Andorra is a small country located in the Pyrenees and which, since the end of World War II, has been characterized by its economic dynamism, thanks to its advantageous taxation.

Why invest in Andorra

Andorra is a country that has good road infrastructure with the rest of the continent, a dynamic and growing economy and a skilled workforce. During the 1950s, it went from being an isolated and poor country to one of the richest states on the planet.

The form of government is the Parliamentary Coprincipate, since the promulgation of the 1993 Constitution and the successive governments have been characterized by prudence, introducing moderate fiscal reforms and prioritizing private economic activity as the engine of the country’s economic development.

First of all, it is important to say that Andorra is not considered a tax haven since February 2011, when double taxation agreements entered into force with Spain but, even so, taxation in Andorra is very attractive in most taxes with Regarding your neighbors.

Second, although Andorra is not a member of the European Union, it does maintain a customs union agreement, so the products do not have to pay tariffs (except for agricultural ones), and the legal tender in the country is the euro.

Finally, it should be noted that, together with fiscal reforms, Andorra opened the doors wide for foreign investment.

Taxes in Andorra

Invest in Andorra
Invest in Andorra: country advantages and most common taxes.

The most important taxes in Andorra are the IGI, the Corporate Tax, the IRPF, the IRNR that stand out for having a much lower average rates than those of Spain and France.

Taxation in Andorra is one of its main values, both to acquire items and to sell them or establish a company and, of course, in the case of wanting to reside in this small country in the Pyrenees.

Indirect General Tax (IGI)

The Andorran equivalent of Value Added Tax (VAT) is the Indirect General Tax (Impost General Indirecte – IGI), with a tax rate of 4.5% for regular consumer items, and there is a reduced rate of 1% and a super reduced rate of 0%.

In comparison, just remember that the general VAT rate is 21% in Spain and 20% in France.

Corporation Tax (Impost de Societats – IS)

The investment possibilities in Andorra are very interesting for those who want to establish a company. A company in Andorra is governed by the Impost de Societats, which is taxed at 10%, a really low rate compared to 25% in Spain and 33.3% in France. 

Business structures such as the Holding are taxed at 0%.

To create a society in Andorra, it is no longer necessary for an Andorran citizen to have 49% of the capital, as in the past. Today it is possible for non-residents to establish mercantile companies in the country with guarantees for investors, with prior authorization from the government.

Personal Income Tax (IRPF)

The Personal Income Tax (Impost sobre la Renda de les Persones Físiques – IRPF) of Andorra differs from that which applies in Spain or France in that it is not progressive, since it has a general rate of 10% for the income of more than 24,000 euros.

In comparison, marginal rates in Spain range between the exemption for the lowest income and 45%, similar to those in France.

 Non resident Income Tax (IRNR)

TheNon resident Income Tax  (Impost sobre la Renda dels No-Residents – IRNR) is a tax that the Government of Andorra has implemented in the framework of fiscal harmonization measures with its closest environment. It records the services or yields obtained by non-residents in the Pyrenean country with 10% of the total value; conferences, housing rentals, temporary jobs or pensions are included.

However, it is important to highlight that the dividends received from a company based in Andorra, the international sale of goods and interests of movable capital, are exempt from the IRNR, and therefore continue to offer interesting comparative advantages with respect to tax figures in Spain or France. It should not be forgotten that dividends, in Spain, are subject to a 19% withholding tax.

Other taxes

Finally, it should be noted that in Andorra there are other taxes that include the contracting of insurance, hydrocarbons, asset transfers, gambling and capital gains from current accounts, among others. These tax figures are similar to those in force in Spain and France.

Establish a business in Andorra

To create a company in Andorra, only minimum capital and government authorization are required in the case of being a foreigner. The two types of mercantile companies that can be created are the Societat Limitada (SL) and the Societat Anònima (SA), with minimum capital of 3,000 and 60,000 euros, respectively, similar to those needed in Spain; there is also the figure of the sole proprietorship.

