Andorra's passive residency regime — the residencia pasiva, formally residence without lucrative activity — has been the family-office choice nobody talks about loudly for the last decade. Two consecutive reforms in 2025 and 2026 changed the maths.

What was reformed, and when

Llei Òmnibus 1, enacted in March 2025, raised the capital threshold for passive residency from EUR 600,000 to EUR 800,000. Eleven months later, Llei Òmnibus 2 (February 2026) raised it again to EUR 1,000,000 and reclassified the AFA payment from a refundable deposit to a non-refundable contribution to the state. The reforms also introduced a EUR 400,000 alternative route via the Andorran Housing Fund, intended to channel new capital into housing supply rather than purely into financial assets.

The current passive residency stack (June 2026)

  • Capital requirement: EUR 1,000,000 deployed in qualifying Andorran economic assets, OR EUR 400,000 directed to the Andorran Housing Fund.
  • EUR 50,000 non-refundable payment to the Autoritat Financera Andorrana (AFA), the financial-services regulator.
  • EUR 12,000 non-refundable per dependant, in addition to the principal capital requirement (dependants do not duplicate the EUR 1M).
  • Physical presence: 90 days per calendar year.
  • Renewal cycle: 2 + 2 + 3 years, then 10-year cycles thereafter, subject to continued compliance.

The income tax position

Andorran personal income tax (IRPF) is capped at 10 per cent of taxable income above EUR 40,000, with a 5 per cent band between EUR 24,000 and EUR 40,000 and a tax-free allowance below. There is no wealth tax, no inheritance tax in any practical sense, no gift tax, and no exit tax of the kind Spain has been threatening. The headline simplicity is the appeal.

What changed materially with Llei Òmnibus 2

The EUR 50,000 AFA payment was, pre-2026, a refundable deposit that could be reclaimed on clean departure. Under Llei Òmnibus 2 it is non-refundable. This is not a small detail. For a family making a fifteen-year commitment, the EUR 50,000 was previously a known and bounded irritation; it is now a sunk cost. The EUR 12,000 per-dependant payment is also non-refundable, which compounds for larger families.

Why the principality reformed

The reform was driven by a combination of pressure on the housing market — the country's population is approximately 85,000 and several of its parishes have been losing residents to rising rents — and the political appetite to convert what had been seen as a fiscal-only residency play into a contribution to Andorran public investment. The reforms also shift the demographic of likely applicants: a typical UHNWI relocator is unaffected by the higher threshold, but the EUR 600,000-to-EUR-800,000 tier of applicant has effectively been priced out unless they take the Housing Fund route.

Practical effect on residency planning

For a family currently weighing Andorra against alternatives, the post-2026 maths look like this. EUR 1,000,000 deployed in qualifying assets (residential property is the most common vehicle) plus the EUR 50,000 AFA payment plus EUR 24,000 to EUR 48,000 in non-refundable per-dependant payments for two to four dependants. Against that, an annual income tax bill capped at roughly 10 per cent on income above EUR 40,000 per person, with no wealth tax, no inheritance tax, and a 90-day-per-year physical presence requirement that is genuinely workable for a London-based family.

Source: Govern d'Andorra — Residència sense treball (autorització inicial)