In addition to its appeal as a location for investors seeking to establish businesses, Andorra is a tranquil and advantageous place in which to retire. Retirement in Andorra has several advantages, including favourable economic conditions and a high quality of life. One of the most appealing aspects of Andorra is its reputation for being a safe country. Andorra is also an ideal natural environment located in the Pyrenees. This is an ideal place for those who value direct contact with nature and an active and healthy lifestyle.
The following section outlines the requirements for relocating to Andorra, and the specific advantages that enable one to enjoy retirement there.
Table of contents:
- Retirement in Andorra – requirements
Taxes in Andorra
The advantages of retiring in Andorra
A good geographical location
Where to live in Andorra
Health care
Activities and entertainment in Andorra
We guide you through the whole process
Retirement in Andorra – requirements
In order to retire in Andorra, it is necessary to apply for a passive residence permit, as there is no specific retirement visa, unlike in other countries. A passive residence permit is a type of permit granted to individuals who do not engage in any professional activities within the country. This permit is particularly suited to retired people who rely on passive sources of income.
The conditions for applying for passive residence are as follows:
• A minimum investment of €600,000 is required in the country. Such investments may be made in the form of shares in companies operating within the country, in debt or financial instruments issued by local entities, in life assurance products contracted with entities in Andorra, or in non-interest-bearing deposits with the Andorran Financial Authority. The aforementioned sum may be reduced to €400,000 if the investment is made, directly or indirectly and permanently and effectively, in the Housing Fund, in accordance with the applicable regulations.
• It is necessary to demonstrate an annual income that exceeds 300% of the current annual minimum wage. The value of this indicator must be multiplied by 100 for each dependant.
• A non-interest-bearing deposit with the Andorran Financial Authority (AFA) is required, the initial amount being currently €47,500. This has to be increased by €9,500 for each dependant. The aforementioned deposit will be included in the minimum investment amount required.
• A minimum stay of 90 days per year in the country is required.
These requirements are in accordance with the new 2023 regulations.
Taxes in Andorra
The taxation system is significantly advantageous for those seeking to optimise their savings and enjoy a comfortable retirement. Taxes in this jurisdiction are considerably lower than those in most European countries. The personal income tax (IRPF) has a competitive rate of 10% in most cases, while the general indirect tax (IGI), the equivalent of value added tax (VAT) in other countries, is the lowest in Europe at 4.5%. Furthermore, Andorra does not impose inheritance tax.
These characteristics of taxation permit retired people to retain a greater proportion of their savings, thereby facilitating a more relaxed and carefree lifestyle. Andorra represents an ideal location for those seeking to maximize their wealth in retirement. By selecting Andorra, one not only selects a tranquil and secure environment in which to enjoy this new stage of life, but also a location where one’s financial resources will perform more effectively, allowing one to enjoy one’s retirement to the full.
The advantages of retiring in Andorra
Andorra offers a secure environment, high quality of life, and attractive fiscal advantages, making it an appealing option for retirement. As previously stated, provided that one fulfils all the established requirements it is possible to establish one’s retirement in Andorra through passive residence, which allows one to reside there without having to work.
The country has a low crime rate, which reinforces its position as a safe place in which to enjoy a peaceful retirement. Furthermore, the country offers a plethora of activities and a comfortable and convenient lifestyle for its residents.
A good geographical location
The Principality’s strategic location between Spain and France provides residents with convenient access to their respective countries of origin. It is situated in close proximity to major urban centres such as Barcelona and Toulouse, which are located just over 200 km away. In terms of linguistic diversity, in addition to Catalan, which is the official language, Spanish and French are commonly spoken, which facilitates communication. Another significant advantage is the area’s excellent connections, with convenient buses and flights from Andorra-La Seu airport, which has a direct route to Madrid. This enables residents to maintain regular contact with their loved ones and to use the airports of Barcelona and Toulouse.
Where to live in Andorra
One of the most crucial considerations is the matter of housing. It is important to note that the cost of renting or purchasing property in Andorra is often comparable to that of major urban centres. A variety of options will be available to suit different budgets. They include flats, penthouses, duplexes, and studios situated in the centre of Andorra or in the so-called high parishes, which offer a more rural setting. An alternative option is to purchase a detached house or villa in a more tranquil location, where one can enjoy greater privacy and more space to accommodate family members when they visit.
The cost of living in Andorra is comparable to that of major urban centres such as Barcelona or Toulouse, but higher than in smaller cities. It is of significant importance to ascertain the cost of living in your chosen place of residence prior to retirement, in order to consider the potential sources of retirement income and determine their sufficiency to support you.
Health care
The Andorran health system is regarded as one of the most effective in the world.
Nevertheless, although a pensioner, you will not be provided with free healthcare. Instead, it is necessary to take out private health insurance to cover any medical expenses.
Activities and entertainment in Andorra
Andorra is renowned for its natural beauty and mountainous terrain. In winter, skiing and a variety of other winter sports represent the jewel in the crown for the more active residents. In summer, mountain-related activities are also available, including hiking routes of varying difficulty. There are also many restaurants, wellbeing centres and spas. One can also explore the country’s rich cultural and historical heritage through a variety of museums and monuments, and one can attend a range of events.
We guide you through the whole process
Are you contemplating retirement in Andorra? We will accompany you in the process of obtaining passive residence and assist you in completing the various administrative procedures. We will be at your side from the outset and will accompany you throughout the process until you have completed all the necessary formalities.
Residing in Andorra during retirement presents an opportunity to benefit from the Principality’s advantages, not only fiscally, but also in terms of quality of life.
If you are thinking of relocating to Andorra, we would be delighted to hear from you.