Relocating to Andorra

Andorra is attracting more and more French people in search of an idyllic living environment and advantageous taxation. Indeed, the Principality offers an attractive tax regime that can be particularly interesting for French taxpayers.

What are the advantages of expatriation to Andorra?

• Gentle personal taxation: Income tax in Andorra is progressive, with a maximum rate of 10%. The lowest incomes are not even taxed. In addition, social security contributions are lower than in France.
• Attractive corporate taxation: The corporate tax rate is set at 10%, making it one of the lowest in Europe.
• No wealth tax: In Andorra, there is no tax on real estate or movable wealth.
• A favourable capital gains tax regime: Capital gains are only taxed in the event of the sale of securities held for less than two years. Capital gains on real estate are not taxed if the property is resold after 10 years of ownership.
• An exceptional living environment: Andorra offers a unique living environment, with beautiful landscapes, a pleasant climate and optimal security.
• Optimal security: Andorra is one of the safest countries in the world. The crime rate is extremely low, and violent crime is rare.

What are the requirements to become a tax resident in Andorra?

To benefit from the Andorran tax regime, you must move to Andorra and establish your tax residence there. This means spending at least 183 days a year on the territory of the Principality.

There are two types of residency that allow you to settle in Andorra for tax purposes:

1. Active residence:

• This type of residence is aimed at people who carry out a professional activity in Andorra.
• There is no real estate investment requirement to obtain this type of residence.
• The different categories of professional activities:
  • Employee of an Andorran company
  • Freelancer
  • Manager or director of a company or group
  • Artisan
  • Professional
• Minimum periods of presence in Andorra:
  • 183 days a year in Andorran territory

2. Passive residence:

• This type of residence is aimed at people who do not carry out any professional activity in Andorra.
• It is necessary to make a real estate investment of a minimum amount of €600,000 to obtain this type of residence. But there are also other solutions.
• Types of real estate investments:
  • Buying a residential property
  • Purchase of building land
  • Investment in a real estate program
• Minimum periods of presence in Andorra:
  • 90 days a year in Andorran territory

Read our article on taxation in Andorra

Is relocation in Andorra right for you?

If you are looking for a more advantageous tax system and an exceptional living environment, tax expatriation in Andorra may be an interesting option to consider.

However, it is important to be well informed and to take into account all aspects of this decision before you start. In particular, it is important to make sure that you meet the requirements to obtain tax residency in Andorra and to measure the impact of this expatriation on your assets and your taxes in France.

Do not hesitate to call on a tax specialist specialising in expatriation to assist you in your efforts.

In addition to the tax advantages, expatriation to Andorra offers many other advantages:

• A relatively low cost of living: The cost of living in Andorra is lower than in France, especially when it comes to food, cars, fuel and more generally all everyday consumer products.
• A quality education system: The Andorran education system is recognized for its quality. The schools offer instruction in French, Catalan and Spanish.
• An efficient health system: Andorra has an efficient health system that is accessible to all residents. The system is based on a universal coverage model, which means that all residents have access to quality health care, regardless of income. The Andorran health system is made up of a public and a private sector. The public sector is managed by the Caixa Andorrana de Seguretat Social (CASS), which is the Andorran social security body. CASS covers the majority of health care, including hospital care, medical consultations and medications. The private sector is complementary to the public sector and offers a wide range of health services, such as dental care, eye care and physiotherapy.
• Purchase of vehicle without CO2 tax and VAT at 4.5%.

The steps to follow to expatriate for tax purposes in Andorra

1. Valid passport.
2. Criminal record certificate.
3. Proof of sufficient income.
4. Health insurance.
5. Marriage certificate (if applicable) and birth certificates for children.
6. Proof of accommodation in Andorra (rental contract or title deed).

All the documents to be filled in are in Catalan.

Testimonials from French expats in Andorra

Many people have chosen to move to Andorra for tax purposes. Here are some testimonials:

• Pierre, 45 years old, former senior executive: “I decided to move to Andorra to take advantage of more advantageous taxation after having created two companies in France. I therefore opted to create a holding company in Andorra in order to structure my expatriation fiscally and legally. I now enjoy an exceptional living environment. I don’t regret my choice. I have been living here for 5 years and I am very happy. »
• David, 64 years old, retired: “I chose to move to Andorra for my retirement. I enjoy a mild climate, an affordable cost of living and a well-functioning health system. I invested in real estate and I took advantage of it to create a patrimonial company. It’s great, I’ll be able to distribute my assets to my children in the simplest way and without taxes and all this legally. »

Conclusion

Tax expatriation in Andorra can be an excellent option for people looking for a more advantageous tax system and an exceptional living environment. However, it is important to be well informed and to take into account all aspects of this decision before you start.

Do not hesitate to call on a tax specialist specialising in expatriation to assist you in your efforts.