Andorra's Omnibus 2 Law: What Changed for Residency, Investment, and Taxes in 2026

On 22 January 2026, the Andorran Parliament approved Law 2/2026 — officially the Llei de continuïtat i consolidació de les mesures per al creixement sostenible (Law on Continuity and Consolidation of Measures for Sustainable Growth). Published in the Official Gazette (BOPA) on 12 February and entering into force on 13 February 2026, this legislation — commonly known as the Omnibus 2 Law — represents the most significant overhaul of Andorra’s residency and foreign investment framework in years.

The Omnibus 2 Law converts the emergency housing and immigration measures introduced by the original 2025 Omnibus Law (Law 5/2025) into a permanent, multi-year regulatory framework. For entrepreneurs, investors, and anyone considering relocation to Andorra, the changes are substantial: higher investment thresholds, doubled property taxes for foreigners, non-refundable government contributions, and stricter substance requirements for active residency.

This guide breaks down every major change and its practical implications.

Why the Omnibus 2 Law Was Passed

Andorra’s housing market has been under extreme pressure. Since 2019, property prices have surged approximately 47%, reaching an average of €4,582 per square metre by early 2024. In prime areas like Les Escaldes, prices climbed over 20% in a single year. Rents followed a similar trajectory, pushing long-term residents out of affordable housing.

The 2025 Omnibus Law introduced emergency measures — foreign investment limits, progressive real estate taxes, tourist rental moratoriums, and vacant property mobilisation powers. However, that legislation was designed as a medium-term response, with several provisions set to expire by the end of 2025.

The Omnibus 2 Law answers the question of what comes next: it converts those temporary fixes into a stable, predictable framework aligned with Andorra’s development vision through 2030. The government’s stated goals are controlled population growth, adequate housing for permanent residents, environmental protection, and a diversified economy less dependent on speculative investment.

Passive Residency: Investment Minimum Rises to €1 Million

The headline change is the increase in the minimum investment required for passive residency (residència sense activitat lucrativa) — Andorra’s equivalent of a “Golden Visa.”

Before (2025)

Requirement	Amount
Minimum investment in Andorran assets	€600,000
AFA deposit (main applicant)	€50,000 (refundable)
AFA deposit (per dependent)	€12,000 (refundable)

After (Omnibus 2 Law, 2026)

Requirement	Amount
Minimum investment in Andorran assets	€1,000,000
Minimum per property (real estate route)	€800,000
Housing Fund contribution (alternative route)	€400,000 (unchanged)
AFA payment (main applicant)	€50,000 (non-refundable)
AFA payment (per dependent)	€12,000 (non-refundable)

The investment can take several forms: real estate, shares in Andorran companies, authorised financial instruments, or Andorran collective investment funds. However, financial instruments and fund investments now carry a 36-month limit — after three years, the capital must be redirected into other eligible asset classes such as real estate or company shares.

The Housing Fund route remains available at €400,000, providing a lower-cost pathway for applicants willing to contribute to Andorra’s social housing development rather than purchasing personal assets.

Passive residents must still demonstrate annual income of at least 300% of Andorra’s minimum wage (approximately €54,912 in 2026 based on a minimum wage of €1,525.33/month), plus an additional 100% per dependent. The 90-day minimum annual stay requirement is unchanged.

The AFA Deposit Becomes Non-Refundable

This is a fundamental change in the financial logic of obtaining residency in Andorra. Under the previous regime, the €50,000 AFA contribution (plus €12,000 per dependent) was a refundable deposit — essentially a bond that you recovered when leaving the country.

Under the Omnibus 2 Law, these payments become final and non-refundable. The only exception is if the initial immigration application is denied — in that case, the funds are returned. But for anyone who obtains residency and later leaves Andorra, the money stays with the state.

This change applies to both passive residents and self-employed active residents. The government has announced exemptions or special regimes for self-employed professionals in the digital economy, innovation, and high-technology sectors, though the details will be developed through subsequent regulation. This is particularly relevant for crypto traders and blockchain businesses operating under Andorra’s Digital Assets Law and cryptocurrency tax framework.

For practical planning purposes, anyone applying for residency in 2026 should treat the AFA payment as a sunk cost rather than a recoverable deposit. For a family of four (two adults, two dependents), the non-refundable payments total €74,000.

Foreign Real Estate Investment Tax: Doubled

The Omnibus 2 Law significantly increases the tax burden on property purchases by foreign investors.