This type of investment in Andorra requires a physical registered office in the country and an Administrator. Today, it is possible to have 100% of the capital being a foreigner, but if you are going to have more than 10%, you will have to apply for a government authorization. In any case, it should be noted that, in recent years, the Government of Andorra is especially interested in promoting foreign investment, and the procedures have accelerated.

In Plus Serveis i Família we are mainly dedicated to advise and manage everything necessary so that it can be established in this country.

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The health system in Andorra tops all quality rankings that have been developed worldwide for more than 25 years.

One more of the worries that surround the head of the person who changes countries, is the health system. How does it work? Will it be more expensive or cheaper? Under what conditions and what options are available?

We will try as always, to give all the most important information: how it works, how it is organized, what services are available.

Operation of the health system

The health system in Andorra, called Caixa Andorrana de Seguretat Social (CASS), is based on the copayment. Which gives the patient the freedom to choose the medical professional they want. It also has a higher subsidy for dental treatments than neighboring countries.

The low mass of the country, a high income per capita and the large participation of workers who contribute to social security, make the CASS a very efficient system and one of the main attractions of living in Andorra. On the other hand, due to the small number of inhabitants of Andorra there are specialties to which there is no access in the country itself. For this reason, CASS has established agreements with social security services in Spain and France.

How does the copayment work if you want to reside in Andorra?

The health system in Andorra gives you a percentage of the expense derived from the previously established treatment:

  • CASS returns 75% of the expenses derived from consulting specialists or medications.
  • The percentage of return increases to 90% when the expenses correspond to hospital admissions or surgeries.

CASS also deals with financing 100% of the treatment for those who demonstrate that they cannot cope with the debt, such as people without resources or in situations of social exclusion.

Initially, all expenses are paid by the patient at 100%. After a few hours or a few days, the health system in Andorra is responsible for the return of the percentage financed by the co-payment. There are also private insurances that can be contracted to cover the remaining percentage that corresponds to the user.

The referring physician

The referring physician
The referring physician initiative, has recently been launched to improve access and coordination of medical care.

A new initiative has recently been launched to improve access and coordination of medical care. The user can currently choose a family doctor or pediatrician as a Referring Physician.

This offers more personalized health care, and monitors health status over time. It guides the health system and coordinates with the different health professionals who treat the patient. In addition, in this case, it is not necessary to pay the total value of the consultation. Only the part that corresponds to the user is paid, that is, 25% of the established rate.

The Hospital and Health Centers

The health network in Andorra consists of:

  • a main state hospital with 200 beds (Nostra Senyora de Meritxell Hospital). 
  • various Primary Care Centers (CAP), distributed by all parishes in the country that provide different services: preventive care, immunizations, first aid, prenatal and child care, family planning and general counseling.

If you are interested in coming to Europe, the Principality of Andorra offers you unbeatable conditions. In a unique geographical location, where pure air, hot springs, lakes and mountains coexist. 

In Plus Serveis and Familia we have experience in helping foreigners to settle in the Principality. Whether a person with a public projection who wishes to take a leisurely walk, a small businessman in search of greater profitability or an extra-community citizen with the intention of entering our continent, we have the right solution for each one. 

We are the Plus you need, we have the Services you need, we receive you as a Family.

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We explain in detail the educational structure that makes Andorra a unique country

If you are thinking about changing countries with your family, this is an important issue. Where will my children study? In what language? What possibilities and opportunities will they have?

We can say that the school offer in Andorra is varied and very complete. But to understand the educational system it is necessary to know a little about its history. We will explain all the options and various information of interest to consider.

The different educational systems that exist in Andorra

The coexistence of different educational systems has gained considerable complexity in recent decades.

Andorra is located in the Pyrenees, between France and Spain. In its history, we go back to the thirteenth century where it began to be a co-principality among neighboring countries. Currently, it is a co-principal parliamentarian, and for this reason we can find three educational systems in the country: Andorran, French and Spanish.

The history and evolution of the education system in Andorra.

