Andorra has officially approved a significant overhaul of its passive residency program, marking a decisive shift toward higher investment thresholds and stricter entry criteria. The reform was adopted by Parliament on January 22 and fundamentally changes how investors qualify for residency in the Principality.

Once the law is published in Andorra’s Official Gazette, it will enter into force the following day. While the publication date has not yet been confirmed, the new framework is expected to impact applicants immediately after implementation.

From Accessible to Exclusive: A Strategic Policy Shift

The newly approved legislation increases the minimum investment requirement from €600,000 to €1 million, signaling Andorra’s intention to reposition itself as a more selective residency jurisdiction.

According to Marc Cantavella Soler, co-founder of Relocate Save and a specialist in Andorran taxation, this reform represents more than a technical update. He describes it as a deliberate move driven by sustainability objectives and the government’s desire to regulate population growth more carefully.

Rather than serving as a broadly accessible low-tax alternative, Andorra is now aligning its residency program with a high-net-worth profile.

Parliamentary Process and Amendments

Before final approval, the bill underwent detailed review between January 9 and January 19, during which 43 amendments were examined. The Economics Commission unanimously approved nine amendments, adopted 12 by majority vote, and rejected 14. The revised text was then submitted to Parliament, where it received final approval.

Refundable Deposits Replaced by Non-Refundable State Fees

One of the most notable changes concerns the elimination of refundable deposits.

Under the previous rules, applicants were required to place a €48,500 deposit, plus €10,000 per dependent, with the Andorran Financial Authority (AFA). These amounts were fully refundable if residency was relinquished or citizenship was later obtained.

The new system replaces this structure with permanent state contributions:

• €50,000 for the main applicant

• €12,000 for each dependent

These payments are non-refundable, except in cases where the initial immigration authorization is rejected. Once residency approval is granted, the AFA transfers the funds to the Ministry of Finance, where they remain permanently for the benefit of the state.

€1 Million Investment Requirement: Eligible Asset Types

Applicants must now demonstrate a minimum €1 million investment, made permanently and effectively in Andorran assets. Acceptable investment options include:

• Non-interest-bearing deposits with the AFA

• Residential or commercial real estate

• Equity participation in Andorran companies

• Bonds or financial instruments issued by Andorran entities

• Collective investment funds governed by Andorran law

• Government bonds

• Life insurance products issued by Andorran institutions

For investments made through collective investment funds, the law limits the holding period to a maximum of 36 months. After this period, investors must reallocate their capital into other qualifying Andorran assets and provide proof of compliance under future regulatory guidelines.

If real estate is selected, the legislation requires that each property acquisition exceed €800,000, preventing fragmentation of the investment across multiple lower-value units.

Housing Fund Option: Reduced €400,000 Threshold

As an alternative to the €1 million requirement, the law introduces a €400,000 investment option through Andorra’s Housing Fund.

To qualify, the investment must be made directly or indirectly and maintained on a permanent and effective basis. While the law does not detail operational mechanics, the fund appears to support affordable and social housing initiatives and is governed by separate regulatory provisions.

Investment Deadline

Applicants are granted six months from the date they register their immigration authorization request to complete and formalize the required investment.

What This Means for Applicants

This reform significantly raises the financial and strategic threshold for Andorran passive residency. While the program remains attractive for ultra-high-net-worth individuals seeking stability, low taxation, and European residency, it is no longer positioned as an entry-level solution.

For prospective applicants, early planning, asset structuring, and professional guidance are now more important than ever.