Given the process of economic opening in Andorra during the last years, the new Andorran legislation allows the establishment of companies with 100% foreign capital.
On the other hand, the taxation’s homogenization and a determined commitment to transparency and international cooperation following the standards required by both the European Union and the OECD, allows Andorra to leave the tax havens’ list, but still maintaining a very competitive fiscal regime.
Andorra is not only an optimal option to invest, but also to live. Located in an incomparable natural environment between Spain and France, with the highest levels of income per capita in the world and citizen security, residents enjoy both a very high quality of life and a very attractive fiscal system.
A country with tax advantages
Andorra has one of the lowest corporate tax rates in the world, it’s only 10%, and some companies, given their activity, can enjoy an effective rate of 2%.
Personal income tax rate is 10%, the first 24,000 euros being exempt of taxable income (from 24,001 to 40,000 the tax rate is 5%), the first 3,000 euros of capital gain and dividend income from Andorra is also exempt, which significantly reduces the effective rate.
The IGI (equivalent to VAT) is only 4.5%.
We must also mention that in Andorra there is no property tax, neither inheritance nor donation tax.
A country opened to foreigners
Andorra has opted for market liberalization with the approval of the Law 10/2012, on June 21st, of Foreign Investment in the Principality of Andorra, which allows the establishment of companies with 100% foreign capital.
On the other hand, if you own more than 20% of an Andorran company’s shares and hold a position as a member of the Board, you can apply for residence.