Andorra

Andorra, nestled in the Pyrenees Mountains and bordered by France and Spain, is one of the world’s tiniest nations. Despite its modest size, Andorra is renowned for its breathtaking landscapes and a unique status that makes it an attractive destination for those seeking a balance between nature, culture, and tax advantages.

Andorra, a compact European nation, doesn’t offer direct citizenship-by-investment. Depending on initial residency type, one can secure residency and, eventually, full citizenship after two decades or more. Investors opt for the Andorra investment visa for tax advantages.

Andorra, one of Europe’s smallest countries, sits at the France-Spain border, remaining non-EU. Andorrans enjoy visa-free travel to France and Spain, with a tax-friendly environment, void of wealth, income, and capital gains taxes

Key benefits and Highlights of Andorra:

• • Strong Prosperity: Despite its small size, Andorra ranks among the top 30 countries globally in terms of GDP per capita, reflecting its economic prosperity.
  • Tourism Dominance: Tourism is the primary contributor to Andorra’s economy, comprising over 80% of its GDP, with more than ten million visitors arriving each year.
  • EU Customs Union: While not an EU member, Andorra is part of the EU Customs Union, utilizing the euro as its official currency, and granting its citizens visa-free travel to France and Spain with quick access to Schengen visas.
  • Favorable Tax Regime: Andorra is an attractive destination for the affluent due to its low corporation and income tax rates, and it imposes no taxes on wealth, capital gains, inheritance, property, or dividends.
  • Residency Advantages: The Andorran investment program provides residency perks, including visa-free travel to Spain and France, 90-day stays in Schengen nations, minimal annual residence requirements, and no automatic exchange of banking information for tax residents.
  • Multilingual Education: Andorra offers a high-level education system where children are educated in Catalan, French, Spanish, and English, providing a diverse and comprehensive learning environment.
  • Top-Tier Healthcare: Andorra’s healthcare system is globally renowned, covering a significant portion (75-90%) of medical expenses and contributing to an impressive average life expectancy of up to 83 years.
  • Low Crime Rate: Andorra maintains one of the world’s lowest crime rates, enhancing safety and security for residents.
  • Tax Advantages: Andorra’s tax benefits stand out when compared to many other European Union countries, making it an attractive destination for those seeking financial advantages.

• To invest in Andorra or establish a company, you are required to provide the government with the following documentation and meet specific conditions:
  • Demonstrate a sufficient income, surpassing 300% of the annual minimum wage as per the local legislation, and an additional 100% for each dependent, if applicable. This may be substantiated by either a tax return from your home country, along with supporting bank statements.
  • Present a clean criminal record, which should include certificates from all countries where you have resided for a minimum of one year since the age of sixteen.
  • Show proof of ownership of residential property or a commitment to acquire one within a year after submitting your application.
  • Commit to making Andorra your permanent residence, spending a minimum of 90 days in the country each year.

To establish legal residence in Andorra, individuals are required to invest a minimum of €400,000 in one of the following ways:

• Investing in real estate within the Principality of Andorra.
• Holding share capital or equity in Andorran resident companies.
• Investing in debt instruments issued by public administrations or private companies within the Principality of Andorra.

This investment secures a residence permit, albeit one without the right to work in the country. All income must be sourced from abroad. The primary applicant must invest €350,000 in real estate, national securities, investment funds, or business ventures, or deposit this amount in an interest-free account. Family members are welcome to join, requiring a €10,000 fee for each member, which is then deducted from the principal investment. For example, if a married applicant with two children applies, the investment amount would be €320,000, with a €10,000 deduction for each family member, totaling €350,000.

6.- Fees:

Please note that these are the minimum fees involved in each program. There may be additional fees associated with the application process, such as legal fees and translation fees.

Is it required for me to renew my Andorra investor visa?

Initially, the investor and their family are granted a one-year residence permit, which can subsequently be extended for two years, followed by another two years, and ultimately for ten years. During the renewal process, the investor must demonstrate their presence in the country for at least 90 days, timely payment of bills, and regular income credited to their account.

What are the tax benefits of relocating to Andorra?

Andorra’s highly advantageous tax policies make it a preferred destination for the affluent, drawing individuals from Spain and France who seek residency to benefit from favorable tax regulations. Residents enjoy various tax exemptions, including income from government bonds, dividends, and capital gains on certain investments. Capital gains tax is waived on assets held for over ten years, with no double taxation if the investor has already paid more than 10% in capital gains tax in their home country. Personal income tax rates range from 0% for income up to €24,000 per year to 10% for other scenarios, with self-employed individuals contributing €450 per month for social security. Corporate tax stands at 10%, with the potential for a 2% reduction in specific cases. Andorra’s VAT rate is only 4.5%, resulting in cost-effective prices for goods and services compared to neighboring countries. To obtain tax residency, spending more than 183 days annually in the country is required, and active residency status necessitates a specific request to the tax office.

Is dual citizenship possible in Andorra?

No, individuals who are citizens of Andorra cannot hold dual nationality; they must renounce their previous citizenship.

Will my child automatically acquire citizenship if born in Andorra?

No, a child born in Andorra to foreign parents does not automatically gain citizenship. Instead, citizenship is granted after their parents have chosen to relocate to Andorra and have resided there for a period of ten years.

Make Andorra your second home 

Visa-Free Countries

Population:

81,588 (2023 est.)

GDP (per capita):

US$49,900 (nominal, 2023 est.)

GDP (purchasing power parity):

US$58,100 (2023 est.)

Capital city: Andorra la Vella

Time zone: Central European Time (UTC+1)

Total area: 467.63 km2

Languages: Catalan (official), Spanish, French, Portuguese

Currency: Euro (EUR)

Main industry: Tourism, banking, financial services, trade, construction

Schengen/EU: Andorra is not a member of the European Union. However they have freedom to circulate on Schengen Space

KEY ADVANTAGES

• Low Taxation: Andorra’s tax-friendly environment, with no income tax, capital gains tax, or inheritance tax, is a draw for those seeking tax efficiency.
• Natural Beauty: Andorra’s stunning mountain landscapes offer year-round recreational opportunities, from winter skiing to summer hiking and biking.
• Safety and Quality of Life: Andorra is known for its safety, strong healthcare, and education systems, making it an ideal place to live and raise a family.

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The materials contained in this page are provided for general information purposes only and are not intended to provide legal or other professional advice. Processing times and costs will vary depending on a number of factors. CitizenMatch is not responsible for any changes to the time and cost estimates; we can provide specific information on an individual basis. All rights reserved.