Andorra vs Ireland: Which is the ideal choice for the creation of your holding company

Andorra, a Pyrenean principality

Nestled between France and Spain, Andorra offers an idyllic and discreet setting for business. Its attractive tax system, stable political environment and non-EU status (with OECD agreements¹) make it a relevant choice for holding companies.

¹Consult Andorra’s agreements with Europe

Advantages of Andorra for holding companies:

• Corporate tax rate (CIT) of 10%, one of the lowest in Europe.
• Tax exemption on dividends received from foreign subsidiaries.
• No withholding tax on dividends paid to non-residents.
• Double taxation agreement with more than 50 countries, including France and Spain.
• Enhanced banking privacy and data protection.
• Quick and easy company formation procedure.
• Affordable cost of living and skilled workforce.
• Exceptional living environment and preserved natural environment.
• An exceptional level of security for goods and people.
• State-of-the-art, high-quality health services.

Ireland, an attractive green island

Ireland, a member of the European Union, attracts investors with its competitive tax system and access to the European single market.

Advantages of Ireland for holding companies:

• Corporate tax rate of 12.5%, one of the lowest in Europe.
• Tax exemption on dividends received from foreign subsidiaries under certain conditions.
• Refund of VAT on business expenses.
• Access to the European single market for more than 450 million consumers.
• English-speaking and highly skilled workforce.
• Modern infrastructure and a well-developed transport network.

Andorra vs Ireland: Detailed Comparison

Why is investing in Andorra for the creation of a holding company more advantageous?

• Lower corporate tax rate: Andorra offers a corporate tax rate of 10%, compared to 12.5% in Ireland.
• Full exemption on dividends: Andorra fully exempts dividends received from foreign subsidiaries, while Ireland applies it under certain conditions.
• Enhanced banking privacy: Andorra offers a higher level of banking privacy than Ireland.
• More affordable cost of living and company formation: Andorra is more financially accessible than Ireland.
• Exceptional living environment: Andorra offers a unique and unspoilt living environment.

Andorra’s agreements with the OECD and the United States of America

Andorra has developed a series of agreements with the OECD, France, but also other countries such as the United States to strengthen its tax transparency and align with international standards. Here is a summary of the main agreements:

1. Convention on Mutual Administrative Assistance in Tax Matters (1961)

This agreement allows signatory countries to exchange tax information upon request, with the aim of combating tax evasion and evasion. Andorra signed the convention in 2009 and brought it into force in 2011.

2. Multilateral Convention against BEPS (2016)

BEPS (Base Erosion and Profit Shifting) aims to combat tax avoidance practices by multinationals. Andorra signed the convention in 2016 and brought it into force in 2019.

3. Automatic Exchange of Financial Account Information (AEOI)

The AEOI aims to increase tax transparency by automatically exchanging financial account information between signatory countries. Andorra signed the agreement in 2014 and brought it into force in 2017.

4. Tax Transparency Agreement (FATCA)

FATCA aims to combat tax evasion by U.S. citizens. Andorra signed the agreement in 2014 and brought it into force in 2015.

5. Convention on Mutual Assistance in Criminal Matters (2013)

This agreement allows signatory countries to cooperate in the investigation and prosecution of tax offences. Andorra signed the convention in 2013 and brought it into force in 2015.

6. Agreement on Cooperation in Tax Matters (2009)

This agreement aims to strengthen cooperation between Andorra and the OECD in tax matters. It covers areas such as the exchange of information, mutual administrative assistance and the fight against tax evasion.

Impact of Agreements

Andorra’s agreements with the OECD have had a positive impact on the country’s tax transparency. They have enabled Andorra to comply with international standards and strengthen its collaboration with other countries in the fight against tax evasion.

Advantages for Andorra

Andorra’s agreements with the OECD have brought several benefits to the country, including:

• Improvement of Andorra’s international reputation for tax transparency.
• Increased confidence of foreign investors.
• Strengthening collaboration with other countries in the fight against tax evasion.
• Access to OECD technical assistance in tax matters.

Andorra’s agreements with the OECD have contributed to making the country a responsible and transparent player in the field of international taxation. They have enabled Andorra to strengthen its collaboration with other countries and improve its attractiveness for foreign investors.

Andorra is proving to be a more advantageous choice for the creation of a holding company than Ireland, thanks to its more attractive taxation, enhanced banking confidentiality, affordable cost of living and exceptional living environment.

List of countries with which Andorra has a double taxation agreement:

Europe:

• Austria
• Belgium
• Cyprus
• Denmark
• Spain
• Finland
• France
• Greece
• Guernsey
• Hungary
• Iceland
• Ireland
• Jersey
• Liechtenstein
• Luxembourg
• Malta
• Monaco
• Norway
• Netherlands
• Portugal
• Czech Republic
• San Marino
• Slovakia
• Slovenia
• Sweden

America:

• Argentina
• Brazil
• Canada
• Chile
• Colombia
• Costa Rica
• United Arab Emirates
• United States
• Mexico
• Panama
• Peru
• Dominican Republic
• Uruguay

Africa:

• Botswana
• Mauritius
• Morocco

Asia:

• South Korea
• United Arab Emirates
• Singapore

Oceania:

• Fiji

Remarks:

• This list is not exhaustive and may be subject to change.

Additional information

• For a more detailed analysis of your situation, it is important to consult an international tax expert.
• The choice of location for a holding company depends on many factors, such as the structure of your group of companies, your investment objectives and your risk profile.

Do not hesitate to contact our experts for personalised advice and to explore the opportunities offered by Andorra for the creation of your holding company.

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