Andorra: The Requirements for Establishing Self-Employed Active Residency
Why Establish Your Self-Employed Active Residency in Andorra
The most important question of all.
Why, among all the options available, choose to establish your active residency in Andorra and not in any other country?
As you can imagine, most people you talk to about moving to Andorra will simply think about the economic opportunities that exist.
However, Andorra is a much more complete country, offering a great living experience, as we will tell you in this article.
Leisure and Recreation: A Variety of Options
Andorra offers much more than business opportunities, some of which are highly interesting.
It is a paradise for nature lovers and outdoor sports enthusiasts.
Honestly, we would run out of space to tell you everything that an exercise and active lifestyle enthusiast can do here.
Nevertheless, we will show you what is most enjoyable and what you can imagine experiencing in each corner.
- Skiing and Snowboarding: Andorra has excellent ski and snowboarding resorts with slopes for all levels. Grandvalira and Vallnord are two of the most popular resorts where you can glide down snowy mountains and enjoy thrilling descents.
- Hiking and Mountaineering: Andorra's mountainous geography offers a wide variety of trails and routes to explore. From gentle walks to challenging ascents, you can discover breathtaking landscapes and enjoy the tranquility of nature.
- Mountain Biking: If you are a cycling enthusiast, Andorra is the perfect place for you. Its mountain trails and routes offer exciting challenges and beautiful panoramic views. Additionally, the country hosts international mountain bike competitions, demonstrating its commitment to this sport.
- Shopping and Entertainment: Andorra is known as a shopping paradise, with a wide variety of tax-free shops and shopping centers. You can enjoy a day of shopping, visit restaurants, and relax in the numerous spas and wellness centers found in the country.
- Festivals and Cultural Events: Throughout the year, Andorra organizes various festivals and cultural events that reflect its rich history and traditions. You can enjoy concerts, exhibitions, fairs, and other activities that will immerse you in Andorran culture.
The Andorran Tax Regime
Being a resident in Andorra has tax advantages.
This is well known. But what does this tax regime really entail?
Reduced VAT (IGI)
Andorra stands out for having one of the lowest VAT rates in Europe, at just 4.5%.
This low tax burden creates a favorable environment for the development of economic and commercial activities.
The Andorran tax system offers very interesting tax reductions in specific sectors.
For example, taxes that do not exceed 1% are applied to goods and services related to healthcare or education, promoting access to essential services and ensuring the well-being of the population.
Corporate tax in Andorra has a maximum limit of 10%, making it one of the lowest in Europe (below, for example, Ireland's tax rate).
In this way, it promotes the development of small and medium-sized businesses.
In addition to corporate tax, companies in Andorra must comply with a government tax ranging from €200 to €800 per year.
This contribution helps finance the services and infrastructure that benefit established businesses in the country.
Thus, in a controlled manner, everyone contributes to the country's progress and the well-being of its citizens.
Agreements between Andorra and other countries, such as the agreement with France and Spain, prevent double taxation of tax obligations.
This means that companies can pay taxes solely in the territory of Andorra, if applicable, simplifying tax management and providing legal security to international businesses.
Contributions to social security
Contributions to social security in Andorra have a slightly lower cost compared to other countries in the area.
This allows entrepreneurs and workers to enjoy adequate social protection without representing an excessive burden on their finances.
Property and inheritance taxes
Andorran taxation does not include property taxes or inheritance taxes.
This freedom in terms of property taxes allows self-employed residents to manage their assets and inheritance flexibly and without additional burdens.
Having seen these advantages and benefits, it is time to discuss the requirements and conditions you need to follow to establish your active self-employed residence.
Requirements for establishing your active self-employed residence
Establishing your active self-employed residence in Andorra is quite simple, but it is important that you know the necessary requirements to do so, to avoid common problems.
Participation and administration of the company
To establish your business in Andorra, you are required to own more than 34% of the company and act as its administrator.
It is necessary to demonstrate that you do not have a criminal record to establish your active residence in Andorra.
This is done by presenting a valid criminal record certificate.
Fiscal domicile in Andorra
You must establish your fiscal domicile in Andorra.
This means that you must officially register your residence as your place of economic activity and comply with the corresponding tax obligations.
Minimum stay of 183 days
To maintain your active residence in Andorra, you are required to spend at least 183 days per year in the Principality. This ensures your commitment and presence in the country.
Contributions to Andorran Social Security (CASS)
As an active self-employed resident, you must contribute to Andorran Social Security (CASS). This will provide you with access to health and social security services in the country.
A financial deposit of €50,000 is required by the Financial Regulatory Authority (AFA). This deposit serves as a guarantee and will be refunded once you decide to cease residing in the country.
If you need assistance or have any questions regarding the establishment of this active residence, please contact us through the contact form.