Andorra

What amounts are required for passive residence in 2026?

The regime has been tightened in several stages. The investment threshold in Andorran assets, long set at €600,000, was increased to €1 million from 2026 onwards (Govern d’Andorra). A significantly lower amount remains available where the investment is made, directly or indirectly, in the Andorran housing fund, a mechanism designed to channel capital towards a housing market under pressure. This is supplemented by a €50,000 deposit with the Andorran financial authority, increased by an additional amount for each dependant. One important change should be noted: this deposit, which was previously refunded when the status ended, has become definitive and non-refundable. These amounts and arrangements change regularly and must be confirmed at the time the application is filed, rather than based on outdated documentation.

Are ninety days of presence sufficient?

For maintaining the permit, yes. For being considered an Andorran tax resident, no — and this is the most common misconception regarding this destination. Passive residence status requires a minimum presence of ninety days per year, an administrative requirement linked to the residence permit. Tax residence is based on different criteria: either a presence of 183 days, or the location of the individual’s centre of vital interests in Andorra. A person holding an Andorran permit but spending most of the year elsewhere is not an Andorran tax resident, cannot rely on the Franco-Andorran tax treaty, and remains exposed to being treated as resident in their country of origin. The residence permit and the tax regime are not one and the same, and building a project around the ninety-day requirement means effectively acquiring only half of what one believes one is acquiring.

How does Andorran personal income tax work?

Personal income tax is progressive, with a short tax scale. A first band of income is exempt, an intermediate band is taxed at 5%, and the top marginal rate is capped at 10% (Govern d’Andorra). This cap is the defining feature of the system: regardless of the level of income, the tax burden does not exceed this rate, distinguishing Andorra from European jurisdictions with broader progressive tax scales. Capital gains on the disposal of shareholdings benefit from favourable treatment, subject to conditions relating to the holding period and percentage of ownership. There is no wealth tax, inheritance tax or gift tax, making the jurisdiction particularly relevant for family wealth transfers. Dividends sourced in Andorra are subject to a specific regime designed to avoid economic double taxation.

Is Andorra suitable for an active entrepreneur?

Very much so, provided they are prepared to genuinely live there. A consultant, software publisher or creator can establish an Andorran company, obtain prior foreign investment authorisation, conduct their business from the territory and bear 10% corporate income tax, followed by a maximum 10% on their remuneration and distributions (Govern d’Andorra). The overall tax burden compares favourably with almost any other European jurisdiction. The trade-offs are geographical and practical: there is no airport, road travel to Toulouse or Barcelona takes around three hours, the domestic market is limited to approximately 80,000 inhabitants, and the banking system is concentrated among a very small number of institutions whose onboarding procedures are demanding. The profile that works best is one for whom the mountains are a lifestyle choice rather than a compromise.

What French tax scrutiny should be expected after moving to Andorra?

As Andorra is not a member of the European Union, the conditions for deferring payment of French exit tax differ from those applicable to a European destination, while still benefiting from the existence of a tax treaty and the assistance mechanisms associated with it. This parameter should be modelled precisely where significant shareholdings are involved. The geographical proximity calls for particular attention: the ease of returning to France makes the household criterion all the more sensitive, and a situation in which the family remains in Toulouse or Perpignan while the taxpayer claims to reside in Andorra la Vella would not withstand scrutiny. French-source income that is retained remains taxable under the rules applicable to non-residents, and French real estate wealth tax (IFI) continues to apply to your French assets.

Is there a tax treaty between France and Andorra?

Yes, and it is relatively recent when viewed in the context of relations between the two countries. A convention for the avoidance of double taxation has linked France and the Principality since 2013, bringing an end to decades without a tax treaty (list of tax treaties concluded by France). It provides tie-breaker rules in cases of dual residence and establishes mechanisms for eliminating double taxation. However, it also contains a clause allowing France, in certain situations, to continue taxing its nationals under its domestic legislation, which limits the scope of the protection. A robust Andorran relocation project therefore requires genuine establishment in the Principality; the treaty alone is not sufficient.

How much are Andorran social security contributions?

