Labor costs and immigration in Andorra la Vella - PSF Consultoría empresarial

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Labor costs and immigration in Andorra la Vella

One of the things that we see that is most overlooked in order to value an investment in the country, is the lowest labor cost tax. Social security has lower costs for the company and this allows significant savings over time. On the other hand, immigration regulation hampers free recruitment and is a major problem for many companies. This complex subject is the one that I will try to clarify in the article of today.

First, social security costs, 15.5% for the company, compared to 23.6% Spanish (without considering the number of special cases, exemptions and regulations that has the extensive Spanish legislation). It is a significantly lower cost, which allows some savings, but with the total cost (worker + company) is 22% compared to 28.3 Spanish, the savings are not as huge as they were in the past. However, the savings are certainly notorious, a 6.3% difference.

Then, with an employee who has a salary of € 1000 (almost the minimum wage in Andorra), the differences in total contributions to Spain would be € 63 month, € 756 / year savings. This counting as it is almost the minimum that can be paid, is certainly a significant saving.

Now is where the problems come, the immigration legislation. Hiring someone is always complicated, because of all the legal requirements (many are also here), but usually not so much documentation is required for people coming from abroad and the number of foreign workers is minimal. Andorra is a very small country and certain specialties are very complicated to find, currently the CEA usually talk about a deficit of 600 workers. Therefore, the country is currently missing a lot of employees. This is a pretty serious problem and every time you have to hire someone you will start shaking. In addition, if you find someone outside you will have to incorporate respecting some legal deadlines that can easily get to two weeks and the need to pay a fee of about 200 €. So, beware of this last point.

In conclusion, there are savings in contracting, but on the other hand certain processes can be quite complicated. Fortunately, many procedures are already being simplified, and in less time than we expect, migration processes will be easier than ever.


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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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