Andorra: Labour Regulation
All foreigners wanting to work in Andorra need work permits. These are obtained by employers, whether Andorran individuals or companies, on behalf of employees. Until very recently, self-employment was not allowed until after 10 years' residence or trade in Andorra. The Foreign Direct Investment Law of July 2012 now allows resident and non-resident individuals to own 100% of any company.
A new immigration law passed in 2002 was highly contentious, but legalised the situation of about 7,000 'pink slip' long-term immigrant workers, as well as setting new rules for the issuance of work permit quotas which give preference first to citizens from Andorra's neighboring countries, then to citizens from the countries of the European Union, then to citizens of countries with which the principality has signed international agreements, and finally immigrants from third party states. Under the law, the government sets annual quotas for new issues of renewable work permits.
There are separate types of non-renewable work permit for temporary and seasonal workers, to which the quotas don't apply. The holder of such a work permit must leave the country within one month of expiry of the permit.
Renewable work permits are issued first for 6 months, extensible for a further year; then a temporary residence card is issued valid for a renewable 2 years; then, a 5-year ordinary residence card is issued; and finally a 10-year privileged residence card is issued. Fees are modest, except that the employer must pay a small amount when first applying for a permit.
Applications for work permits must include photographs, home police certificate, proof of occupational qualifications, cv, passport, property ownership or rental details and marital status certificate. The CASS will conduct a medical examination.
The New Law on Residency was introduced in 2012 and applies to all applicants from June 27, 2012. From this date onwards, three categories of residency have been introduced:
Category A: This has the same requirements as the previous 'passive residency' (see below) and requires a 'top up' investment of EUR400,000. Applicants must commit to spending a minimum of 90 days per year in the country and the principle applicant must deposit a bond of EUR50,000 for him/herself and EUR10,000 for each dependent with the Andorran Institute of Finance. The bond may be deducted from the required investment of EUR400,000 and will be refunded upon departure. All applicants must produce proof of real estate rental or ownership, provide legalised police certificates and have private medical insurance.
Category B: Essentially a business permit. The permit will be granted to businesses who conduct at least 85% their activity outside Andorra. Instead of the 'top up' investment, category B permit holders are subject to a 10% tax.
Category C: The 'Cultural Permit' is for musicians, artists and the like. Individuals must carry out at least 85% of their activities outside Andorra and must be able to provide proof of their international achievements. A refundable deposit of EUR50,000 for the head of household and EUR10,000 for each dependent must be paid to the Government.
On July 17, 2012, the government announced that the new quota of 500 permits per year would be split as 300 for category 'A' type permits, and 100 each for categories 'B' and 'C'.
Prior to the introduction of the new law, the Law on Passive Residence Permits November 2006 established that a quota would be determined periodically according to the “economic and social needs of the Principality of Andorra”.
An initial quota of 500 such permits was set. Passive residents do not work or carry out professional activity in the principality.
New entrants to the Principality were required to:
- Show minimum annual income of 300% higher than the minimum wage in Andorra for the head of the family plus a supplement of 100% for each dependent family member;
- Prove good conduct in their previous domicile;
- Produce health insurance and a pension plan;
- Own or rent a house or apartment in the Principality;
- Pay a non-interest-bearing deposit of EUR30,000 plus EUR7,000 for each dependent to the Andorran National Institute of Finances (INAF) which was refundable on departure.