The concept of the digital nomad, a professional who works remotely and does not spend the entire year in the same location, is becoming increasingly common.

Andorra recently recognized this and attempted to join the countries aiming to attract this type of resident by implementing a visa for digital nomads introduced in 2022.

However, as we will now see, obtaining this type of visa presents several complications.

What is a digital nomad?

According to Andorran legislation, a digital nomad is defined as a person who does not need a specific geographic location to perform their work and uses telecommunications and technology to carry out their professional activities.

The original definition pointed clearly to content creators, entrepreneurs, and especially well-paid contractors for foreign companies.

What is the digital nomad visa in Andorra?

The digital nomad visa in Andorra is a new type of residence permit that complements the existing active and passive permits.

It is designed for foreign individuals who:

• Conduct all their work using telecommunications and technological means (computer, online communication, social networks, etc.)
• Do not require a specific geographic location to perform their work
• Provide services to clients or entities not residing in the Principality of Andorra

What are the benefits of this digital nomad visa?

Andorra has attracted thousands of entrepreneurs, digital nomads, and businessmen over the past decade who have been constrained by high and inflexible entry requirements (obligation to invest in the country, make a deposit in the AFA, pay to the CASS, reside more than 183 days, etc).

This new permit was supposed to offer a much easier and flexible entry to the country for the following reasons:

• The digital nomad skips the deposit of € 50,000 in front of the Andorran financial authority.
• There is no obligation to establish a company to be a tax resident.
• There is no obligation to pay to the CASS (social security), but life insurance must be paid.
• The minimum stay requirement demanded by the Andorran authority is 90 days.
• Allows to be a tax resident in Andorra if the digital nomad meets the requirements established in the IRPF law.

What are the requirements?

The most distinctive feature of obtaining the digital nomad residence permit is that it requires approval from the government of Andorra, who seek profiles that contribute to the development of the digital economy, entrepreneurship, or innovation in the Principality of Andorra.

To be eligible for this visa, you must meet all the following requirements:

• Approval from the Ministry of Economy: you must obtain a favorable decision from the ministry responsible for the economy that recognizes you as a person working remotely using telecommunications and technology.
• A duly completed and accepted application for residence without work authorization.
• Sworn statement of criminal record.
• Sufficient economic means: it is essential to demonstrate that you have the necessary financial resources to reside in Andorra for the duration of the visa. The specific details about how much you need will be established by regulation.
• Documented proof that you own or rent a dwelling that meets the minimum habitability conditions required by regulation.
• Commitment to establish effective residence in Andorra for a minimum of 90 days per calendar year.
• Proof and maintenance of health and disability insurance coverage for the applicant in Andorra.
• Undergo the relevant medical tests in Andorra.

How to obtain approval?

As we mentioned, the most crucial requirement is to obtain a favorable resolution from the ministry responsible for the economy to be considered a person who does not require a specific geographic location and uses telecommunications and technology.

To achieve this, the digital nomad must comply with what is specified in the Digital Economy Regulation developed by Decree 212/2023, dated May 10, 2023. Specifically, the following documentation is requested from the applicant:

• Passport or ID card.
• Sworn declaration that the applicant does not require a specific geographic location to perform their work and uses telecommunications and technology, describing their work as thoroughly as possible.
• Any other document deemed appropriate to substantiate the application, such as employer certificates or company certificates confirming that the worker or freelancer can perform their work remotely.

Is it easy to get this authorization?

No, it is not.

Although on paper this visa sounded like a very attractive option, in reality it has not been so: even in cases where the applicant met all the requirements, we have found that the Ministry denies authorization and makes it impossible to obtain the visa.

Yes, some of our clients have been able to obtain it, but on our experience the approval of the permit is somehow arbitrary. For that reason, for clients who are in a hurry to obtain residency or who do not have a markedly innovative profile, we usually recommend going directly through the active residency route.

The alternative of the active residence

Until the arrival of the digital nomad visa, the only way of entry for non-residents who wanted to carry out a self-employed activity from Andorra was active residence.

Unlike passive residence, aimed at retirees and annuitants, active residence gives the right to carry out a professional activity in the country.

The problem is that Andorran conditions are so advantageous that our small country has been overwhelmed by the number of people eager to obtain this residence visa. So much so that in 2018, with the intention of qualitatively filtering, a mandatory deposit of €15,000 on the Andorran Financial Authority was introduced for every new active resident.

Far from reducing demand, it continued to grow at such a rate that in 2023 it was raised again, this time to €50,000.

This deposit is returned to the interested party when he or she terminates his or her residency (because he or she leaves the country or obtains another type of visa), but it remains a considerable obstacle due to the large amount and because it is not remunerated, which means that over the years it is consumed by inflation.

Am I in time to move to Andorra?

Despite recent tightening of entry requirements, the pace of arrivals has not slowed and the government is now even talking about implementing a quota system that could make entry into the country even more difficult.

However, in our opinion, although the conditions are more restrictive than a few years ago, it is still not too late to obtain Andorran residency, but when a client is unsure whether to move this year or next, we always recommend that the sooner the better.

If you are interested in changing your tax residence to Andorra and want to understand more about the country, we recommend reading the report “The definitive guide to living in Andorra”.

Of course, for any questions you can contact us without obligation.

Sources

• https://www.bopa.ad/bopa/034148/Pagines/CGL20221219_11_51_10.aspx
• 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
• https://www.afa.ad/