How to Move to Andorra: A Complete Guide

Andorra, known for its low taxes, stunning landscapes, and high quality of life, is becoming an increasingly popular destination for entrepreneurs, digital nomads, retirees, and those seeking to optimize their lifestyle. If you’re thinking of moving to Andorra, here’s a clear step-by-step guide to help you navigate the process, as well as how Axior Global can assist with tax advisement and residency registration.

Steps to Move to Andorra

1. Choose the Right Residency Type:
   • Active Residency: For those planning to work or run a business in Andorra.
   • Passive Residency: For retirees or individuals with substantial passive income.
2. Meet the Financial Requirements:
   • For Active Residency: You must provide evidence of employment or income from an Andorran company or a business you operate.
   • For Passive Residency: You must demonstrate sufficient financial means to support yourself without working. This includes a deposit of €600,000 in Andorran assets (real estate, bonds, or other investments).
3. Complete the Residency Application: Prepare and submit the following documents:
   • Valid Passport or ID.
   • Proof of Financial Means: Bank statements, income proof, or a business plan.
   • Health Insurance: Andorra requires health coverage through the Andorran social security system (CASS) or a private insurer.
   • Criminal Background Check: From both Andorra and your home country.
   • Proof of Accommodation: Either a property purchase or lease agreement in Andorra.
4. Register Your Residence and Open a Bank Account:
   • After approval, register with the local authorities to obtain your residency card.
   • Open a local Andorran bank account to handle financial and residency procedures.
5. Obtain Social Security and Health Coverage: All residents in Andorra are required to register with the Caisse Andorrane de Sécurité Sociale (CASS) for healthcare and pension contributions, or alternatively choose private insurance.

Tax Obligations for Residents of Andorra

Once you’ve established residency in Andorra, you’ll need to understand your tax obligations. Andorra is known for its attractive tax regime, including:

• Personal Income Tax: the maximum tax rate is just 10% on personal income, significantly lower than in most European countries.
• Corporate Tax: the corporate tax rate is also 10%, with certain exemptions for international businesses.
• Wealth Tax: there is no wealth tax in Andorra, making it highly appealing for wealth preservation.
• Capital Gains Tax:
  • Real Estate Sales: progressive taxation system:
    • 15% if sold within 1 year
    • Decreasing progressively until 0% after 10 years

• • Other Investments: subject to a 10% capital gains tax, unless exemptions apply
• VAT: the standard VAT rate is 4.5%, one of the lowest in Europe.

Upcoming Legislative Changes (Effective March 2025)

• Adjusted Capital Gains Tax for Real Estate: The tax for properties sold within 10 years will start at 15% in the first year and progressively decrease to 0% after 10 years.
• New Residency Transparency Requirements: More stringent financial checks for passive residency applicants.
• VAT Adjustment for New Developments: IGI for new property developments may rise to 5%.

How Axior Global Can Help

• Residency Application Assistance: Whether you are applying for active or passive residency, we will guide you through the process, ensuring you meet all the legal and financial requirements.
• Tax Strategy and Planning: We help optimize your tax situation by advising on Andorra’s favorable tax regime, including personal income tax, corporate tax, VAT, and more.
• Business Setup: If you are moving to Andorra for business, we can help with company registration, tax compliance, and setting up the right legal structure for your operations.
• Social Security and Health Coverage: We ensure that you meet the requirements for social security and healthcare in Andorra, helping you stay compliant with local laws.

Conclusion

Moving to Andorra offers many advantages, from a low-tax environment to a high quality of life. By following the appropriate steps for residency and working with a trusted advisor like Axior Global, you can seamlessly transition to life in Andorra, while ensuring full compliance with local tax laws. For more detailed advice and personalized assistance, feel free to contact Axior Global and let us help you navigate the process of moving to Andorra with ease.