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New Digital Nomad Visa in Andorra: Taxes and Requirements


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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

First, you need a favorable resolution from the ministry after submitting the application if you believe your profile matches what is being sought.

Regarding the required profile, the law states:

“For foreign individuals who contribute to the development of the digital economy, entrepreneurship, or innovation in the Principality of Andorra.”

Unlike other permits, such as active residency that require you to stay in Andorra for more than 183 days to be considered a tax resident, in this case, it is only 90 days!

This solves one of the biggest “drawbacks” of the Andorran option, which is having to spend so much mandatory time in such a remote location.

In any case, it is important to remember that you must still maintain a habitual residence (rented or purchased) in Andorra, and these 90 days do not give you the right to spend the rest of the time in another country without potential conflicts regarding your tax residency.

It is important to analyze which countries you want to include in your strategy (if you plan to spend time in several), your stay in them, and how this could pose a greater or lesser tax risk.

Moreover, there is no obligation to deposit 50,000€ due to the nature of this residency:

Unlike the classic active residency, the Digital Nomad residency does not allow you to engage in economic activities within Andorra; instead, it is designed for a global individual who operates with foreign companies and can sustain themselves.

As a result, not only is there no need to make the 50,000€ deposit, but you also do not have to pay the mandatory self-employed fee (which already exceeds 500€ per month).

Regarding the “sufficient economic means” for the applicant and any dependents, Andorra has a clear definition of what is required:

3 times the Andorran minimum wage for the applicant + 1 extra minimum wage per dependent.

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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