INVEST IN ANDORRA
Political stability
Andorra has maintained neutral and peaceful relations with other countries since it was founded as a co-principality in 1278, with the signing of the Paréage (a feudal charter). For more than 700 years, Andorra has maintained its own borders, without being invaded or involved in any war. All this gives the Principality great political and legal stability, which is elementary if you are thinking of investing in a foreign country.
Favourable environment for foreign investment
For almost a decade, Andorra has progressively adopted several economic transformations, with the aim of attracting foreign investment and companies that wish to register their offices here. The place is very open to foreign capital and ownership, with no restrictions whatsoever.
Competitive tax framework
The Principality's tax policy is one of the most competitive in Europe and the world. As a result, the income tax rate ranges from 5% to 10%, whereas the corporate tax rate varies between 2% and 10%. Value added tax is the lowest in Europe. All this gives the country an unequalled competitive advantage over nearby territories.
Speaking of territories, location should not be underestimated as a key factor when setting up a company or investing abroad. In this sense, Andorra is ideally located between the airports of Barcelona and Toulouse, each one two hours away, which facilitates the connection with the main European capitals. This time can be reduced to just 20 minutes if you travel by helicopter or private jet, a service available upon request at Retreats by Andorra Sotheby's International Realty.
Financial system
The euro is Andorra’s official currency, and its five national banks are among the most profitable in Europe. All are fully compliant with international anti-money laundering standards. Thus, as a result of an intense economic opening process at international level, both the European Union (EU) and the OECD have ceased to consider the country as a tax haven.
Investing in the Andorran real estate sector
Import and export companies, or a holding company
Setting up an import and export company will be beneficial as business taxes are only between 2% and 10%. In addition, you will have the possibility of setting up a holding company for foreign investments that will be tax-free, like the profits for residents of Andorra.
Financial management company
Another interesting possibility is to finance companies with their registered office in Andorra from abroad, as you will be able to receive corporate tax of 2%.
For the last few years, the Principality of Andorra has been immersed in a process of economic opening and harmonisation, aligning itself at tax level with European demands. Despite playing by OECD rules now, Andorra is still a very competitive and attractive place for both companies and individuals. Moreover, its economy is constantly evolving: double taxation treaties have already been signed with Spain, Portugal, France and Luxembourg, and negotiations are underway with other countries.
The Principality is also negotiating a partnership contract with the European Union. This does not mean that it will join the Community, but that Andorra will have several advantages such as the free circulation of goods, or even promote the exchange of students and workers. It would thus become a full member of the Schengen Area. All these developments will have a positive impact on Andorra as a country receiving foreign investment.
Carrer Santa Anna 14
AD700 Escaldes-Engordany
Principat d'Andorra
Telf: (+376) 872 222
retreats@sir.ad