Discover the key elements to make an informed decision

Reading time: 10 minutes

🏁 Introduction

Choosing Andorra is not just about taxes: it’s about legal security, how you operate your business every day, and ensuring your structure makes sense — today and five years from now.
Here you’ll find the right questions — and the truly decisive elements — to make a well-founded decision.

🪪 What it really means to be a tax resident

In general terms, where you live and where you pay taxes: tax residence is determined by objective criteria (effective time spent in the country, main home, centre of economic and personal interests).
The answer is not always obvious — and sometimes even counterintuitive.

🗺️ Double taxation and “residency conflicts”

If you maintain strong ties with your country of origin or another country (family, available housing, business activity), you may still be considered a tax resident there under its tax authority’s view.
The existence of double taxation treaties completely changes the paradigm.

➤ You can learn more about Double Taxation Agreements and their practical application here.

❗What it means in practice

Changing your tax residence requires planning and real substance — life, business, and documentation all aligned.
A formal move without real changes is the shortest path to a problem, even if it’s not necessary to cut all ties with your country of origin.

👉 Recommendation: request an initial tax diagnosis — we’ll help you assess whether you meet the requirements and what risks might exist.

➤ If you wish to explore this further, you can read Tax residence in Andorra: what it really means and how to prove it.

💰 Taxation in Andorra in three pillars

Individuals

A competitive personal income tax framework with moderate brackets and clear rules.
The effective rate never exceeds 10%.
Many types of income are either exempt or not subject to tax.

Companies

An attractive general rate and a pro-business environment (lighter regulatory burden than in neighbouring countries).
The effective tax rate also never reaches 10%.
Moreover, dividends from Andorran companies are exempt for shareholders.

➤ If you are considering creating or relocating your company to Andorra, you can read Incorporating a company in Andorra: steps, requirements and advantages, where we explain how to structure it properly, the usual timelines, and the real tax benefits.

Consumption (VAT/IGI)

A simple and predictable indirect tax system (IGI) with a low general rate of 4.5%.

👉 The goal is not to “pay less just because”, but to pay efficiently because your structure is sound — that’s the difference between optimising and risking.

👉 Recommendation: explore our range of services (company formation, international taxation, compliance, banking, and permits). We’re here to answer any questions you may have.

➤ For a complete overview of the Andorran tax system and its real advantages, read Taxation in Andorra: structure, rates and real benefits.

🏅 Who can benefit from considering Andorra as a place of residence

Profiles for which Andorra tends to fit particularly well:

• Entrepreneurs in any sector, investors, and asset holders with a medium- to long-term vision.
• Digital entrepreneurs and location-independent businesses (e-commerce, software, info-products, affiliate models).
• Content creators and remote professionals with international clients.
• Companies with international scope that value tax efficiency and regulatory stability.
• High-level athletes without a fixed base of operations — more common in individual sports than in team ones.
• Freelancers or self-employed professionals who don’t require physical presence or already contribute as independents.
• High-net-worth individuals aiming to protect and optimise their wealth.
  Andorra is also a useful jurisdiction for proper succession planning.

🧭 Requirements, timelines and roadmap

• Corporate or personal structure (depending on each case).
  Each option has its own requirements and timelines that may vary significantly.
• Local banking: opening an account requires strong compliance (source of funds, business model, client profile, suitability).
• Permits and CASS registration: sequence and order matter (avoid duplications and delays).
• Timeline: planning in phases reduces friction and costs.

👉 What delays the process is not “Andorra”, but arriving without paperwork, without a clear business story, and without a plan.

🚫 Common (and costly) mistakes

• “Moving” without substance — continuing to live or operate outside Andorra as before the move.
• Empty companies or those inconsistent with your real situation.
• Ignoring obligations in your country of origin (poorly managed exit, real estate assets, payrolls, etc.).
• Banking: underestimating KYC/AML and showing up without a proper file. Local banks are few, which limits options.
• Choosing only by price — cheap advice often turns out expensive. Selecting without verifying real expertise opens the door to penalties and rebuilding everything from scratch.

⚙️ Responsible optimisation

• Salary vs. dividends and logical remuneration for the shareholder-manager.
• International structuring (income, royalties, holdings… only when they bring real value).
• Transfer pricing: properly document and justify transactions between related parties or entities to avoid penalties and disputes.
• Real activity and effective management seat: ensure the company genuinely operates from Andorra (or other relevant jurisdictions) with substance, means, and strategic decisions made locally.
• Documentation: contracts, invoicing, and payment flows consistent with your actual operations.
• Evolution: what is optimal today may require adjustments as your business grows or your needs change.

🏔️ Living and operating in Andorra: the practical side

Stability

A solid political and legal environment with stable, predictable regulations.

International proximity

Just two hours from Barcelona and Toulouse, with international airports offering all major connections and logistics options.

Network of double taxation agreements

Andorra already has more than 15 DTAs signed and in force, with several more under negotiation, facilitating fiscal coordination with other countries and enhancing international legal certainty.

Total connectivity

100% of the territory is covered by fibre-optic internet, ensuring fast and stable connections even in mountain areas.

Liberal environment

A country that supports private initiative, with an open economy and business-friendly policies.

Quality of life

Safety, nature, and a multilingual environment (ES/FR/EN/CAT) that facilitates both personal life and business relationships.

