Guide to Relocating and Retiring in Andorra

Andorra, a small yet stunning country nestled between France and Spain, has become an increasingly popular destination for expatriates and retirees. Known for its low taxes, high quality of life, and breathtaking natural beauty, Andorra offers a peaceful environment with plenty of opportunities for outdoor activities like skiing, hiking, and mountain biking. If you are considering retiring in Andorra, this guide will walk you through the process, including residency options, financial requirements, and tax obligations.

Why Retire in Andorra?

Low Taxes: Andorra offers one of the lowest personal income tax rates in Europe, with a maximum rate of 10%. There is no wealth tax or inheritance tax, making it a great option for those looking to preserve their assets.
Natural Beauty: Andorra is famous for its mountain landscapes, ski resorts, and outdoor activities, providing a peaceful and healthy environment.
High Standard of Living: With excellent healthcare, education, and infrastructure, Andorra offers a high quality of life for retirees.
Safety and Low Crime Rate: Andorra is known for being one of the safest countries in Europe, making it a prime location for those looking for a secure place to retire.

Residency Options for Retirees

Passive Residency (For Retirees with Sufficient Financial Means):
- Eligibility: designed for individuals who do not intend to work in Andorra but have sufficient income from sources like pensions, investments, or savings.
- Requirements:
  - Sufficient financial resources to support yourself without working.
  - Evidence of stable income sources (e.g., pensions or savings).
  - Deposit a minimum of €600,000 into an Andorran bank account (real estate, bonds, or other investments).
  - Spend at least 90 days per year in Andorra to maintain residency.
Active Residency (For Those Who Plan to Work or Start a Business):
- Eligibility: for individuals planning to engage in economic activities, such as working or running a business in Andorra.
- Requirements:
  - Demonstrate ability to support yourself through employment or business activities as well as to deposit €50,000 to the Andorran Financial Authorities.
  - Register with the Andorran Social Security system (CASS).

Financial and Tax Requirements for Retirees

Andorra offers tax incentives that are particularly advantageous for retirees. Here’s a breakdown of the key taxes and requirements:

Tax Type	Rate	Details
Personal Income Tax	0% – 10%	A progressive rate with a maximum of 10%. Very low compared to most EU countries.
Wealth Tax	None	Andorra does not levy any wealth tax, making it ideal for retirees looking to protect their assets.
Inheritance Tax	None	No inheritance tax in Andorra, offering a significant benefit for wealth transfer.
Capital Gains Tax	10%	Applies to sales of shares and certain investments.
Real Estate Gains	15% (1st year)	Decreases progressively until 0% after 10 years.
Social Security	9.5% (on income)	Applies only to active residents under the social security system.

Key Financial Requirements for Retiring in Andorra

Minimum annual income: you need to show proof of €40,000 to €50,000 per year (or equivalent in assets).
Health Insurance: proof of health insurance coverage (either through the Andorran CASS system or a private provider).
Bank Deposit: a deposit of at least €600,000 is required for passive residency.

Upcoming Legislative Changes (Effective March 2025)

Capital Gains Tax Adjustments: real estate gains tax remains at 15% if sold within the first year, decreasing annually until 0% after 10 years.
Residency Transparency Requirements: passive residency applicants must provide more detailed financial disclosures.
Property Tax Updates: new regulations may introduce minor adjustments to property taxes for foreign investors.

How Axior Global Can Help You with Tax Advisement and Registration

Tax Optimization: helping you take full advantage of Andorra’s low tax rates and tax incentives.
Residency Application: assistance with the residency application process, ensuring all required documentation is submitted correctly.
Financial Planning: guidance in preparing financial documents (proof of income, investments, health insurance, etc.) and structuring your finances for retirement.
Cross-Border Taxation: expertise in navigating international tax regulations and ensuring compliance with double taxation treaties.

Conclusion

Retiring in Andorra offers a unique combination of low taxes, high quality of life, and financial benefits. With its stunning landscapes, peaceful atmosphere, and favorable tax regime, it is no wonder that so many retirees are choosing Andorra as their new home. Axior Global is here to make your transition to Andorra as smooth as possible, from helping with residency applications to providing ongoing tax advisement. Let their expert team guide you through the process, ensuring you enjoy a seamless and prosperous retirement in one of the most attractive countries in Europe.

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