Investing in Andorra

The advantages of investing in Andorra

A modern, prosperous and dynamic country

Andorra has more to offer than just one of the highest per capita incomes of any country in the world, it also enjoys a high level of public safety and one of the world’s best healthcare systems. An ideal country in which to invest, and also to live.

A competitive business environment

Since 2012, a legislative change has permitted corporations with 100% foreign capital to be incorporated in Andorra. The standardisation of the Andorran tax system with those of European countries, but with a lower tax burden, has allowed Andorra to remove itself from the list of tax havens while retaining excellent competitiveness.

Investing and living in Andorra

A country that is open to foreign investment

Recent changes in Andorran legislation have been geared towards facilitating the admission of foreign investors, the executives of whom will find all the facilities they need to live in the country. Thanks to the approval of Law 10/2012, of 21 June, on Foreign Investment in the Principality of Andorra, corporations with 100% foreign capital may now be created.

An idyllic place to live

Are you contemplating a move to Andorra? The per capita income in our principality is one of the highest in the world, and we also have a high safety index and one of the lowest crime rates. This intriguing combination is also complemented by excellent healthcare, a multilingual and virtually free education system - with the exception of a few fee-paying schools - and highspeed fibre optic broadband throughout the country.

Taxes that are among the lowest in Europe

In Andorra, companies benefit from some of the lowest rates of corporation (from 2% to 10%) and income tax (between 5% and 10%). There are no taxes on successions or inheritance, and social security contributions are also some of the lowest in Europe. IGI, a value added tax on sales (equivalent to IVA in Spain or TVA in France), is only 4.5%, the lowest across Europe.

Strategic location

Andorra is situated in the heart of the Pyrenees, nestled strategically between France and Spain. Road links are good, allowing the journey from Barcelona or Toulouse to be completed in less than 3 hours.

A country with tax benefits that is not a tax haven

More than 20 tax information exchange agreements have been entered into with Spain, France, Portugal, Switzerland, Germany, Austria, Belgium, the Netherlands, Liechtenstein, San Marino, Monaco, Poland, the Czech Republic, Norway, Finland, Iceland, Sweden, Denmark, Greenland, The Faroe Islands, Argentina and Australia. These agreements have marked the end of Andorra as a tax haven and facilitated its removal from the OECD (Organisation for Economic Co-operation and Development) black list. Meanwhile, double taxation agreements have been signed with Spain, France, Portugal, Luxembourg, Liechtenstein, the United Arab Emirates, Cyprus, Malta, San Marino and Hungary to avoid double taxation between Andorra and these countries.

0 %(máx.)
Corporation tax
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Inheritance / succession tax
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IGI (equivalent to VAT)

Andorra, a secure country for your investments

The Andorran economy boasted a GDP of 2,584 million euros in 2016 (+1.9%). Average annual growth of 3.2% has been maintained since 2000. Total imports equalled 1,226.1 million euros in 2016. The economy is focused on the service sector, with considerable importance also being placed on financial activities (20.1%) and trade (14.8%).

The evolution of foreign investment legislation

2010
Law 95/2010 on Corporation Tax + Law 94/2010 on Income Tax for Non-Residents
2012
Law 9/2012 on Immigration + Law 20/2012 on Foreign Investment + Law 11/2012 on General Indirect Tax (IGI)
2013
Signing of the Double Taxation Agreement (CDI) between France and Andorra
2014
Law 5/2014 on Income Tax for Natural Persons (IRPF) + Signing of the Double Taxation Agreement (CDI) between Luxembourg and Andorra
2015
Signing of the Double Taxation Agreements (CDI) with Spain, United Arab Emirates, Portugal and Liechtenstein
2016
Signing of the Double Taxation Agreement (CDI) between Malta and Andorra
2018

Andorra is removed from the most recent list of European Union tax havens

Signing of a new Double Taxation Agreement (CDI) between Cyprus and Andorra

2020

On 16 October Andorra becomes the 190th member of the IMF

2021

Signing of the Double Taxation Agreement (CDI) between San Marino and Andorra  - Hungary and Andorra  

10 Frequently Asked Questions about investing in Andorra

Andorra is one of the most competitive European countries in terms of taxation. Andorran taxation conforms to all OECD standards, and Andorra has been removed from the list of tax havens. Corporation tax, personal income tax and non-resident income tax rates are at only 10%. IGI, the general indirect tax (equivalent to VAT), is at 4.5%. Moreover, Andorra has treaties which avoid double taxation.

The country also offers other advantages that are highly valued by investors, such as security, legislation, political stability and a high quality of life.

Thanks to the approval of Law 10/2012 of 21st June, on Foreign Investment in the Principality of Andorra, companies with 100% foreign capital may now be created. To set up a foreign-capital company in Andorra, the first step is to apply for reservation of the corporate name and authorisation for the desired type of investment. Four or five weeks later, you will receive an answer from the ministry concerned. After receiving authorisation to proceed with the foreign investment, and prior to the company’s incorporation before a public notary and registration at the Andorran Companies Registry, a company bank account must be opened. The last step is to request the commencement of trading by the company.

Non-resident foreigners can also invest in Andorra by purchasing property in the country (a foreign property investment permit is required).

