Tax considerations for residing or investing in Andorra - PSF Consultoría empresarial

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Tax considerations for residing or investing in Andorra

We recieve many requests for information that ask us to do things that would be fiscally problematic. In Andorra there are few taxes, but many times people fail to consider that they come from a country with its own tax systems which must be respected, more if that country is within the European Union.

No matter how much you want to set up a company in Andorra, Ireland, Luxembourg or anywhere, this society will need to have in itself a reason to exist. A foreign company that is used as a vehicle for the mere raising of rents without having any activity is prohibited. In fact, this type of operation is banned throughout all the EU. So how to take advantage of Andorra at the tax level? Residing or investing in it, which are the two sources of savings to take advantage of the Andorran taxes. You can invest, doing here an activity or all the logistics of it with 1 or 2 residents hired or you can come to reside in the country and do what you want. There are no more options to have complete control of the society and at the same time to save taxes. From my position, I am very contrary to throwing the skin with fiscal subjects.

All the above is so for the entire European Union and its residents, there is no turning back. Outside the EU there are a handful of legislations that allow, with limitations, to do what was once done in countries like Andorra. But within the EU, you can not, neither with Ireland, nor Luxembourg, Latvia ... It simply is not possible.

Many come from countries where the tax enforcement is slow, believe that this does not work, but if it works and is very efficient. In the end, maybe it takes 5 years, but always achieves its goal. This is true throughout Europe, with synchronized goverments and information exchange protocols. There are also integrated tax laws and top-level IT systems that do many things in an unattended way. Andorra still has a limited information exchange, but it is a matter of time that is as complete as that of Ireland or other European countries. In the end, if you want to take advantage of the low taxes, you have to reside or invest in Andorra.

Many people when I comment all this is going head-down, thinking that it is impossible to take advantage of a more favorable legislation. It is still possible, but if they are not 100% offshore legislation, residence and/or investment in a productive business is required. People coming from a world in which all this type of operations were absurdly simple sees it complex, but in Andorra we are bored to see entities that perform a real and continuous activity together with the possibility of saving taxes. In fact, many people in the end appreciates the savings that Andorra brings along with the possibility of carrying out a management from the country



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About the Author

I finished the degree in Development of Computer Applications in Alcañiz and later I entered the financial market first as a systems programmer and then as a trader. During those years I finished my DBA Degree in the UNIR and later I obtained a master in Banking, Financial Markets and Patrimonial Management by the EAE. I also took a course in Financial Adviser from the UPV.

I have done consulting for various clients in both strategic and fiscal matters. I tend to offer integral solutions and now I take care of the administration of PSF. When there is an issue that requires knowledge of markets or investment, I also assume that competition.
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