After signing an EU association agreement on October 19, 2026, Andorra is closing the old investment-based route to residency for EU citizens and replacing it with a strictly limited annual quota of places.
In short
- Andorra and San Marino signed association agreements with the EU on October 19, 2026, but they have not yet entered into force — ratification is still required.
- For EU citizens, the investment route to Andorra residency (from €600,000) is closing, replaced by a quota of roughly 20–30 places per year.
- Employment and starting a business in Andorra remain grounds for residency outside the annual quota.
- Tax rates remain unchanged: 10% in Andorra and 7% in San Marino continue after the agreement.
- Andorra and San Marino are not becoming EU or Schengen members — entry into their territory still isn’t governed by Schengen rules.
What Andorra and San Marino Signed on October 19, 2026
On October 19, 2026, Andorra and San Marino signed association agreements with the European Union. The agreements have been signed but have not yet entered into force: they still require consent from the European Parliament, formal conclusion by the Council of the EU, and ratification within Andorra and San Marino themselves. Everything described below will only take effect once these procedures are complete. In exchange, both microstates gained access to the EU single market under common rules — in the financial sector, integration proceeds gradually and subject to specific conditions.
In return, both countries took on a set of obligations. The main one is a commitment to respect EU freedom of movement: EU citizens gain the right to enter without visas, but permits for permanent residence will be capped by an annual quota. In addition, both countries agreed to cooperate closely with the EU on information exchange and tax transparency.
permits for permanent residence will be capped by an annual quota
The agreements also include broad provisions on administrative assistance: if someone owes unpaid taxes, say, in Germany, and then moves to Andorra or San Marino, the country of residence will help collect that debt on the other country’s behalf.
The agreement was signed on October 19, 2026, but will only take effect after approval by the European Parliament, conclusion by the Council of the EU, and ratification within Andorra and San Marino.
Why Andorra and San Marino Are Not Joining the EU or Schengen
Despite the association agreement, Andorra and San Marino are not becoming EU member states. Neither country is joining the Schengen Area either. The agreement grants access to the EU single market and formalizes cooperation on tax information exchange, but it does not change either country’s status as a state outside both the EU and Schengen. In practice, this means crossing the border into Andorra or San Marino is still not governed by Schengen rules — unlike free movement within the Schengen zone, entry into these two countries remains a separate matter untouched by the agreement.
What Changes for EU Citizens Seeking Residency in Andorra
The investment program that previously allowed people to obtain residency in Andorra is closing to EU citizens. Under the old rules, applicants had to invest €600,000 — a requirement that applied equally regardless of nationality. Once the agreement is ratified and enters into force, this route will no longer exist for EU citizens.
In place of the investment program, a quota system is being introduced, modeled on the system already in use in Liechtenstein, where a strictly limited number of residence permits is allocated each year. Andorra is expected to adopt a similar model: preliminary figures point to around 20–30 places per year. Whether these places will be allocated by lottery, as in Liechtenstein, is not yet known — what’s clear is that the quota will be tightly capped.
In practice, this means that once the agreement takes effect, an EU citizen will no longer be able to buy property in Andorra and obtain resident status simply because they like the country. The only option will be to compete for one of a few dozen quota places per year — regardless of how much money someone is prepared to invest.
an EU citizen will no longer be able to buy property in Andorra and obtain resident status simply because they like the country
Andorra Residency for EU Citizens: Before and After
The investment route gives way to an annual quota of places
- Route to residency
- Dependence on investment amount
For EU citizens, the €600,000 investment path is closing. In its place: a strict annual quota of roughly 20–30 places.
Alternative Routes to Andorra Residency — Employment and Business
Employment and setting up a company in Andorra remain grounds for obtaining a residence permit independent of the annual quota. However, simply relocating to Andorra by choice — for example, buying property and settling there without working or running a business — will no longer be possible for an EU citizen once the agreement enters into force.
Employment and setting up a company in Andorra remain grounds for residency outside the quota — unlike relocating purely to live in the country.
Liechtenstein’s Quota System as a Reference Point for Andorra
A similar system is already in place in Liechtenstein: available residence permits are distributed through a lottery, with only a few dozen places available each year — a scale that Andorra’s new quota is now approaching.
The difference between the two countries lies elsewhere: Liechtenstein belongs to the European Economic Area and is bound by all EU rules on banking, financial regulation, and anti-money-laundering standards. Andorra and San Marino, under their association agreements, do not reach that depth of integration — financial cooperation with the EU affects them far less, even though full independence is no longer the case either.
Residency Quotas: Liechtenstein and Andorra
| Criterion | Liechtenstein | Andorra (expected) |
|---|---|---|
| Places per year | A few dozen | 20–30 |
| Allocation method | Lottery | Not yet known |
| Financial integration with the EU | Full, via the EEA | Limited, phased in |
Figures for Andorra are preliminary and may change after the agreement is ratified.
Tax Rates in Andorra and San Marino After the Agreement
From a tax standpoint, the association agreement changes nothing in either Andorra or San Marino. Andorra’s income tax rate stands at 10%, and San Marino’s at 7%. These rates remain unchanged after October 19, 2026, regardless of either country’s new status in relation to the EU.
The 10% rate in Andorra and 7% in San Marino remain unchanged even after the agreement takes effect.
Why Monaco Did Not Sign an Association Agreement With the EU
Monaco joined the association talks with the EU back in 2015, alongside Andorra and San Marino. It later withdrew from the process, citing the freedom-of-movement requirement as the sticking point. From Monaco’s perspective, such a rule would have increased the inflow of wealthy EU citizens into the country rather than making things easier — and Monaco was not willing to accept that condition.
such a rule would have increased the inflow of wealthy EU citizens into the country rather than making things easier
Frequently asked questions
When will the association agreement take effect, and when will Andorra’s new quota actually start working?
The agreement was signed on October 19, 2026, but it is not yet in force: it still requires consent from the European Parliament, formal conclusion by the Council of the EU, and ratification within Andorra and San Marino. The new residency quota and the closure of the investment program for EU citizens will only take effect once all these procedures are complete — not immediately after signing.
What happens to residence permits already granted under Andorra’s investment program?
The closure of the investment program applies to new applications from EU citizens after the agreement enters into force — there is no mention of revisiting permits already granted; the restriction applies only to future residency applications made through this route.
Does the end of the investment program and the new quota affect citizens of non-EU countries?
The new quota and the closure of the investment route are described specifically as a condition applying to EU citizens — part of Andorra’s obligations on freedom of movement within the union. The agreement says nothing separately about rules for citizens of third countries outside the EU, so there is nothing in it that would change the existing arrangements for them.
What happens if an EU citizen has already bought property in Andorra but hasn’t obtained residency yet?
Buying property on its own does not grant a right to residency, either now or after the agreement takes effect — after that point, the only options left for EU citizens are employment, setting up a company, or competing for one of the limited annual quota places, not property ownership as such.
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