Andorra has updated the rules for the investment residence permit in 2026. Find out how the investment threshold has changed, why deposits have become non-refundable, and who is suitable for the alternative through the Housing Fund from €400,000

On January 22, the Andorran Parliament approved a major reform of the passive residence program for investors from various countries, including citizens of Turkey, Argentina, the United Kingdom, France and Spain. The new law significantly increases the minimum investment requirements, changes the financial model of state fees and at the same time introduces an alternative route with a lower entry threshold. The reform signals the principality's strategic course towards more controlled growth and attracting a limited circle of wealthy residents.

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Minimum threshold increased to 1 million euros

The key change is the increase in the minimum investment amount for a passive residence permit from 600,000 to 1,000,000 euros. The investment must be made in the Andorran economy on a permanent and “effective” basis. Among the permitted areas of investment:

- Real estate in Andorra;

- Shares and shares of Andorran companies;

- Government bonds and other debt instruments;

- Collective investment funds under Andorran regulation;

- Insurance and other financial products issued by Andorran entities.

For collective investment funds, the law sets restrictions: the maximum investment period is 36 months. After that, the investor is obliged to redirect the funds to other permissible assets of Andorra, confirming this with documentation.

If the investor chooses real estate, a separate rule applies: each object must have a value of more than 800,000 euros, which effectively excludes the mass housing segment from the program.

Alternative: investment of 400,000 euros through the Housing Fund

Despite the increase in the main threshold, the law introduces an alternative route - an investment of 400,000 euros through the state Housing Fund. This mechanism is aimed at the development of affordable social housing and operates as a public-private model.

The reduced threshold applies only if direct or indirect investment in the fund is made on a permanent and effective basis. The detailed conditions for the operation of the fund are regulated by separate regulatory acts, to which the law refers.

Non-refundable payments instead of deposits

Another fundamental change is the abolition of returned deposits. Previously, applicants paid a deposit to the Andorran Financial Authority (AFA) with the possibility of a full refund in the future, but now these payments become final state fees.

The new structure provides for:

- €50,000 for the main applicant;

- €12,000 for each dependent.

These amounts are non-refundable, except in cases of refusal of the initial immigration permit. Once the application is approved, the funds are transferred to the Ministry of Finance and remain at the disposal of the state.

Investment deadlines and control

Applicants have six months from the date of submitting the application for an immigration permit to implement the investment. In the event of force majeure or the fault of a third party, this deadline may be extended by another six months.

Failure to comply with the requirements or to submit supporting documents within the established deadlines will result in the cancellation of the residence permit without the right to engage in gainful activity.

Exceptions and special categories

Elite athletes, artists and scientists with the status of “talented person” will retain access to the previous model with the return of deposits. According to tax expert Marc Cantavella Soler, this allows Andorra to continue to attract famous representatives of culture and sport.

The law also extends the non-refundable payment model to self-employed individuals (residència activa per compte propi). At the same time, for entrepreneurs who create companies in the digital economy, innovation or high technology sectors, the payment of €50,000 is abolished.

Transitional period and “old” applications

Applicants who submitted requests for foreign investment or quota reservations before the parliamentary approval of the law on January 22nd are subject to the previous rules. There is also a six-month transitional period for the taxation of real estate transactions, if the transactions were actually concluded before the law entered into force.

The law will enter into force upon publication in the Official Gazette of Andorra, usually within a few days of approval.

Who can still benefit from Andorra’s passive residence permit?

Despite the tightening of requirements, Andorra remains attractive to those seeking tax residency in Europe outside the EU, and not necessarily a place of permanent residence. The program may be of interest to:

- Wealthy individuals and investors;

- Business owners outside the EU;

- People with a stable passive income.

The principality's tax regime remains one of the mildest in Europe: income tax – up to 10%, dividends and inheritance tax – 0%, capital gains tax – up to 10%.

In conclusion, the reform of the passive residence permit demonstrates Andorra's clear intention to move from an “affordable tax alternative” to a more exclusive jurisdiction with controlled demographic and investment growth.

The change in the rules of the investment residence permit in Andorra makes professional legal support critically important. A business lawyer will help you choose the right investment model, prepare documents, minimize tax risks and accompany the relocation of a company or assets.

Contact a lawyer to adapt to the new Andorran rules without mistakes.

Let's remind you! Where is the cheapest place to live in the European Union in 2026? We have already told you which EU countries have the lowest cost of living, and compared prices for food, transport, energy, housing and everyday expenses before moving.

Photo - generated by Gemini

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