➤ To better understand what it means to settle and develop your activity in Andorra, read Living and working in Andorra: what you need to know before moving, where we explain residence requirements, quality of life, and the main advantages of living in the Principality.

✅ Quick decision checklist

• Minimum residence: can you meet the required days and conditions to qualify as a tax resident in Andorra for your case?
• Exit plan: have you managed all necessary steps in your home country to stop being tax resident there (assets, salaries, properties, pending filings)?
• Banking needs: what do you really need (accounts, currencies, payment gateways like Stripe, PayPal, etc.) and in which countries do you operate?
• Clear roadmap: do you have a phased plan for relocation, residence, company setup, and tax compliance?
• Operational questions: do you know how your day-to-day life will work in Andorra (healthcare, social security, procedures, etc.)?
• Specific information: do you understand the country’s key aspects (languages, regulations, international treaties, business environment)?

👉 If you can’t confidently answer several of these points, the best way to start is with an Orientation Session, where we analyse your fit, risks, and next steps.

❓ FREQUENTLY ASKED QUESTIONS (FAQ'S)

♦️ Will the tax authorities pursue me if I move to Andorra❓

No — tax authorities do not chase people for moving abroad. However, if the process is poorly handled or obligations are neglected in your home country, additional information requests may arise.
The key is to prepare an orderly exit with solid and consistent documentation.

♦️ Can I keep working for European or foreign companies from Andorra❓

Yes, you can continue providing services to international clients.
The only risk arises if the relationship is not properly formalised (contracts, invoicing, withholdings). With the right structure, it’s entirely viable and common.

♦️ Am I fulfilling all my tax obligations outside Andorra❓

Even after relocating your tax residence, you may still need to file declarations in your home country (for real estate, income, or wealth).
Reviewing these obligations beforehand prevents penalties and double taxation — and improves optimisation.

♦️ How should I manage the move? Which residence permit suits me best❓

It depends on your activity and goals.
There are self-employed, employed, and passive (investment-based) residence permits. Each has distinct requirements and benefits.

➤ You can find answers to your questions in the article Types of residence in Andorra: active, passive and tax.

♦️ Do I need to move both my company and my personal residence❓

The greater the disconnection from your home country, the greater the fiscal benefit — though it’s not always necessary to relocate personally.
You can also design a gradual strategy depending on your case.

♦️ How does healthcare and social security work in Andorra (CASS)❓

All residents must register with CASS, which covers healthcare and social contributions.
Coverage is broad and can be complemented with private insurance.
There are agreements between the Andorran, Spanish, and French social security systems.

➤ You can learn more in The CASS in Andorra: contributions, coverage and key facts.

♦️ What is the most suitable tax and corporate structure for me❓

There is no universal model.
Depending on income, assets, and objectives, it may make sense to operate as an individual, set up a company, or hold through a parent structure.
The key is to analyse your specific situation.

♦️ Do I need to renounce my nationality or previous residence❓

No. Your nationality remains unchanged.
What is necessary — or strongly advisable — is to cease being tax resident in your country of origin.
To avoid double taxation, Andorra has signed more than 15 international tax treaties (DTAs).

♦️ What taxes will I actually pay in Andorra❓

Maximum rates are: personal income tax below 10%, corporate tax 10%, and IGI (VAT) 4.5%.
Effective rates are often lower thanks to deductions and reduced brackets.

➤ For further details, read Taxation in Andorra: structure, tax rates and real advantages.

♦️ What happens with my properties or investments abroad❓

They may remain taxable in the country where they are located, especially if not properly planned.
Considering local rules and tax treaties avoids surprises and reduces the overall burden.

♦️ How long does the full process take❓

It depends on the type of residence and your objectives: from just two weeks (if everything is ready) to four or five months, or more if documents are missing.

♦️ Is real activity in Andorra mandatory❓

It depends.
If you establish a company, it must have coherence and real substance in the country (resources, operations, management).
The required level of presence depends on the case.
The important thing is to plan it correctly from the start.

➤ If you want to understand the criteria applied to companies, we recommend reading Place of effective management: key to determining a company’s tax residency.

♦️ Is it easy to open a bank account❓

For residents or those with clear interests in the country (companies, real estate), it’s simpler.
For non-residents, it’s more complex.
In all cases, what matters is knowing what information to share, and when.

♦️ What about payment gateways like Stripe or PayPal❓

Not all work directly from Andorra.
However, equivalent solutions exist (Adyen, Worldline, banks with international merchant services) that allow you to operate seamlessly.

♦️ Is Andorra a safe and stable country to live in❓

Yes. Andorra is considered one of the safest countries in the world, both physically and legally.
It also offers stable regulation and full fibre-optic coverage nationwide.

➤ See Living and working in Andorra: what to know before moving to be fully prepared.

♦️ Can I operate financially with other countries from Andorra❓

Yes, as long as they are not sanctioned or high-risk countries under FATF rules.
With the rest of the world, banking and payment operations are smooth and secure.

IN SUMMARY

Andorra offers competitive taxation, safety, and regulatory stability — but the real value lies in doing it with structure and sound judgement.
It’s not about “paying less”, but about planning well: real tax residence, optimised taxation, and a prepared banking strategy.
With the right guidance, relocation stops being a risk and becomes an opportunity.

👉 For more information, explore the rest of our Publications section.
Alternatively, if you wish to discuss your personal situation, you can book a meeting below or fill out the contact form.

Last revision date: November 2025