaining Andorra residency permits is complicated and requires a series of procedures that can be accessed with the help of our lawyers.

Depending on the type of residency option, the formality varies.

It is important to note that you will need to prepare a criminal record certificate in order to apply for the option to live in Andorra, a valid passport, above all the criminal record must be clean, depending on the type of residence you will need to present a life insurance to the ministry of the interior as well.

In some cases it is also necessary a work contract or a housing contract of the person who will reside in Andorra.

However, if you have a serious illness or a person seeking family reunification has a serious illness, you may encounter some complications and may even find yourself with the invalidity of your procedures.

If you have a positive criminal record, you must present it to the Ministry of the Interior so that it can proceed to an update of the penalties and charges. Within the framework of their proceedings, they will decide whether or not they can grant you residency.

Your marital status is also important. If your marital status shows that you are married, you will be able to regroup your family members. If you are not married, you will not be able to reunify. Although there are some modifications of the law in this aspect.

How to become a resident and what will you get with a tax residence in Andorra?

The different types of residency in Andorra and their demands should be carefully considered.

Tax residency in the principality provides unique benefits both in terms of taxes in Andorra and the high quality of life the country offers to its residents.

High per capita income with relatively low taxation is one of the main reasons for this growth.

Setting up a company in Andorra

We explain in detail how to incorporate your company in the Principality in this other article.

This will allow you to obtain the residence permit and therefore to be a tax resident in Andorra. Having the residence permit in Andorra and being a tax resident will allow you to pay taxes in the country.

Contact us

If you have any doubts about tax residence in Andorra or about any other residence permit, do not hesitate to contact us so that we can help you in particular.

One of the less requested residences is the one for reasons of scientific and cultural interest. If you are interested in it, we have experience in this field.

Therefore, if you want to change your residence to Andorra for any type of residence (including the residence of scientific cultural interest), we can help you with the whole process and avoid all the bureaucracy involved in this process.