Andorra's 2026 Reforms:
what Law 2/2026 changes.

Adopted on 22 January 2026 and in force since 13 February, Law 2/2026 — known as “Omnibus 2” — adjusts several parameters of Andorra’s appeal. Nothing dramatic: the tax advantage remains intact. Entry thresholds are rising, however, and it is better to know them before taking the plunge.

Passive residence: the entry investment raised to €1M

This is the most visible change. The minimum investment for passive residence rises to €1,000,000 in Andorran assets (compared with €600,000 previously), with one alternative route: €400,000 in the Housing Fund. If the investment is made in real estate, each property acquired must exceed €800,000 — this is not a reduced tier: the total required remains one million. On top of this comes the €50,000 contribution to the AFA (plus €12,000 per dependant): since Law 2/2026, it is no longer a recoverable deposit but a non-refundable contribution, returned only if the initial authorisation is refused. The required income remains at least 300% of the Andorran minimum wage.

Another parameter worth knowing: under the quota regulation published in the BOPA on 13 March 2026, the number of residence-without-work authorisations that may be granted in 2026 is set at 200, all categories combined. One more reason to submit a complete application early in the year.

Real estate: a foreign investment tax

For non-residents — and for residents who have lived in Andorra for less than three of the last ten years — property purchases carry the foreign real estate investment tax, created in 2024 (Law 3/2024) and raised by Law 2/2026 to 6% on a first property, 10% beyond that. Purchases are also capped: one single-family house, or a maximum of two apartments (with three parking spaces and three storage rooms per dwelling), acquisitions by related parties — spouse, close relatives, controlled companies — being added together. This is a parameter to build into your financing plan from the outset — something we do systematically when we help clients invest in real estate.

Companies: corporate tax stays at 10%

On the business side, the corporate tax rate remains at 10%, and the floor introduced by Law 5/2023 continues to apply: the tax due cannot fall below 30% of the theoretical tax, i.e. around 3% of the taxable base. Andorra remains one of the lightest business tax regimes in Europe; setting up a company there keeps all its appeal.

Catalan: what changes for permits

The renewal of residence and work authorisations includes a language requirement, stemming from Law 6/2024 on the Catalan language: level A1 Catalan at the first renewal, then A2 at the second, attested by an official diploma (Decree 388/2026, art. 7). The transitional period, during which a training course of at least 30 hours was sufficient, ended on 26 April 2026. Extension of this requirement to the other permit categories is announced for around 2029.

Our advice: fit a few hours of Catalan into your schedule as soon as you settle in. It is a modest investment, a real asset for integration in everyday life — and a permit renewal that can be prepared calmly, well in advance.

Before / after 2026 at a glance

To take in the changes at a single glance, here are the main parameters before and after Law 2/2026 came into force.

Since summer 2026: what has changed (update of 21 October)

Law 2/2026 has not stood alone. Several texts and announcements over the summer and since the return in September complete the framework — each with a practical consequence for residents and companies.

• European Union: the association agreement signed on 19 October. Signed in Brussels, it is not yet in force: it must be approved by the European Parliament, put to a referendum in Andorra after the general election in spring 2027, then ratified. It maintains immigration quotas for EU nationals and leaves taxation outside its scope — see our analysis of the Andorra–EU agreement.
• Inactive companies: dissolution by operation of law (Law 17/2026 of 14 July). A company is presumed inactive when it has failed, for at least two consecutive financial years, to meet two or more of its obligations: filing its annual accounts, its tax returns, its declaration of beneficial owners. On 15 September 2026, the Govern launched the administrative dissolution procedure, without liquidation, for 2,777 companies; a period of ten working days was opened after the list was published in the BOPA for submitting observations. A “dormant” company must therefore keep meeting its reporting obligations — see the guide to the companies registry and our accounting follow-up.
• Work permits: a quota of 900 authorisations until 30 April 2027. Approved on 7 October, it comprises 702 residence-and-work authorisations and 198 cross-border work authorisations, net of the permits already granted under the June extension (Decree 231/2026, repealed, as was Decree 159/2026). French, Spanish and Portuguese nationals do not have to prove prior experience in the sector; Catalan is required progressively at renewals (level A1 at the first, A2 at the second).
• 2027 budget: no rate increases for residents. Presented on 17 September, the draft provides for more than €834 million of spending and a deficit of €43 million, with no increase in the tax rates applied to the resident population. The Govern is aiming for adoption in early December, for entry into force on 1 January 2027.
• Housing: the 2027–2030 lease regime is set. Law 11/2026 of 4 June defines the legal regime for rental contracts for habitual and permanent residence for the 2027–2030 period; we detail its effects in our guide to finding a home in Andorra.
• On the French side: the apport-cession regime and the exit tax under discussion in Parliament. Article 5 of the finance bill for 2027, tabled on 1 October, ends the deferral of tax on capital gains from contributions of securities (article 150-0 B ter of the French tax code) when the securities are passed on, with mirror-image effects on the exit tax deferral of taxpayers who have moved abroad (article 167 bis). On 16 October, the National Assembly adopted it at first reading in an amended version: inheritances excluded, gifts taxed only if the contributed securities have been sold or redeemed within eight years of the contribution, payment that can be spread over ten years, for transfers made since 1 October 2026, earlier contributions included. Nothing is final: the vote on the first part of the budget is scheduled for 3 November, before the Senate examines the bill. The text is still under discussion: check it before any gift of securities — see our exit tax guide.

In practice, what should you do in 2026?

The right approach is not to wait but to plan ahead: calibrate your relocation budget to the new thresholds, secure the timetable of your application and choose the most suitable residence route — active or passive. This is precisely what we set out with you, figures in hand.

Should you be concerned? No — you should plan ahead

These adjustments are designed to manage growth, not to close the door. On a European scale, Andorra remains unbeatable: no wealth tax, no inheritance tax, IRPF capped at 10% and IGI at 4.5%. See the full overview of our tax advantages.

The real challenge is not to give up: it is to calibrate your project to the current framework. That is exactly our role — turning a reform into a strategy, and a threshold into an action plan.