Andorra and the European Union:
the association agreement is signed — what really changes.

Eleven years of negotiations, a signature in Brussels, and plenty of shortcuts in the headlines: “Andorra joins Europe”, “the end of the tax haven”, “Europeans free to settle”. None of them is accurate. The association agreement signed on 19 October 2026 is a treaty of economic integration, not accession; it is not yet in force, and it leaves outside its scope two subjects that matter to our readers: taxation and control of immigration. Here is what the text says, based on the official documents of the Govern d’Andorra and the European institutions.

What was signed on 19 October 2026

The agreement was signed on Monday 19 October 2026 in Brussels by Xavier Espot, head of the Govern d’Andorra, Luca Beccari, San Marino’s minister of foreign affairs — the same agreement associates both states — and the European Commissioner Maroš Šefčovič. On the same day, Andorra signed an amendment to the 2011 monetary agreement, which allows it to use the euro as its official currency: part of its content will be taken over by the association agreement if the latter enters into force (Govern press release, European Commission).

It has been a long road: a negotiating mandate adopted by the Council of the EU in December 2014, talks opened in 2015 with Andorra, San Marino and Monaco (Monaco’s negotiations were suspended in 2023), negotiations concluded on 7 December 2023, Commission proposals in April 2024, then the Council’s green light for signature on 16 July 2026.

In substance, the agreement brings Andorra into the internal market — free movement of goods, services, capital and persons — in exchange for taking on a large part of EU law, including its future developments, with negotiated derogations. The Court of Justice of the European Union is the final arbiter of its interpretation. On the other hand, Andorra becomes neither a member of the EU, nor a party to the European Economic Area, nor a member of the Schengen area: its citizens do not vote in European elections and it does not contribute to the Union’s budget.

The timetable: signed, but not yet applicable

The Govern puts it unambiguously: the signature “does not activate the agreement”. It closes the negotiation and opens the ratification phase, which involves several hurdles, in this order:

The referendum is consultative, but the Govern has undertaken to treat it as politically binding. Only Andorrans entitled to vote take part: foreign residents do not vote. If the answer is “no”, the text will not be put to the Consell General and Andorra will remain a third country, linked to the EU by its current agreements — the 1990 customs union, the monetary agreement, tax cooperation. The outcome is not a foregone conclusion: in spring 2026, the barometer of the public institute Andorra Recerca i Innovació put the “no” vote at about 46 % against 33.5 % for “yes”, with a large share of undecided voters.

Settling in Andorra: the quotas stay

This is the most widespread misconception. Within the Union, free movement allows a European to settle in another member state without any quota. The agreement with Andorra is asymmetric: Andorrans will be able to live, work, study or retire in the EU just as Europeans do, but Andorra keeps control over who settles on its soil, with three quotas for EU nationals: economically active persons, passive residents and seasonal workers (contracts of under twelve months).

This new regime will only start two years after the entry into force of the agreement and will be reviewed every ten years, by mutual agreement. The Govern insists that it will not open “the doors without limit” and illustrates the point with a figure: had the agreement applied in 2023, the planned calculation would have produced 354 authorisations for EU nationals, whereas 2,033 were issued that year. Andorra will be able to adapt these quotas to its needs and its capacity for growth. The other rules change as follows, according to the official FAQ on the agreement:

In practice, nothing changes for a plan to settle in 2026 or 2027: the current conditions apply. For passive residence, that means €1M invested in Andorran assets (or €400,000 in the Housing Fund), €50,000 paid to the AFA and a place in that year’s quota (200 authorisations without gainful activity in 2026, 163 of them passive); for an activity, a residence and work authorisation, as an employee or self-employed, within the quotas in force. See our passive residence and active residence pages.

Taxes: taxation stays outside the agreement

The official answer fits in a single sentence: “taxation is not part of the content of the association agreement”. Andorra retains its fiscal sovereignty: a change in rates would be a matter for an Andorran decision, not a European obligation — and the draft 2027 budget, presented on 17 September 2026, provides for no rate increases. Corporate tax stays at 10 %, IRPF capped at 10 % and IGI at 4.5 %, with no wealth tax and no inheritance tax: the details are in our guide to Andorran taxation.