Previous rates (2025)

Transaction	Rate
First property	3%
Second property	5%
Third and subsequent / developers	10%

New rates (Omnibus 2 Law, 2026)

Transaction	Rate
First property	6%
Second and subsequent properties	10%
Developers	10%

The rates for first and second properties have effectively doubled. For a passive resident purchasing an €800,000 apartment (the new minimum), the foreign investment tax alone is now €48,000 — compared to €24,000 under the previous 3% rate.

The law defines “foreign investor” as either a non-resident individual or an Andorran resident who has been effectively resident for fewer than 3 years out of the previous 10. This means recently arrived residents are still treated as foreign investors for real estate tax purposes, with some nuances for periods spent studying in Andorra.

Applications for foreign real estate investment submitted before the law’s entry into force are processed under the previous tax rates — an important transitional provision.

Property Limits for Foreign Buyers

The Omnibus 2 Law maintains the quantitative caps on property ownership by foreign investors:

Property type	Maximum
Land plots	1
Houses	1
Apartments	2
Parking spaces	6

Exceeding these limits is possible but requires committing properties to government-regulated long-term rental schemes for at least 10 years. From 2026, these properties must also meet energy efficiency and environmental standards.

Foreign-led real estate developments must allocate at least 50% of units to controlled long-term rentals for Andorran residents — a requirement that significantly affects the economics of development projects.

Active Residency: Stricter Substance Requirements

For entrepreneurs using the active residency pathway (self-employed, J.1 category), the Omnibus 2 Law introduces tighter controls on genuine economic activity.

The €50,000 AFA contribution for self-employed residents also becomes non-refundable, matching the passive residency change. As noted, exemptions are anticipated for professionals in digital economy, innovation, and high-tech sectors.

More significantly, the law reinforces substance checks at the 2-year and 5-year renewal marks. Immigration authorities and the Ministry of Economy now share data and conduct joint reviews to verify that declared business plans are actually being implemented. The reviews assess real employees, genuine revenue, documented client relationships, and verifiable office presence.

Companies deemed to exist primarily as residency vehicles — without genuine economic substance — face specific sanctions: non-renewal of permits, financial penalties, and mandatory waiting periods before re-application.

For genuine entrepreneurs, the message is clear: structure your Andorran company with real substance from day one. Maintain actual clients, hire local staff where appropriate, establish a physical office, and generate revenue aligned with your declared business model. The days of minimal-activity companies serving mainly as residency tools are over.

Cross-Border Workers: Tighter Controls

The Omnibus 2 Law tightens requirements for cross-border workers (frontaliers) — people who live in France or Spain but work in Andorra. Permit renewals can now be refused if the conditions that originally justified the permit are no longer met.

New recruitment-at-origin procedures are being developed through regulation, and companies contracting services from foreign businesses face enhanced notification requirements. These changes reflect the government’s broader goal of ensuring that Andorra’s labour market serves residents rather than functioning as a commuter employment zone.

Housing Measures: Tourist Rentals, Empty Properties, and Sustainability

The Omnibus 2 Law extends and strengthens several housing protection mechanisms from the 2025 law.

Tourist rental moratorium: The restriction on new tourist accommodation licences continues, protecting the long-term rental supply from further conversion to short-term holiday lets.

Vacant property mobilisation: The government retains powers to bring empty properties back into the rental market. Properties vacant for more than two years already face a special tax of €5.05 per square metre of usable area.

Multi-year housing targets: The law introduces planning targets through 2030 covering housing supply, population ceilings, and infrastructure capacity by parish. Large developments must complete mandatory impact assessments.

Rent controls: Government-controlled rental schemes are extended and indexed to inflation, providing long-term stability for tenants in regulated housing.

These measures reflect the government’s explicit target of recovering approximately 1,500 housing units for the long-term rental market over a three-year period.

What Didn’t Change: Andorra’s Core Tax Advantages

It’s important to recognise what the Omnibus 2 Law does not affect. Andorra’s fundamental tax structure remains unchanged — the same structure that makes it attractive in our Andorra vs Spain full tax comparison:

Tax	Rate
Maximum income tax (IRPF)	10% (first €24,000 exempt)
Corporate tax (IS)	10% (5% if profits ≤ €50,000)
Dividends from Andorran companies	0%
Capital gains (shares held >10 years or ≤25% ownership)	0%
VAT (IGI)	4.5%
Wealth tax	None
Inheritance/gift tax	None

The Omnibus 2 Law is about residency access and real estate investment — not about changing the tax rates that make Andorra attractive in the first place. Once you are resident, the tax treatment of your income, dividends, and capital gains is exactly the same as before.

