First of all, it is important to clarify that it is not necessary to obtain Andorran citizenship to reside in Andorra. Residence and citizenship are two different concepts: you can be a resident without being an Andorran citizen, but you must be a resident to apply for citizenship.

If you are only interested in obtaining residency, we recommend our article on Andorran active residency (the most common) and passive residency (intended for high net worth individuals).

If you are interested in understanding how to obtain Andorran citizenship, we explain it below.

How to obtain Andorran citizenship

The first requirement to become Andorran is to be willing to renounce any other citizenship, as it is not possible to have any other citizenship apart from Andorran citizenship.

Any person wishing to initiate this process must expressly renounce any other citizenship or citizenships held.

There are other requirements for obtaining citizenship (we will discuss them in the next section), and if these are met the applicant will have a period of five years to pass an exam in which their knowledge of the Catalan language will be assessed, as well as the history and geography of the Principality.

Who can apply for the citizenship?

The requirements are different for adults and for minors. Below, we explain, in each case, who can obtain the citizenship.

Adults

May make the application those who:

• Have resided at least fifteen years in Andorra and have a natural grandparent from the Principality.
• Have resided for at least three years in Andorra and married an Andorran (regardless of whether the three years of residence were completed before or after the marriage took place).
• Have lived at least twenty years in Andorra and can prove it.
• Have lived at least ten years in Andorra and have completed their compulsory schooling in the Principality.

Minors

Eligible for citizenship shall be minors who:

• Were born in Andorra, of Andorran father and/or mother.
• Were born in another country but are children of an Andorran father or mother, born in Andorra.
• Are under fourteen years of age, adopted by a person with Andorran citizenship or who has resided at least ten years in the territory (if less time of residence, a provisional passport will be granted).
• Born in the Principality and either of their parents is a resident, even if they do not have the citizenship. In this case, the parent must have at least ten years of residence, otherwise the child may only have a provisional passport.

Benefits of being a citizen

Being an Andorran citizen has the clear advantage of being able to live in the country freely whenever you want. This is a very valuable right, especially if we take into account the entry route to the Principality for non-residents:

• Active residency (“residència activa”): this residency permit typically requires to work in Andorra, either as an employee or as an entrepreneur setting up a local business. The  resident is required to spend at least 183 days per year in the country, demonstrating that Andorra his your primary place of residence.
• Passive residency (“residència passiva”): this permit, commonly known as Golden Visa, is geared toward individuals who do not necessarily want to or need to work in Andorra. This option may be appealing for retirees, high-net-worth individuals, or investors seeking to benefit from Andorra’s low tax rates without actively participating in the local labor market. Passive residents are subject to certain investment requirements (currently around €600,000).

The non-national who wishes to live there must make a deposit with the Andorran Financial Authority (AFA) which, depending on the number of people in his/her care, can start at €47,500.

Obviously, the Andorran national is exempt from all these requirements:

• He/she does not have to have money immobilized and unpaid in the AFA for years
• He/she does not run the risk of losing the right to reside in the country if he/she does not spend enough days in the country: an Andorran will always have the right to return to live in Andorra

Among the drawbacks is the fact that Andorra does not have the most powerful passport in the world, and that you may need visas to visit certain countries.

An incomparable fiscal framework

Andorra offers an exceptionally favorable tax environment for its tax residents:

• Low personal income tax: the top bracket for personal income tax is just 10%, significantly lower than in many neighboring European countries.
• Low or no capital gains tax: foreign non-real-estate capital gains or capital gains from company shares held for at least 10 years are tax-exempt. Otherwise, capital gains are taxed up to 10%.
• No wealth or inheritance tax: Andorra does not impose any inheritance or wealth taxes, making it an attractive jurisdiction for long-term estate planning.
• 0% tax on local dividends: dividends paid by Andorran companies to local tax residents or non-residents are not subject to additional taxes in Andorra.
• Low VAT (IGI): the general indirect tax (IGI) rate is only 4.5%, much lower than the standard VAT rates across Europe.

However, this tax framework is only available to tax residents of Andorra, and the tax residency status can be easily lost if the administrative residency is withdrawn, for example, due to not meeting the minimum stay requirements in the country.

Are you interested in residing in Andorra?

If you are considering moving to Andorra, andorran citizenship is a very distant horizon, and we recommend start by reading the “The definitive guide to living in Andorra” report, with complete information on Andorran taxation, residence and society.

And, of course, if you have any questions, please contact us. AndorraInc’s team of specialists can help you.

Sources:

• https://www.e-tramits.ad/tramits/ca/demanda-de-nacionalitat—10-anys-de-residencia-i-escolaritat-obligatoria/p/GV000445
• https://ca.wikipedia.org/wiki/Nacionalitat_andorrana
• https://www.consellgeneral.ad/fitxers/documents/lleis-1989-2002/llei-qualificada-de-la-nacionalitat.pdf
• 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-fisiques