Retiring in Andorra: Pensions, Healthcare and the Passive Residency Route

Retiring in Andorra means taking passive residency: a €1,000,000 investment in Andorran assets (or €400,000 through the Housing Fund), a non-refundable €50,000 payment to the Andorran Financial Authority, proof of income above about €56,500 a year, private health insurance, and 90 days a year in the country. Pension income is taxed at up to 10% locally — but how it is taxed depends on your home country’s treaty with Andorra.

The route: passive residency

Retirees do not work, so passive residency (residència sense activitat lucrativa) is the natural fit. The requirements, post-2026 Omnibus Law:

• Investment: at least €1,000,000 in Andorran assets — real estate, Andorran company shares, public debt, investment funds, or a non-interest-bearing deposit with the AFA. Reduced to €400,000 if channelled through the national Housing Fund.
• AFA contribution: a non-refundable €50,000, plus €12,000 for a dependent spouse.
• Income: proof of annual income above 300% of the Andorran minimum wage — roughly €56,500 for the main applicant (mid-2026 figure, it moves with the minimum wage), plus 100% more per dependent. A pension statement is standard evidence.
• Health cover: private insurance for you and your spouse in Andorra — roughly €100–200 a month per adult. Passive residents are not in the CASS system.
• Presence: at least 90 days a year in Andorra.

How your pension is taxed

This is the part that varies. Andorra would tax your worldwide income, including pension income, at up to 10% once you are Andorran tax resident. But the double-tax treaty with your former country usually decides who taxes the pension:

• Government / civil-service pensions are typically taxable only in the country that paid them.
• Private and occupational pensions are often taxable in the residence state (Andorra) — but not always. The Netherlands, for example, keeps taxing tax-facilitated Dutch pensions at source under its 2025 treaty with Andorra.
• State pensions depend on the treaty and can go either way.

So “retire to Andorra and pay 10% on my pension” is true for some retirees and not others. Check your specific treaty before assuming the saving.

The genuine advantages for retirees

• 0% inheritance and gift tax — often the biggest number for someone planning to pass on an estate.
• 0% wealth tax and generally 0% capital gains — helpful if you are living off a portfolio.
• Safety and healthcare — Andorra is among Europe’s safest countries, with good medical care and cross-border access to Spain and France.
• Cost of living near Barcelona levels, well below Monaco or Switzerland.

The trade-offs

• The €1,000,000 is a real capital commitment, even though you keep it.
• No airport and winding mountain roads — visiting family means a 2–3 hour drive to Barcelona or Toulouse.
• Private health insurance gets more expensive with age; factor that in.
• The Catalan requirement reaches passive residents last: work permits from 26 April 2026, the remaining categories within five years.

Frequently asked questions