Investment and residence in Andorra are both profitable. The tax burden on companies based in the Principality is significantly lower than in most European countries, both in terms of personal income tax (between 5% and 10%) and in terms of corporation tax (between 2% and 10%). IGI (general indirect tax), equivalent to VAT, is the lowest in Europe (only 4.5 %). If, in addition to investing in the country, investors establish residence in Andorra, dividend withholding tax is 0%. To invest in Andorra, you can create a new business or company, purchase an existing one, hold an interest in an Andorran company as a shareholder, or acquire property. The choice of one or other option will depend on the needs of each investor, but all of these cases are highly profitable.

Thanks to the approval of Law 10/2012 of 21st June, on Foreign Investment in the Principality of Andorra, companies with 100% foreign capital may now be created, and there are significant fiscal benefits. Residents also enjoy other advantages such as 0% taxation on company dividends and exemption from taxation on gifts or inheritances.

In the case of foreign investors (without residence in the country), the company or partnership will pay its taxes in Andorra, and the entrepreneur would be subject to the taxation of the country in which he/she is resident for tax purposes.

The main taxes in Andorra are:

  • Personal Income Tax (IRPF): a maximum of 10% on €40,000 and above. On income of between €24,000 and €40,000, taxation is at 5%, and the first €24,000 is exempt from taxation. Savings income up to €3,000 is also exempt from taxation, and the sale of cryptocurrencies is taxed at a maximum of 10%.
  • Corporation Tax (IS): a maximum of 10% is applied to net income, which, depending on the activity of the company, can be reduced to 2% or even 0%.
  • IGI (General Indirect Tax, equivalent to VAT): only 4.5%, the lowest in Europe.

There are no wealth, inheritance or gift taxes. Furthermore, Andorra does not make it compulsory to declare assets abroad, nor does it apply any exit tax (the taxation of latent capital gains when a taxpayer changes their tax residence to another country).

To set up a company in Andorra, the following five steps must be followed:

  1. Apply for company name: up to three names can be submitted, in order of preference. The government will provide confirmation within 10 days.
  2. Application for investment authorisation: each non-resident shareholder or partner must request prior authorisation for foreign investment in an Andorran company. This process takes approximately 10 to 15 days.
  3. Pre-opening of the company bank account, with the documents required by the chosen bank. The activity of the company, as well as the origin of the funds, and your profile, must be outlined with complete transparency. Pre-authorisation can take between one week and four weeks.
  4. Incorporation and registration of the company at the Companies Registry: the statutes are formalised before an Andorran notary, and the company is registered at the Andorran Companies Registry.
  5. Commencement of trading by the company: at this point you must have a confirmed address for your company, an electrical report for your offices or premises and a current contract for a fire extinguisher at your company’s address.

The steps to invest in Andorra are somewhat different for residents from those for foreigners. For foreign investment, after applying for the company name, an application for authorisation of the investment must be made on behalf of each non-resident partner or shareholder. If the investor is already a resident, he/she only needs to submit the application for the company name.

The following steps are identical for foreigners and residents: opening a bank account in an Andorran bank and depositing the share capital, incorporation and registration of the company at the Andorran Companies Registry, and opening of the company’s business (a physical premises/address and at least one employee are required).

The equalisation of Andorran taxation with that of European countries removed Andorra from the OECD’s list of tax havens in 2011 and from the European Union’s list in 2018, with no loss of its tax competitiveness due to low taxation. Andorra’s commitment to transparency and international co-operation, through its signing of more than 20 agreements on the exchange of fiscal information (IICs), meant that the country was no longer considered as a tax haven and was removed from the OECD (Organisation for Economic Co-operation and Development) blacklist in 2011. At the same time, the signing of double taxation agreements with Spain, France, Portugal, Luxembourg, Liechtenstein, Cyprus, the United Arab Emirates, Malta, San Marino and Hungary prevents double taxation between Andorra and each of those countries.

To pay taxes in Andorra, the effective tax residence must be changed. A person can live in different countries, but can only have fiscal residence in one of them (the one where he/she will be taxed).
In order to establish fiscal residence in Andorra, the following requirements must be satisfied:

  • Living de facto in the Principality for more than 183 days per year (either renting a home or owning it).
  • The nuclear household (partner and children) must also have its residence in Andorra.
  • The economic centre should be in Andorra.

The cost of setting up a company in Andorra will depend on the type of business, but in general terms, it can be as much as €5,500, which includes professional fees, governmental and notary’s fees. 

To this should be added the minimum share capital of the company (€3,000 in the case of an S.L. or €60,000 in the case of an S.A.) and the annual maintenance cost of the registry (about €850 for an S.L. and about €950 for an S.A.).

Noteworthy services that will help you to invest in Andorra

Creation of corporations

We advise you on the legal forms of companies in the Principality of Andorra and the procedures required to open a corporation within the country.

Immigration and Residency

If you need to establish your residence in Andorra, be it through active or passive residency, we will assist you with the procedures for procuring the permit.

Management of companies

We supply you with an Andorran address that will enable you to benefit from corporation tax of less than 10%, with tax benefits of up to 80%.

Do you want to invest in Andorra?

We’ll be at your side!