Andorra 2026: IRPF capped at 10%, passive residence requiring a €1,000,000 investment (or €400,000 via the Housing Fund), the Fat FIRE play closest to Paris and Barcelona

Andorra's personal income tax (Llei 5/2014 of April 24, on the income of individuals) remains among the lightest in Western Europe: 0% up to €24,000 of taxable income, 5% between €24,000 and €40,000, and 10% above. There is no wealth tax and no inheritance tax on direct-line transfers. Capital income (dividends, interest) follows the same scale, with no separate treatment from earned income. Dividends paid by an Andorran company subject to local corporate tax are exempt at the individual recipient level (Article 24 of the law). Sources: Govern d'Andorra and OECD Tax Database 2025.

Passive residency (Llei 9/2012 d'immigració, amended by Llei 16/2018, then by Llei 2/2026 in force since February 13, 2026) requires a non-refundable €50,000 payment to the Andorran Financial Authority (AFA), a further €12,000 per dependent, proof of private health insurance covering the principality, a primary home owned or on a long-term lease, and at least 90 days of physical presence per year. On top of that, applicants must justify a €1,000,000 investment in Andorra (real estate, blocked deposit, Andorran investment funds, or equivalent assets), reduced to €400,000 if made through the Housing Fund, within the six months following the grant. The permit is renewed first every two years, then every three, and does not grant access to the local labor market.

Capital gains on holdings below 25% of a company's share capital are fully exempt (Article 5.j of Llei 5/2014). Above that 25% threshold, or on a substantial exit from a long-held stake, gains are taxed at a maximum rate of 10%. Capital gains on a primary residence are exempt provided the proceeds are reinvested within 24 months. Real estate capital gains outside the primary residence fall under a separate tax (ITP plusvàlues immobiliàries), with a tapering rate by holding period: 15% in the first year, sliding to 0% after ten years.

According to the Departament d'Estadística d'Andorra (Q4 2025 CPI), a comfortable FIRE couple spends €2,200 to €3,000 per month, rent included, in Andorra la Vella or Escaldes-Engordany, for a 70 to 90 square metre modern apartment. The more rural parishes (La Massana, Ordino, Canillo) bring that down to €1,800 to €2,400. Encamp and Pas-de-la-Casa stay less in demand but also less well served in winter. The IGI (the Andorran VAT) sits at a very low 4.5%, yet real estate is tight: €5,000 to €7,500 per square metre downtown, up to €9,000 on high-end new builds in Escaldes.

No on both counts. Andorra is an independent micro-state that has never joined the European Union or the Schengen area. EU nationals enter without a visa for tourist stays, but border checks remain in place on the French side (RN20, Pas-de-la-Casa) and on the Spanish side (Sant Julià de Lòria). Negotiations on an association agreement between the European Union, Andorra, and San Marino concluded in December 2023, and the European Commission proposed the agreement to the Council in April 2024: it will bring the principality closer to the single market without full integration, subject to ratification (including a popular referendum in Andorra) that is still pending. Sources: Council of the European Union and Govern d'Andorra.

Andorra has used the euro as its official currency since January 1, 2002. Adoption was initially unilateral (the country had no issuing currency of its own). The monetary agreement between the European Union and Andorra was signed on June 30, 2011 and entered into force on April 1, 2012: it formalized the euro's status as legal tender and authorized the issuance of Andorran euro coins from 2014. Andorra is not a member of the euro area and holds no seat at the ECB, but its monetary policy stays aligned with the Eurosystem. For a FIRE resident from another euro-area country, there is no exchange rate risk, and you get access to the same AD IBANs as anywhere in the SEPA zone.

Andorra has signed double-taxation treaties with many countries to prevent the same income from being taxed twice and to organize the exchange of information. As a rule, for an Andorran tax resident, private pensions are taxed in Andorra under the IRPF brackets (0 / 5 / 10%), while public pensions and rental income from real estate located abroad usually remain taxable in the source country. Foreign-source dividends are typically subject to a withholding tax in the source country, offset by a tax credit in Andorra. Where a treaty between your home country and Andorra is in force, it generally includes an anti-abuse clause and refers to the OECD CRS standard for the automatic exchange of bank information, applied in Andorra since 2018. Check the specific treaty between your home country and Andorra for the exact rates and rules.

The Andorran healthcare system runs on the Caixa Andorrana de Seguretat Social (CASS), the local social security body. Active residents contribute around 22% of their salary (employer and employee combined). Passive residents do not contribute but must hold private insurance covering the principality. CASS reimburses 75% of routine care and 90% of hospital care with contracted providers. For heavy or specialized care unavailable locally, CASS can authorize treatment abroad: a bilateral social security agreement with France (signed December 12, 2000, in force since June 1, 2003) routes such cases to the French hospitals of Toulouse, Perpignan, and Foix, subject to CASS prior authorization. Andorran pharmacies use the European nomenclature.

Acquisition costs average 5.5 to 6.5% of the purchase price for the buyer. Breakdown: Impost sobre Transmissions Patrimonials (ITP) at 4% of the price (combined Govern and municipality), notary fees of 0.5 to 1.5% depending on the amount (rates set by the Col·legi de Notaris d'Andorra), cadastral registration of about 0.1%, and bank fees for the certified check. Non-resident buyers must also obtain a foreign investment authorization (LIE, Llei 10/2012) before signing: about a 30-day lead time and an administrative fee of around €250. The IGI at 4.5% applies only to new builds bought first-hand from the developer.

Andorra is one of the few countries in the world where three public school systems run in parallel, free of charge through high school: the Andorran system (in Catalan), the French system (Lycée Comte de Foix in Andorra la Vella, AEFE-accredited, a full French curriculum from kindergarten through terminale, funded by the French state), and the Spanish system (denominational or public schools, LOMLOE curriculum). These give expat families several internationally recognized options. The Lycée Comte de Foix enrolls more than 2,200 students and is free for French nationals registered on the consular register; other families pay a symbolic contribution of 600 to 1,200 euros a year. For higher education, the Universitat d'Andorra offers a handful of programs, but most students leave for Toulouse, Perpignan, Barcelona, or Madrid.

Andorran corporate tax (IS) sits at a standard rate of 10% (Llei 95/2010, reformed by Llei 17/2017), with a reduced rate of 5% on the first €50,000 of taxable base during the first three financial years for eligible new companies (annual income below about €100,000), the standard 10% applying above that. To set up a public limited company (SA, minimum capital €60,000) or a private limited company (SL, minimum capital €3,000), a prior foreign investment authorization (LIE, Llei 10/2012) is required whenever at least 10% of capital is held by a non-resident, alongside a real seat in country and substantive economic presence (substance test). Average incorporation lead time is 6 to 10 weeks. Dividends distributed by a company subject to Andorran IS are exempt at the resident individual shareholder level.

Andorra has neither an airport nor a railway station: all international transit moves by road. The two nearest airports are Toulouse-Blagnac (180 km, about 3 hours via the N22 then the RN20) and Barcelona-El Prat (200 km, about 3 hours and 30 minutes via the C-16). The closest TGV station is L'Hospitalet-près-l'Andorre, 10 km from Pas-de-la-Casa, with direct shuttles to Andorra la Vella. Inside the principality, the Cooperativa Interurbana Andorrana bus network serves the seven parishes for 2 to 5 euros a trip; the private car remains the dominant option, with fuel 25 to 30% cheaper than in France or Spain thanks to the IGI advantage. Winters call for snow tires or chains from November 1 through April 30 on secondary roads.