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Residency and tax residency in Andorra for Family Offices
When we think of a life full of luxury and comfort, we automatically think of the great metropolises such as Dubai, Monaco, Ibiza, Paris, London, and many more cities that are usually located in the old continent.
Most of the countries located in Europe have great tourist and entertainment appeal. However, it is also one of the most important business centers worldwide from a financial perspective.
Some of the disadvantages of the Old Continent could be considered its high cost of living and generally high taxes that are usually increased for people of high income or high wealth.
Although most countries have such wealth taxes and their legal frameworks are oriented to the benefit of the state and not the citizen, a few countries such as Switzerland and Liechtenstein have already been discovered. They have a reputation as significant tax paradises, which have attracted many wealthy individuals.
But Switzerland and Liechtenstein are not the only countries that offer benefits for high-income individuals who want to invest or move their financial center of operations to their territories. One of Europe's best-kept secrets is Andorra.
Andorra is a small Principality located between Spain and France, specifically near Barcelona in the case of the former and Toulouse in the case of the latter. Its privileged location allows wide mobility between Spain and France.
This tiny nation has recently been the destination of dozens of Spanish influencers and Youtubers who are escaping from the high taxes regime and Spanish cost of living. Yet, Andorra is the perfect destination for people who are looking to optimize their taxes while having a high standard of living just minutes from Barcelona.
In a nutshell, we will give you some insights about the Andorran tax regime:
- Income and corporate tax is up to 10%. It's a bargain compared to 24% in Spain and 20% in France.
Although Andorra is not part of the European Union, it has agreements of different kinds with most of the countries that make up the union, which facilitates economic and financial operations.
Among the attractions of Andorra are not only its majestic mountains and its strategic location; it is a country with lower costs than countries like France and England and remains in the range of the cost of living of Spain.
The Principality not only offers opportunities for financial profiles but also for high-performance athletes, artists, scientists, and highly skilled people. At the same time, it offers through its legal frameworks great incentives to people who move their financial operations to its territory, among which stand out:
- The non-existence of wealth tax, inheritance, or donation tax.
- Income and corporate tax maximum of 10%.
- Profits of companies listed on the market are not taxed.
Andorra is a hidden gem located in the heart of Europe where you will enjoy a top standard of living while optimizing your taxes.
Residency in Andorra
Understanding that not all profiles are the same or have the same interests, the Andorran residency card can be achieved in two different ways. The first one is an active residence and the second one a passive residence which will be explained below.
- The first method is through an active residence which is generally known as tax residency. According to the Law 5/2014 of Andorra, the requirements to be eligible are:
- To have lived a minimum period of 183 days within the Principality territory. In such a period, certain absences related to financial activities could be considered as long as it is verifiable that the individual is not applying for a residence in another country.
- Demonstrate that the individual's financial interests are located in Andorra.
- No criminal record of any kind.
- In the case of married couples, both must live in Andorra, and if they have minor children, they must also live within the territory of the Principality.
- Individuals hired by national companies or have created a company in Andorra that complies with all the law requirements.
It should be noted that persons residing in France or Spain who work in Andorran territory or those who work in foreign entities are not eligible for tax residency.
The second method is through a passive residency that is usually associated with investments in particular sectors; the criteria for a person to be eligible are the following:
- A deposit to the government of Andorra for a value equivalent to 50,000 euros.
- Invest 350,000 euros plus the bond or deposit of 50,000 euros in assets of the Andorran Principality.
- Do not possess any type of criminal record.
- Prove that you earn enough funds to demonstrate that you are able to cover your personal expenses and, in the case of having a family, to cover their expenses as well.
- Have a health and accident insurance policy.
Suppose these characteristics still do not make you feel confident about investing in the Andorran tax haven. In that case, you should also know that it is one of the countries with less inflation in the world, it has a consolidated banking system, and its economy is based on a free market.
From a social perspective, Andorra has one of the lowest crime rates globally and one of the best health systems accessible to all the people who live there.
Its cultural and demographic richness make it an attractive place to enjoy great summer resorts. Being located in the Pyrenees mountains makes it the perfect place to enjoy the winter and the season's activities, such as skiing.
That is why Andorra is the perfect place to invest capital and receive the best benefits from it. The opportunity to have all the European benefits but at a lower cost makes this country a paradise to establish your family office.
Our team of experts and professionals are at your disposal. They are a highly qualified group of professionals who are more than capable of helping you to establish your residence and family office in Andorra. At the same time, you just take care of enjoying the wonders of this European country.
Our staff has a longstanding expertise in the legal, banking, and administrative aspects of moving your residence from another country to Andorra and knows how to proceed effectively to achieve residency in Andorra in the shortest possible time.
Through the alliances with our partners, you will be able to acquire more significant benefits when investing your money because you will do it intelligently and be advised by the best in their respective areas.
In MUNDO, we have a multidisciplinary team that specializes in diverse sectors such as:
- Foreign legal frameworks
- Foreign investments
This allows us to advise and guide you through the whole process of investing abroad, considering your demands and needs as a client and as an individual or family group.
If you are interested in moving your residence to Andorra in any possible way and later establishing your family office in that country, do not hesitate to contact MUNDO's services to obtain complete advice.
Setting up a Family Office can be a tricky task if you do not have the proper advice. If you wish to create your own Family Office and achieve financial freedom, then you have to assist at our upcoming Top Conference for Family Office.
Our Top Conference will next March 3rd 2022. Register here!
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