The recent changes in Andorra
Since 2023, Andorra has decided to require proficiency in Catalan to obtain and maintain residency, along with a deposit of 50,000 euros for active residency.
Despite its popularity for low taxes and attracting talent and capital, Andorra faces challenges due to its small size and geographical location.
The real estate market has seen a significant increase in housing searches, surpassing even Spain, leading to skyrocketing prices.
The Andorran government now aims to attract individuals with specific profiles that benefit its digital economy, thereby regulating the influx of new residents.
50,000 euros and Catalan
The recent changes in Andorra involve two key aspects:
On one hand, the new requirement for basic knowledge of Catalan, at levels A1 and A2 starting in 2024.
While it may seem a minor inconvenience for tax nomads coming from Spain or Hispanic America, it constitutes a significant barrier for those from other origins.
On the other hand, the significant increase in financial requirements to obtain active residency, raising the required deposit to 50,000 euros (which cannot be invested or used, only recovered upon leaving the country).
These changes reflect an adjustment in Andorra’s immigration policies, now focused on favoring the digital economy and digital nomads over the mass influx of new residents.
Residency for Digital Nomads!
The Digital Nomad residency is designed for individuals who engage in professional activities outside the Principality of Andorra.
These individuals can become residents in Andorra both administratively and fiscally, paying taxes as individuals under the Andorran tax regime but based on income from professional activities outside Andorra.
For example, this would apply to a self-employed worker providing services to a company outside Andorra or carrying out activities for a company they benefit from as a partner (also outside Andorra), or an employee hired by an employer outside the Principality.
Requirements for the Digital Nomad Visa
Who is interested in residency in Andorra?
It is clear where Andorra is heading with these changes.
Although at first, it may seem to discourage less wealthy individuals, it has opened a new path to digitalization and innovation.
Currently, the two profiles that would benefit the most are:
- High net worth individuals with both active and passive residency. With annual incomes exceeding €200,000 (a rough estimate), it remains a top option from a tax perspective in the European landscape, despite its obvious drawbacks such as location, size, required days, etc.
- Digital Nomads with a good volume of business. Starting with monthly incomes of €5,000 and preferring to manage their wealth rather than participate in social insurance.
If you want to obtain tax residency, set up a company in Andorra or wish to receive a comprehensive analysis of your situation to discover your best options, simply fill out the form below and let us know your case and needs.
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