How to Register as a Self-employed individual (Autónomo) in Andorra: A Step-by-Step Guide

Becoming a freelancer in Andorra (locally known as an autónomo) is an attractive option for many entrepreneurs, professionals, and digital nomads. The Andorran tax system is known for being favorable, with low income taxes, no wealth taxes, and a business-friendly environment. However, freelancers must still comply with certain registration and tax obligations.

Steps to Register as Self-employed (Autónomo) in Andorra

To start working as an autónomo in Andorra, follow these steps:

1. Obtain Residency Status:
   • Residency: In order to be considered a freelancer in Andorra, you need to be a tax resident. This typically means spending at least 183 days per year in the country.
   • Visa or Residency Permit: Depending on your nationality, you may need to apply for a residency visa, whether active (for working) or passive (for retirees or those with sufficient income).
2. Register with the Andorran Social Security System (CASS):
   • As a freelancer, you must register with Caisse Andorrane de Sécurité Sociale (CASS) to pay for healthcare and pension contributions. This is mandatory for all self-employed individuals in Andorra.
   • The rate for freelancers is typically 22.5% of your net income. This includes healthcare and pension contributions.
3. Register with the Andorran Tax Authorities (AGIA):
   • You will need to register your business activity with AGIA (Andorran Tax Administration) to get a Tax Identification Number (NRT).
   • VAT Registration: If your annual turnover exceeds €40,000, you must register for VAT (IVA in Andorra) at a rate of 4.5%.
4. Opening a Business Bank Account:
   • You will need to open a corporate bank account in Andorra, separate from your personal bank account. This will be used to handle your business finances and payments.
5. Choose Your Taxation Regime:
   • Andorra offers two main taxation regimes for freelancers:
     1. Simplified Regime (Régimen Simplificado): For individuals with an annual income of up to €40,000.
     2. General Regime: For individuals whose income exceeds €40,000.

Taxes Self-employed individuals Must Pay in Andorra

As a freelancer in Andorra, you will need to comply with several tax obligations, including:

Breakdown of Taxes for Self-employed individuals

• Income Tax (IRPF): The personal income tax in Andorra is progressive but very low, with rates ranging from 0% to 10% depending on income.
• Social Security: Freelancers contribute 22.5% of their net income to the CASS system, which covers healthcare, pensions, and other social security benefits.
• VAT (IVA): The standard VAT rate in Andorra is 4.5%, one of the lowest in Europe. Freelancers must charge this VAT to clients and remit it to the Andorran tax authorities if their annual revenue exceeds €40,000.

How Axior Global Can Help with Freelancer Registration and Tax Advisement

Navigating the registration process and tax obligations in Andorra can be complex, especially for those unfamiliar with the country’s legal system. Here’s how Axior Global can help:

• Freelancer Registration: Axior Global can assist you with setting up as an autónomo in Andorra, ensuring you complete all the necessary registrations with CASS, AGIA, and local banks.
• Tax Planning and Optimization: Axior Global can help you determine the best tax regime for your freelance business, ensuring that you are registered correctly for income tax, social security contributions, and VAT. We can advise you on ways to minimize tax liabilities while staying compliant with Andorran laws.
• Social Security Contributions: Understanding how CASS contributions work and ensuring you are paying the correct amount is crucial. Axior Global can guide you through the social security system, helping you optimize contributions to maximize pension and healthcare benefits.
• VAT Compliance: If you expect your income to exceed the €40,000 VAT threshold, Axior Global can assist you in registering for VAT, submitting your periodic returns, and ensuring you remain compliant with Andorran VAT regulations.
• Ongoing Tax Filing: Axior Global can handle your annual tax filings, ensuring that your income tax and social security filings are accurate and submitted on time. We also provide ongoing support throughout the year to ensure you remain compliant.

Conclusion

Becoming a freelancer (autónomo) in Andorra is a straightforward process with low tax rates and favorable business conditions. By following the necessary steps for residency, social security registration, and tax registration, freelancers can take advantage of Andorra’s tax-friendly environment. With the support of Axior Global, you can ensure that your freelance business is properly set up and optimized for tax savings. Our experts provide comprehensive tax advisement and registration services, so you can focus on growing your business with peace of mind, knowing that your compliance is in expert hands.