ANDORRA

Name of country

• ANDORRA

Region

• Southwestern Europe, Pyrenees mountains, on the border between France and Spain (Need assistance with American tax services in Spain? Contact us for personalized support).

Population

• 85,645 (July 2021 est.)

General Introduction

• Andorra has a residency-by-investment program that requires a €400,000 minimum commitment. Real estate can be used as a vehicle for investment. Andorra is one of the world’s smallest countries, located on the border of France and Spain. It is located in Europe, yet it is not a member of the European Union. Andorrans can travel to France and Spain without needing a visa. It has a tax system that is beneficial to citizens. There are no taxes on wealth, income, or capital gains. In Andorra, there is no direct citizenship by investment program. It is possible to apply for citizenship and a passport after a long term of residence in Andorra, which must be at least 10 years.

Wifi Speed

• The most common broadband provider in Andorra is Orange Spain, with a maximum recorded internet speed of 597.83 Mbps, and the typical home user seeing speeds in the range of 37.12—206.37 Mbps.

Electrical outlet

• In Andorra, the power plugs and sockets are of type F. The standard voltage is 230 V and the standard frequency is 50 Hz.

Per Capita GDP 

Real GDP growth rate

• 1.1% (2015 est.)
• 1.4% (2014 est.)
• 0.1% (2013 est.)

Climate

• temperate; snowy, cold winters and warm, dry summers

Residence-by-Investment

Investment

• Andorra has a residency-by-investment program that requires a €400,000 minimum commitment. Real estate can be used as a vehicle for investment. 

Key Benefits

• Andorra is a country that provides various advantages to its citizens, such as including parents and including your child up to the age of 25 if they are enrolled in school. But it’s not only about family-friendly benefits; Andorra’s low taxes make it a desirable destination for high-earners. The population of this small but rich country has constantly increased, owing to more families relocating there with children or elderly relatives who require care.

Requirements

There are a number of criteria and paperwork that must be presented to the government if you want to invest or form a company in Andorra:

• Proof of income (either by tax return from your country with corresponding bank statements) which states that it exceeds 300% of the annual minimum wage legislation adding 100% per dependent if applicable.
• Clean criminal record including certificates from all countries where you have resided during at least one year since age 16 years
• Evidence proving ownership or intent to acquire residential property within twelve months after submitting application materials
• Establish residence in Andorra for a minimum of 90 days per year.

Procedures and Time Frame

• Collection of documents
• Opening an account in an Andorran Bank, transferring money to it sufficient to live in for a year. To open an account, you must go through due diligence and prove the legality of the origin of the funds. There are only four banks in the country, they have slightly different requirements for investors and opening an account. But it is important that the origin of the money is easy to trace. The bank will also help to prepare the remaining  documents decide on investments or confirm the lease.
• Contacting the migration service in Andorra: one day is for filling an application, another is for an interview. The application can include a husband or wife, children under 18 years old or children who are a fulltime education under 25 years old. The application will be reviewed within 3-8 weeks.
• Medical examination. Transferring money to INAF.
• Migration service approval. You can get a residence permit remotely throug a trusted representative.
• Within six months after obtaining a residence permit, it is necessary to make an investment in the required amount. 

Initially, the residence permit for the investor and his/her family is issued for a year. 

Performance Guarantee

Natural Resources

• hydropower, mineral water, timber, iron ore, lead

Ethnic Groups

• Andorran 48.7%, Spanish 24.6%, Portuguese 11.6%, French 4.4%, other 10.6% (2020 est.)

Languages

• Catalan (official), French, Castilian, Portuguese

 Religion

• Roman Catholic (predominant)

Median Age

• total: 46.2 years
• male: 46.3 years
• female: 46.1 years (2020 est.)

Urbanization

• urban population: 87.9% of total population (2021)
• rate of urbanization: 0.11% annual rate of change (2020-25 est.)

 Physician density

• 3.33 physicians/1,000 population (2015)

Government type

• parliamentary democracy (since March 1993) that retains its chiefs of state in the form of a co-principality; the two princes are the President of France and Bishop of Seu d’Urgell, Spain

Unemployment Rate

• 3.7% (2016 est.)
• 4.1% (2015 est.)

Taxes

Headline Personal Income Tax Rate (highest marginal tax rate) – 10%

Headline Corporate Income Tax Rate (excluding dividend taxes)– 10%

Territorial Tax / Worldwide Tax / Hybrid 

• Andorra is a small European country with a well-deserved reputation for low taxes. A low value-added tax, no sales tax, and a low personal income tax are among the features. The advantages also apply to the corporation tax rate in Andorra. Andorra’s tax rates are not just lower than those in practically every other adjacent country, but they are also reasonably simple. However, if you are considering shifting to Andorra, it is necessary to have a thorough awareness of the situation. This is a primer on Andorra’s individual and corporate tax rates. We’ll talk about sales tax, VAT, income tax, and other tax rates.
• All salaries, most foreign investment income, and pension income are liable for the same tax rate. Income from Andorran investments (e.g., returns on Andorran government bonds and dividends from Andorran companies) is exempt from this tax rate. There are further exemptions and inclusions for the income that is taxed — please refer to an official source for an exhaustive list.

Special Tax Regimes 

• Andorra is considered a tax haven for wealthy people. The tax regime of the principality is one of the most profitable in Europe. Therefore the investment program of Andorra is popular among Spaniards and the French, who become residents of the country and enjoy the local preferential tax regime.