NEWS:The Debate on Passive Residency in Andorra: A Decision with Multiple Consequences

In recent weeks, the omnibus law passed by the Consell General has sparked intense debate in Andorra, attracting new detractors among sectors that had traditionally collaborated with the government on economic and financial matters.

The latest episode to stir discontent has been the sudden and unannounced removal of the option for passive residents to fulfill the mandatory €600,000 investment requirement through financial instruments issued by Andorran banking institutions—in other words, through the banks.

This change, which went unnoticed until the law’s official approval, came as a major surprise to the country’s financial system. Industry representatives believe that the usual dialogue and cooperation with authorities has been broken. Beyond the substance, it is the manner in which this was handled that has caused the most concern. Banks have been excluded from a major economic stream generating hundreds of millions of euros—resources that also helped stimulate domestic credit and business activity.

The new legislation leaves other forms of investment untouched, such as life insurance products or deposits made at the Andorran Financial Authority, which paradoxically grants prominence to a regulatory body while excluding those it is supposed to oversee—the banks. This situation has been described as contradictory and even unfair, especially considering the historical role of the financial sector in Andorra’s economic development.

Currently, there are 3,656 valid passive residency permits, and in the last two years alone, 734 new permits have been granted, resulting in an inflow of over €440 million. Although the figures vary, the total capital generated through this investor residency model is estimated to be around €2 billion. A significant portion of this sum was managed by banks, helping drive domestic activity, enabling loan issuance, and supporting internal financial service structures.

Faced with this new scenario, a shift in residency attraction strategy seems imminent. Alternatives like setting up a company to obtain residency as a self-employed individual are gaining popularity. Real estate investment remains another route, and despite new restrictions, it appears to benefit indirectly from this legislative change. 

The Omnibus Law will be published in the BOPA once it is signed by the co-princes, which is expected to happen before March 28. Its entry into force is scheduled for April 18, 2025.

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The Plus Serveis i Família Team