Active residency in Andorra: the key to advantageous taxation
Do you want to move to Andorra to benefit from its attractive tax system? Active resident status is for you! Find out how to take advantage of it while working or creating your business in the Principality.
Active residency: the key to living and working in Andorra
The Principality of Andorra distinguishes between two types of residence:
- Active residence, which gives the right to carry out a professional activity
- Passive residence, which does not allow you to work in Andorran territory
Also known as “working residence”, active residence is essential for entrepreneurs who want to domicile their company in Andorra, as well as for employees wishing to move there.
The conditions for becoming an active resident
To obtain the tax status of active resident, you must meet these 3 conditions:
- Working in Andorra as an employee or entrepreneur. Company founders must hold at least 20% of the capital.
- Reside at least 183 days a year in Andorra, with a possible interruption for holidays or business trips.
- Contribute to the Andorran social security CASS.
Steps to obtain active residency
The application for active residence must be submitted to the Servei d’Immigració of the Government of Andorra, together with the following supporting documents:
- Official form completed and signed
- Valid ID or passport
- Proof of address in Andorra
- Recent criminal record extract from the country of origin
- Employment contract or business plan
- Proof of affiliation to the CASS
A medical examination with the Andorran health services will also be required.
For personalized support, call on the Clickand gestoria, an expert in expatriation in Andorra.
A very favourable tax framework for active residents
By becoming an active resident, you have access to all the advantages of Andorran taxation:
- A personal income tax (IRPF) capped at 10%, compared to 45% in France
- No wealth tax or real estate capital gains tax
- Reduced social security contributions for employees and the self-employed
- The possibility of optimising your tax situation as a family thanks to the Andorran tax household
Thanks to these attractive measures, an active resident in Andorra can save several thousand euros in taxes each year compared to a country like France.
Setting up a company in Andorra: the right plan to become an active resident
It is in the interest of entrepreneurs to set up their business under the Andorran sun. In addition to benefiting from reduced taxes on a personal basis, they benefit from an ideal tax regime for their company:
- Reduced corporate tax, from 0% to a maximum of 10% regardless of the amount of your turnover.
- IGI (VAT equivalent) limited to 4.5% and exemptions for certain key sectors
- Ease of recruiting internationally and bringing in foreign employees
- Economic stability, a serene environment, whether from a security, educational or medical point of view.
With a tax cap of 10% and a reduced rate of 2%, the Andorran corporate tax is very competitive compared to neighbouring countries. A real boost for your company’s cash flow!
By registering your company in Andorra and becoming a manager, you will be able to combine these very interesting tax advantages to optimize your income.
The keys to launching your business in Andorra with peace of mind
Here are the main steps to set up a company in the Principality:
- Define your activity and deposit the initial share capital in an Andorran bank account
- Drafting the articles of association and registering your company in the Companies Register
- Obtain your license and register as a self-employed person
- Registering with the social security system (CASS) to benefit from health and retirement coverage
As soon as your company is operational, you can apply for your active residence permit as a manager.
To put all the chances on your side, trust Clickand. As a leading expatriate gestoria, we support you from A to Z in your move to Andorra: setting up a business, obtaining residency, relocation, solutions for families…
Do you want to take advantage of an unbeatable tax system in a country with a very high quality of life? With the status of active resident, you can finally live where others go on vacation! Contact us to open a new chapter in your life.
