Category A Passive Residency
Category A is the most straight forward of all the categories and if the investment of € 400,000 in permissible investments (please see below) is not a concern for you then this is the way forward. Please note that as a passive resident in this category you are not necessarily a tax / fiscal resident as you are required on paper ( and time here is not monitored) to spend a minimum of 90 days per year. To become liable as a tax resident you are required to spend more than 183 days per year so with careful planning you are most likely to be exempt from personal tax in Andorra. You can also choose to become a fiscal resident if that is what you require, very simply by declaring that Andorra is your principle base of economic activity regardless of how long you actually stay here.
In this category most people in effect face a choice of passive residency with or without the "fiscal". For those requiring fiscal residency then Andorra provides a low tax country for that option.Over the coming years if the plans of the OECD, EU and other organisations are to come to fruition and everybody on this planet at some stage will require to become a fiscal resident and tax payer of a specific country .
Please also note that Category A also allows you to have an Andorran Company provided it is not trading or active in Andorra, so that also opens a few options. Whether you need tax / fiscal residency or not Andorra Category A passive residency can offer interesting options.
For applicants under Category A the applicants must:
Show proof of sufficient means to support yourself and family. This is currently proven by bank certificate of 300% of the minimum salary and 100% additional for each dependent, this involves openeing a local account and depositing the required funds currently (for 2017) €35,692.92 and €11,897.64 for each dependent (including ALL children regardless of age). You are not required under this category or any other category to prove the source of income.
- • Proof of private medical insurance valid for Andorra. You will require private medical insurance to satisfy the Immigration requirements for medical coverage in Andorra. The wording of the specific declaration that they require though contains THREE separate insurances and the translation from Catalan causes problems. In effect you require three insurances, namely medical, incapacity and old age. The latter causes the main problem in that insurance against old age simply does not exist. In this latter two policies, they are requiring all residents between the ages of 18 and 60 to have these extra covers. Incapacity is quite straight forward and may well be covered in by a medical insurance policy but old age will not be. For this final category of insurance, they require proof of a pension plan, and proof that is by having signed the pre-mentioned Immigration declaration that simply refers to insurance against old age! We can obtain all of these policies in Andorra where the declaration is guaranteed to be signed and the cost for all three insurance will start at around 1,300 euros annually. Please note that the pension plan portion of the insurance is fully refundable with profits at your 60th birthday. Residents under 18 and over 60 years old only require health insurance which can start at around 890 euros. If you have existing medical cover from an International insurer it may be possible to use this for medical and incapacity but Immigration are now making this very difficult administratively, it is best to speak to me first.
Produce a rental contract or title to a property that complies with Immigration requirements. Under the additional investment requirement (see below) an applicant has 7 months in total from the date of the application to prove the additional investment. This means that if an applicant chooses to purchase property he must submit the "compromis de compra-venda" (purchase agreement) to Immigration, he has one year to then produce title deeds to the property. Alternatively an applicant may rent a property and invest the required investment in Andorran financial instruments under this Category.
Sign an undertaking that they will reside for a minimum of 90 days per year in Andorra.
Provide the appropriate police certificates legalised/Apostillised as required, and we will need to discuss this to determine exactly which police reports you will need and how to obtain them.
Pay to the Government (after the above documents have been accepted) a non-interest bearing bond (fully refundable upon departure) of €50,000 for the head of household and €10,000 for each dependent,
That, INCLUDING the amount above for the bond, they sign an undertaking at the time of application that within a period of one month from the six month birthday of the application for residency ( i.e. SEVEN months from the date of application) they will submit documentary proof that, including the amount paid for the Government bond that they have invested a minimum total amount of €400.000 ( Including the bond already paid) in Andorra in permissible categories of investments. Please scroll down for details of permissible investments in ths category.
If you intend relocating with children, please see my section for relocating to Andorra with a family. where extra documents are required in support of children'a application
The residency is granted initially for a period of 2 years, then for 2, 3 and then every 10 years. At renewal you do not have to be present, the documents required are obtained locally and the process is quite straightforward providing no changes have been arbitrarily made by the resident to areas such as insurance and banks without first seeking my advice.
