Life in Andorra can be incredibly appealing thanks to its high safety standards, quality of living, and one of the most favorable tax structures in Europe. As a result, an increasing number of people are considering relocating to this small principality in the Pyrenees.

Curiously, the Andorran residence card has the same colour as the American one, green, which is why the Andorran residence permit is colloquially known as the “green card”.

In this article we will explain the main ways to obtain the Andorran green card.

Pathways to obtain an Andorran green card

Andorra has a range of channels that allow individuals to secure their legal stay in the country:

• Active residence:
  • For employed workers: issued if you hold an employment contract with a business in Andorra.
  • For self-employed individuals (residència per compte propi): intended for those who plan to start a local company or practice a liberal profession.
• Passive residence: mainly for people who can prove they have adequate financial resources or intend to invest in Andorra.
• Digital nomad visa: tailored for remote employees or freelancers offering services to organizations outside the country.
• Family reunification: applicable to spouses, children, and sometimes additional family members connected to an existing cardholder.
• Medical or care-related stay: granted for individuals needing specialized health treatment or residency in a senior care facility.

Even though Andorra has multiple options, we will primarily discuss two major pathways: self-employed active residence and passive residence. These two are especially popular with entrepreneurs, founders, and those who are retired or living on private income.

Active residence for the self-employed

Also known by its Catalan name, “residència per compte propi”, this type of permit enables you to move to Andorra to operate your own venture. In practical terms, you’ll establish (or join) an Andorran company to generate local income.

The process typically starts by founding a domestic entity, most often a Societat Limitada (SL). After completing the company setup and naming yourself as its administrator, you can then initiate the application for a self-employed permit.

This model appeals significantly to entrepreneurs, digital professionals, and freelancers who aim to utilize Andorra’s tax advantages while running an active company in the country.

Moreover, this type of green card obliges you to spend at least 183 days each year in Andorra, making it fitting for those who genuinely plan on moving their primary operations to the principality.

Key conditions

To successfully be approved for this permit, you must meet the following standards:

• Establish a company in Andorra: commonly by creating an SL and owning at least 20% of its equity.
• Pay a deposit to the Andorran Financial Authority (AFA): you’ll need to place €50,000 in a non-interest-bearing account, which is returned once you no longer hold your green card (specific liberal professionals can sometimes avoid this requirement).
• Provide valid housing: by either purchasing property locally or signing a long-term rental contract.
• Demonstrate good conduct and health: present a clean criminal record plus a medical certificate from Andorra.
• Operate an active business: the government may want confirmation that your venture is functioning or has the capacity to generate revenue.
• Spend 183 days in the country: to keep this administrative status, Andorra must be your primary home.

A noteworthy point: certain professions that require official qualifications—lawyers, doctors, architects, engineers, and so forth—may be exempt from the €50,000 deposit if they secure professional registration within Andorra.

Procedure

Generally, the stages are as follows:

• Form your company and seek approval for foreign investment if you’re not yet a cardholder.
• Obtain a tax registration number (NRT) for your newly established enterprise.
• Deposit the required amount at the AFA (unless you meet exemption criteria).
• Hand in your full application to Andorran immigration, which includes criminal background documents, Andorran medical checks, and proof of accommodation.

If your submission is approved, you’ll be issued a self-employed active residence permit.

The initial validity usually extends for one year, followed by renewals every two years, and eventually can last up to a decade.

During each renewal, you must still satisfy the relevant guidelines.

Passive residency

“Residència pasiva” is a distinct category, designed for individuals with ample resources to live in Andorra without needing local employment income.

It’s commonly referred to as “Andorran residency by investment”, as one frequent path is to invest a certain amount in real estate, local financial products, or shares in a homegrown company.

Unlike the active status, passive cardholders only need to stay at least 90 days in the principality annually. This makes it particularly enticing for retirees, investors, or people whose main income stems from outside Andorra.

Requirements

Although this path involves a higher financial threshold, it does not necessitate forming a local company. Key criteria include:

• Minimum investment: typically around €600,000 placed in real estate within Andorra, domestic financial instruments, or holdings in an Andorran company. Part of this sum (at least €47,500) must remain deposited with the AFA.
• Proof of sufficient income: you have to show you can support your lifestyle independently. For instance, in 2025, you’d need at least 300% of the Andorran minimum wage per year, plus an added 100% for each dependent.
• Clean criminal record and medical certificate.
• Private health coverage.
• Local address in Andorra: either rented or owned residence.

Application steps

When applying for passive status, you begin by investing in one of the state-approved categories, followed by placing the required AFA deposit. You then collect documentation proving financial stability, acquire health insurance, and secure a local housing contract. All of this is included in your application to Andorran immigration.

Upon acceptance, you receive your green card, which you must renew periodically. A passive holder is not allowed to be an employee of an Andorran enterprise, but it is permissible to be an administrator of a local business and to collect passive income sources.

Comparing active and passive approaches

The biggest contrasts between these two routes involve time spent in the country and permission to work. An active status requires living in Andorra for the majority of the year (183 days) and grants the right to earn revenue from a local enterprise.

In both situations, renewals are periodic and will eventually extend to ten-year intervals unless the conditions are not met.

After two decades in Andorra, you could potentially apply for an Andorran passport.

Distinguishing administrative vs. tax residence

It’s important to recognize the difference between an administrative permit (the immigration card) and tax resident status (the requirement or ability to pay taxes in Andorra). Holding an Andorran green card does not automatically guarantee you count as a tax resident for foreign authorities.

To actually become a tax resident in Andorra, you’ll generally need to be physically present for a minimum of 183 days a year and conduct your principal business affairs in the country.

This distinction is crucial if you have a passive card but continue residing primarily elsewhere, or if your major financial interests remain abroad. To avoid potential tax complications in other nations, it’s often best to ensure Andorra is unambiguously your primary location.

Brief look at Andorran taxes

For those who do attain tax resident status, Andorra’s tax regime is highly advantageous:

• Personal income tax (IRPF) tops out at 10%.
• Earnings up to €24,000 are untaxed.
• Income up to €40,000 is taxed at 5%.
• Many categories of capital gains, interest, and dividends are exempt or taxed at just 10%, depending on specific rules.
• There’s no wealth tax or inheritance tax, and the standard VAT (IGI) is merely 4.5%.

All these factors make Andorra exceedingly attractive for business owners, investors, and individuals with a considerable net worth who want legitimate ways to reduce their overall tax burden.

Interested in obtaining an Andorran green card?

If you’re thinking of pursuing an Andorran green card, whether it’s the self-employed active type or a passive investment-based status, feel free to reach out to us or download our comprehensive resource, “The ultimate handbook for settling in Andorra”, available for free below.

Also, our dedicated advisors are here to evaluate your specific situation, so feel free to contact us.

References

• https://www.bopa.ad/Documents/Detall?doc=CGL_2024_02_21_14_02_59
• https://www.bopa.ad/bopa/034148/Pagines/CGL20221219_11_51_10.aspx
• https://www.afa.ad/
• https://www.consellgeneral.ad/ca/arxiu/arxiu-de-lleis-i-textos-aprovats-en-legislatures-anteriors/vi-legislatura-2011-2015/copy_of_lleis-aprovades/llei-5-2014-del-24-d2019abril-de-l2019impost-sobre-la-renda-de-les-persones-fisiq