Andorra la Vella: what to see and whether to move there

What the city lives on and who it suits

Andorra la Vella is the capital of a small Pyrenean principality between Spain and France, with about 23,000 people; together with neighbouring Escaldes-Engordany it forms a single town. The whole country has fewer than 90,000 people. The economy rests on tourism, ski resorts, low-tax retail, banking and, increasingly, entrepreneurs and digital professionals who move for the low income tax.

Andorra suits entrepreneurs and remote specialists with high incomes, wealthy people who value safety and tax predictability, and lovers of mountains and skiing. It suits less those seeking a big city, a warm climate or an inexpensive life.

Districts and neighbouring towns

• Central Andorra la Vella - the old quarter, parliament, government offices and shops on the main avenue.
• Escaldes-Engordany - the continuation of the capital with thermal baths, offices and modern apartment buildings, popular with foreigners.
• La Massana and Ordino - quieter and higher in the mountains, closer to the resorts, family homes and mountain views.
• Sant Julià de Lòria - the south of the country near the Spanish border, slightly cheaper housing.

Housing and prices

Housing in Andorra is expensive and scarce: a one-bedroom flat in the capital or Escaldes usually costs €1,200-1,800 a month in 2026 ($1,345-2,017), and a studio €700-1,000. Groceries, fuel, electronics and alcohol are cheaper than in Spain and France thanks to the low 4.5% consumption tax. Since 13 February 2026 the tax on property purchases by foreigners has doubled: 6% on the first property and 10% from the second, plus a 4% transfer tax.

Taxes

Andorra is one of the mildest tax jurisdictions in Europe. Income tax: 0% up to €24,000 a year, 5% up to €40,000 and 10% above. Corporate tax is 10% and the general consumption tax 4.5%. A person becomes tax resident by spending more than 183 days a year in the country or keeping their centre of business interests here. Double tax treaties have been signed with Spain, France, Portugal and several other countries.

Practicalities

• Getting there. There is no major airport: Barcelona is about 200 kilometres away and Toulouse roughly the same, with bus connections.
• Entry. Andorra is not in the European Union or Schengen, but it can only be reached through Spain or France, so a foreigner from a visa-requiring country needs a Schengen visa.
• Language. Catalan is official; Spanish, French and Portuguese are widely spoken.
• Climate. Mountain: snowy winters and cool summers, with the town above 1,000 metres.
• Healthcare. A compulsory social security system operates, and complex treatment is often done in Barcelona or Toulouse.

Moving and legal status

There are two routes. Active residence is for those employed within quotas or running their own business in Andorra and living there. Passive residence is for people who do not work in Andorra. Since 13 February 2026, under Law 2/2026, it has three routes: €1 million (about $1,121,000) in Andorran assets, meaning financial instruments and shares in local companies, €800,000 (about $896,800) in residential property, or €400,000 (about $448,400) in the national housing fund. The €50,000 deposit (about $56,100) is now non-refundable with few exceptions. A passive resident must live in the country at least 90 days a year and may not work in Andorra.

Business

A foreigner can open a company in Andorra and be its director, but active residence through business requires real presence: an office, activity in the country and registration with social security. Self-employed social security contributions are a noticeable fixed cost. Banks are conservative and check the source of funds in detail.

Is Andorra la Vella worth considering for life

Pros: income tax of at most 10%, safety, mountains and skiing, a low consumption tax and proximity to Barcelona and Toulouse. Cons: very expensive and scarce housing, a doubled tax on property purchases by foreigners, a high passive residence threshold, a small town and mandatory residence in the country. Andorra suits an entrepreneur or high-earning professional ready to live in the mountains. Write in the chat and we will compare Andorra with other low-tax countries.