The agreement does, however, contain two tax commitments worth knowing about:

• the parties recognise the principles of good tax governance — transparency, exchange of information, minimum standards against base erosion and profit shifting (BEPS) — and undertake to apply them;
• they undertake to supplement, within four years of entry into force, the protocol specific to Andorra so as to include mutual assistance in the recovery of all tax claims.

This second point is of direct interest to French people leaving with unrealised capital gains. Today, in the absence of recovery assistance between France and Andorra, the deferral of payment of the exit tax is not automatic for a move to Andorra: it has to be requested, with guarantees. If this protocol comes about, the question may arise again — not before the agreement enters into force, and subject to how the French authorities read it. The 2013 France–Andorra tax treaty, for its part, is not amended.

Borders, customs and tobacco: what stays the same

The agreement “eliminates neither physical borders nor tax borders”, the Govern points out. Checks on persons at the border remain, as do customs declarations and tax free refunds for shoppers, since Andorra keeps its own tax system. The travellers’ allowances — currently €900 of shopping, 300 cigarettes and 5 litres of wine per adult entering France — are maintained by the agreement.

The customs union, limited to industrial products since 1990, will be extended to agricultural products. Tobacco has a regime of its own, spread over thirty years:

• status quo for seven years, then gradual removal, up to the thirtieth year, of Andorran customs duties on tobacco from the EU;
• Andorra undertakes not to widen the price gap with the neighbouring state where tobacco is cheapest (currently Spain) and to step up the fight against smuggling; the EU may take safeguard measures if the gap grows;
• Andorran manufacturers will no longer be able to produce flavoured cigarettes, menthol ones for example.

Non-European residents: a separate agreement on borders

French nationals and other Europeans are not affected by the European Entry/Exit System (EES), which is reserved for third-country nationals. For non-European Andorran residents — British, American, Latin American… — a separate border management agreement was initialled on 25 March 2026; on 7 September 2026, the Commission proposed signing it and applying it provisionally. Once applied, it would exempt Andorra’s legal residents from the EES and from the ETIAS travel authorisation, allow them to travel visa-free in the Schengen area for 90 days in any 180, and stop counting their days spent in Andorra towards that ceiling. In return, residence permits issued or renewed would, with some exceptions, be subject to a security check by France or Spain, and the right of residence would rest on a real and regular physical presence: an investment or a predetermined payment would not be enough to establish it. A decisive point for non-European passive residents.

Companies, banks, professions: the transition periods

For sensitive sectors, the agreement provides for adjustment periods, counted from its entry into force. Activities that do not yet exist in Andorra will only have to apply the corresponding EU rules once they appear.

For companies, the agreement does not upend company formation: foreign businesses have been able to set up in Andorra since the economic opening of 2012, and the Govern expects no notable effect on the number of new establishments — our company formation page describes the current framework. Two developments are worth noting: Andorran registers will be connected to the European business registers interconnection system, with each company receiving a European unique identifier (EUID) — see our guide to the companies registry — and Andorran businesses will be able to compete for European public contracts, just as European businesses will for Andorran ones.

On the wealth side, the free movement of capital will allow Andorrans to open accounts or buy property in the EU on the same terms as Europeans. In the other direction, Andorra and the EU have agreed that Andorra may restrict, on the Maltese model, the purchase of second homes by non-residents, once its foreign investment law has been amended. One to watch for anyone planning a property purchase, which already bears the foreign real estate investment tax (6 % to 10 %).

What this changes for your plans today

• You are preparing a move: work from the rules in force — Law 2/2026, the 2026 quotas, the quota of 900 authorisations until 30 April 2027. The agreement will not change them for several years, and will not abolish the quotas.
• You are counting on Andorran taxation: it remains outside the scope of the agreement. The real issue is still how well your tax residence stands up to the French tax authorities.
• You are leaving with unrealised capital gains: the exit tax is handled under current law — deferral on request, within the 90 days before departure.
• You run an Andorran company: keep an eye on the sectors covered by the transition periods (services, finance, telecoms) and, starting now, on your reporting obligations: Law 17/2026 already allows inactive companies to be dissolved by operation of law.
• You are a non-European resident: if the border agreement applies, your residence permit will depend on your physical presence in Andorra. Start documenting it now.

We are following every step — the European Parliament vote, the referendum date, the implementing texts — and will update this guide at each one. The rest of the year’s changes are gathered in our guide to the 2026 reforms.