A small historical analysis explains the essential features of this educational system. In 1882 the first congregational schools were established in some towns. In 1900 the first French schools were opened and 30 years later, the first Spanish schools. Until 1968, the three main congregational schools (Spanish system) that still exist in the country were also opened: Sagrada Família, Sant Ermengol and Mare Janer.

In 1972, the need to preserve the identity and peculiarities of the country in its education was detected. So, an Andorran Training Program is launched in foreign education systems. By teaching the Catalan language and the history, geography and institutions of Andorra. Ten years later the government finally created its own educational system, the Escola Andorrana. 

Since then, the offer has been complemented with:

  • professional training,
  • special education,
  • training for adults and 
  • higher education.

The school offer currently

We can say that the school offer is wide and you can choose among several options.

You can take the entire school stage considered mandatory in any of the three systems:

To complete the school offer privately, thewas recently installed British College of Andorra.

Additional information:

  • Schooling is compulsory from 6 to 16 years.
  • However there is the preschool grade, from 3 to 6 years old (exceptionally in Andorra they accept children with 2.5 years)
  • With the exception of private centers, all educational systems are free.
  • There is school transportation provided by the government of Andorra
  • Being a snow country, skiing is a compulsory activity for all students in all educational systems https: //www.educacio .ad / ski-school

Choosing the best educational option for your children can be a difficult decision. And more if a change of country is added. We can say that the options in Andorra are varied and allow for opening many opportunities, since they can opt for university studies both in Andorra, as well in France and Spain.

The new contribution bases are already in force. 

We are already in October, a month since the new contribution scheme has been launched. The biggest difference of this regime in relation to the previous one, are the quotation tranches. They went from being 4 (25%, 50%, 75% or 100%) to 7 (25%, 50%, 62.5%, 75%, 100%, 125%, 137.5%). The calculation to determine the corresponding tranche is made taking into account two factors: 

  • depending on income
  • based on the average salary of the sector.

You may refer to get more details and view all the information here:

And now how does it work? Has the declaration process changed?

This new regime implies that all the insured persons will have to review their situation before asking for the corresponding contribution:

  • During the month of January, an ordinary declaration can be made asking for the percentage that you think is to be quoted.
  • The rest of the year, a single extraordinary declaration can be made, to regularize the contributions until July 31. If this date is passed, it will generate surcharges.
  • Every month, from the 10th to the 15th, the contributions are paid by means of a charge made to the bank account communicated to the CASS.
  • Once the economic data has been received from the Department of Taxes and Borders, CASS can modify the amount of the contribution.
  • This modification will take effect from January 1 of the current year. If the price had to be higher, it generates surcharges and interest in the months declared before the review.

Electronic Certificate. What is it and how it works?

To make the declaration, the National Electronic Government Certificate must be used. This allows self-employed workers to manage the contribution base statement, immediately without having to do it in person.

The electronic certificate is an electronic identification, which serves to authenticate and sign documents. It is as if a printed document was signed.

The electronic certificate allows the electronic signature of documents: the recipient of an electronically signed document can be assured that it is the original and has not been tampered with, and the author of the electronic signature cannot deny authorship of the signature.

We mention some points to consider:

  • Self-employed workers are required to contribute from the beginning until the end of economic activity. 
  • For new companies, the obligation to contribute is counted from 30 calendar days after the registration in the Companies Registry is made.
  • Contribution bases equal to or greater than 100%: it is mandatory to quote and therefore the corresponding declaration must be made.
  • Quotation bases below 100%: they are optional. The interested person can request it, provided that the requirements of the net income and the turnover of the previous fiscal year are met.
  • For those who already have a reduced fee that has been granted before the law enters into force, it is maintained until the expiration date. From that moment on, a new declaration corresponding to the new contribution base must be made.
Plus Serveis i Família

As you can see, in Plus Serveis i Família we have done our “homework” and we are still on top of these changes. For any information or doubts do not hesitate to contact us.