If you are relocating with your spouse you must prove that you are still married, and I can advise on this relatively simple process of obtaining the correct Apostillised/ Legalised Marriage certificate. You should note that Immigration does not recognise the status of "partner" nor fiancé (e). As an unmarried couple you can apply together and live together but you will be required to pay the single bond each of € 50,000. (Once married or a civil partnership carried out in Andorra you can apply for the refund as you would have paid € 60,000 together as a married couple). The extra investment if not married will then be required also from each partner. Please see below what constitutes this extra investment requirement.
If you are a national of any of the former Eastern European States (Eastern Bloc non EU countries) then until it is announced to the contrary you will require more documentary proof in support of your application. The requirements now demanded by Immigration for nationals of these countries are time consuming, we will need to discuss these requirements in detail, please contact me. These countries include ( but not exclusively) Russia, Ukraine, Belarus, Albania, and all of the now independent but former dependencies of the Russian Federation.
As at February 2014 the former Eastern European States ( Eastern Bloc) now EXCLUDES ALL nationals of EU member states. This is a big change in Andorran policy since up until this date Andorra has not recognised member states of the EU as actually part of the EU for the purposes of Immigration to Andorra. If you have enquired before as a national of an EU country and that includes Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia, then please contact me immediately, the door is now open.
- 1. Property in Andorra. As from 2017 I am informed by Immigration that a local mortgage can count towards the investment requirement. Formerly the equity of 350,000 was required to be invested, this is no longer the case. It can also include the purchase of land but in which case you will have to rent a property as all residents need to prove a livable address. If you purchase land with a view to building then you we will need to "negotiate" with Immigration as to what will satisfy the extra investment requirement since the title deeds may well be delayed. Please note the requirement that It is the head of household who individually must ensure that he or she has invested the full amount. An extremely frustrating situation arose for a couple who jointly purchased an apartment for €500,000. Immigration interpreted that as equal parts for the couple amounting to a value of € 250,000 each, which has meant that the head of household has under invested by €90,000 (notwithstanding who paid what). To rectify this would require a "sale" before the notary from one spouse to another and all the expenses involved, alternatively the head of household can invest a further €90,000 in local financial instruments. This is an example that all is not necessarily so straight forward.
Please note that ANY property that may have been bought in Andorra at some time in the past even before the new law was approved can be used as the extra investment requirement. This means that even if you bought a property 15 years ago it now counts towards the required investment. The value though of all properties accepted by Immigration is the value on the title deed and not necessarily today's market value.
- 2. Investment funds issued by Andorran registered entities, this concerns investment funds issued by local banks, and even a local deposit account. In all cases the funds will be required to be locked into Andorra for the duration of the residency unless they are withdrawn with the intention of satisfying other allowable investments such as property purchase. Interest or profit can be earned without tax or capital gains. Please note though that funds can go down as well as up and this can cause problems at renewals if the extra investment requirement is allowed to fall below value.
3. Shares issued by Andorran registered companies, In practice this is difficult for investing in existing entities for many reasons such as Andorran Company share structure, and transfer by private agreement since there is no stock exchange here. A capital investment though in forming a local Andorran Company can be a viable investment alternative but there are restrictions on how that company can operate since passive residents are not allowed to work in Andorra.
4. Andorran Government Treasuries or Public Company bonds, In 2016 Treasuries were available to the public at a return of 1.65% for 1 year. The current yield or any new offer has not yet been announced for 2018. Public Company bonds are not readily available yet but may be in the future.
5. A straight increase in the bond paid to the Government but non-interest bearing of up to €400.000, at face this may not be an attractive option bearing in mind bank deposits and investments, however it may offer a convenient and more accessible place to "park" the required funds pending, say, a delayed house build or other delays which may otherwise jeopardise your application. At least with this the funds are safe and are not subject to losses or downward revisions!!