Transitional Provisions

The law includes important grandfather clauses. Applications for passive or active residency submitted before 13 February 2026 (the law’s entry date) continue to be processed under the previous requirements. Similarly, foreign real estate investment applications filed before this date are subject to the old tax rates.

For self-employed residents, those who can demonstrate a prior agreement within six months of the law’s entry may also qualify for transitional treatment.

These provisions mean that investors who acted quickly after the law was announced but before publication have some protection. For everyone else, the new rules apply in full.

Practical Impact: What This Means for Different Profiles

Passive investors and retirees

The cost of entry has increased substantially. Between the higher investment threshold (€1 million), the non-refundable AFA payment (€50,000+), and the doubled property tax (6% on first property), a passive resident purchasing real estate in 2026 commits approximately €1.1 million before any cost-of-living expenses. This represents a roughly 67% increase over the 2025 requirements.

The Housing Fund route at €400,000 remains the most cost-effective pathway, though it doesn’t provide a personal property. Applicants choosing this route still need the non-refundable AFA payment and must demonstrate sufficient income.

Entrepreneurs (active residency)

For genuine entrepreneurs, the practical impact is more contained. The key change is the non-refundable AFA payment — a €50,000 cost rather than a temporary deposit. Otherwise, the active residency pathway remains accessible to those who establish real businesses with genuine substance. Our guide for freelancers and digital nomads walks through the full setup process under these new rules.

The increased scrutiny at renewal points means that business planning must be more rigorous from the start. Entrepreneurs should maintain clear documentation of revenue, client relationships, employee records, and office presence throughout their residency.

Real estate investors

Foreign property buyers face both higher entry costs (6-10% investment tax) and stricter operational requirements (50% allocation to long-term rentals for developments, energy efficiency standards). Property investment in Andorra remains viable but requires more careful financial modelling than before.

Andorra in Context: Still Competitive?

With higher barriers to entry, the natural question is whether Andorra remains competitive compared to alternatives like Portugal, Spain, Dubai, or the UK.

The answer is clearly yes — but for a more select group. At 10% maximum income tax, 0% dividend tax, 0% capital gains on long-held shares, 4.5% VAT, and no wealth or inheritance tax, Andorra’s ongoing tax advantages far outweigh the higher entry costs. An entrepreneur saving €30,000-50,000 per year in taxes compared to Spain or France recovers the increased investment threshold within a few years.

The Omnibus 2 Law reflects Andorra’s deliberate shift from volume to quality. The government wants fewer but wealthier and more committed residents who contribute to the local economy rather than treating the country as a convenient flag. For entrepreneurs who genuinely plan to live and work in Andorra, the fundamentals remain outstanding. Context: record millionaire migration in 2025 — 142,000 globally — shows that mobile wealth is actively seeking exactly what Andorra offers.

Conclusion

The Omnibus 2 Law marks Andorra’s transition from a reactive crisis response to a deliberate long-term strategy. The rules are stricter, the costs are higher, and the substance requirements are real. But the underlying proposition — one of the most favourable tax environments in Europe, combined with safety, quality of life, and geographic convenience — hasn’t changed.

For entrepreneurs and investors who qualify, Andorra in 2026 offers the same core tax advantages it always has. The difference is that accessing those advantages now requires a bigger commitment upfront. Given the magnitude of the ongoing tax savings, that commitment still pays for itself remarkably quickly.

Calculate your personal tax savings: Use our free tax calculator to see exactly how much you’d save by relocating to Andorra, based on your specific income and business structure.

Sources

Advantia Assessors — “Omnibus 2 Law: changes residence and investment in Andorra”.
Augé Legal & Fiscal — “Omnibus Law 2 Andorra: Changes in Residency and Investment”.
FintaxAndorra — “Andorra Sustainable Growth Law 2026: Continuity and Consolidation of Measures”.
Immigrant Invest — “Andorra Investor Residency New Rules: €1M Minimum, Higher Property Tax”.
Nordic Star Law Offices — “Reform of Andorra’s investment residence permit (2026)”.
AndorraInc — “Andorra Passive Residency (By Investment) Requirements in 2026”.
Cases & Lacambra — “Legal Flash: Andorran Reform Law — Key changes to immigration, foreign investment and Real Estate Tax”.
Bloomberg Tax — “Andorra Gazettes Law on 2026 Budget”.

Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Regulatory situations are individual and subject to change. Always consult a qualified legal professional before making residency or investment decisions.