Twenty-two per cent, and this rate is often overlooked in comparisons. The Andorran social security system charges 22% of gross salary for an employee, split between 15.5% payable by the employer and 6.5% payable by the employee (Centre des liaisons européennes et internationales de sécurité sociale). A self-employed worker contributes on a basis linked to the average Andorran salary, adjusted according to turnover and net income for the previous financial year. Of the 22%, one portion finances healthcare and the remainder pensions. For an entrepreneur with active residence, this cost can weigh more heavily than personal income tax, which is capped at 10%.

How is succession dealt with for an Andorran resident?

In the absence of a specific treaty, which creates a significant asymmetry. Andorra levies neither inheritance nor gift tax, whereas France applies its domestic rules: assets located in France are taxable regardless of the deceased’s residence, and the worldwide estate is taxable where the heir has been resident in France for at least six of the ten years preceding the transfer (BOFiP, territoriality of inheritance and transfer taxes). For a French family whose children have remained on the other side of the border, less than three hours away by road, this situation is common and rarely anticipated. It needs to be addressed through advance structuring, several years before the transfer.

Is the number of Andorran residence permits limited?

Yes, through annual quotas set by the government, and this is a significant practical constraint. Immigration authorisations for residence without gainful employment, as well as residence and work permits, are subject to quotas established periodically; once a quota has been exhausted, applications are no longer processed until the next quota becomes available (Govern d’Andorra). This regulation, combined with the scarcity of housing in a country covering less than 500 square kilometres, means that actual timelines are significantly longer than online guides might suggest. We check the status of the quota before commencing a procedure; otherwise, the timetable communicated to the client may not hold.

Do Andorran banks report information to the French authorities?

Yes, since the Principality joined the automatic exchange of information framework. Andorran financial institutions apply the OECD Common Reporting Standard and report annually on accounts held by non-residents. Furthermore, Andorra is not included on France’s list of non-cooperative states and territories (order of 15 April 2026). The era of Andorran banking secrecy, which still exists in the popular imagination, came to an end in the mid-2010s. As long as you remain a French tax resident, an Andorran bank account must be reported annually, failing which a penalty may apply per account and per year (BOFiP, declaration of accounts held outside France).

What schooling options are available for French children in Andorra?

Three education systems coexist within the territory, which is unique: a French system, a Spanish system and an Andorran system, all publicly funded and free of charge. The French stream follows the curriculum of the French Ministry of Education and allows continuity of schooling in the event of a return to France, which clearly distinguishes Andorra from most of the destinations we cover, where French education is private and expensive. Places nevertheless remain limited and depend on the municipality of residence. For a family with school-age children, this factor can weigh just as heavily as taxation, and it is clearly a point in favour of the Principality.

Does the Andorran property market make it easy to find accommodation?

With difficulty, and this has become the main obstacle to relocation. The country has fewer than 80,000 inhabitants spread across mountainous territory where developable land is scarce, while foreign demand has driven property prices and rents sharply higher in recent years. The authorities have also raised the passive-residence investment threshold to €1 million from 2026, with a reduced amount where the investment is made in the Andorran housing fund (Govern d’Andorra). The policy direction is clear: the country regulates foreign immigration, and a relocation project must allow for a realistic property-search period.

Does the exit tax work differently when moving to Andorra?

Yes, in a favourable way. Payment deferral is granted automatically when the taxpayer’s domicile is transferred to a state that has concluded with France both an administrative assistance agreement to combat tax fraud and an assistance agreement for tax collection, which has been the case for Andorra since the relevant treaty framework entered into force (Article 167 bis of the French General Tax Code). This avoids having to tie up guarantees, unlike a move to a destination without the relevant treaty arrangements. The tax is subsequently discharged after two years, or five years where the securities exceed €2,570,000 (French tax administration). For a business owner preparing for a sale, the resulting cash-flow difference can be substantial.

How does Coreway Consulting assist with relocation to Andorra?

We first determine whether active or passive residence is appropriate, an assessment that depends on your business activity, assets and the number of days you can realistically spend in the Principality. We then verify that the proposed physical-presence threshold will actually produce the intended tax outcome, an area in which many Andorran projects fail without this being immediately apparent. We handle the procedures with our local correspondents: foreign investment authorisation, company incorporation where applicable, registration formalities, banking onboarding and property searches. At the same time, we address the departure from French tax residence with the relevant advisers.