Andorra Cryptocurrency & Bitcoin
If you are interested in cryptocurrency and the Bitcoin world or having projects related to Blockchain technology, Andorra is calling you. Currently, in Andorra, you will find a large community of people dedicated to trading Bitcoin and other cryptocurrencies. In this guide, we address the current tax situation and advantages of conducting a crypto business in Andorra.
Andorra Crypto Tax
One of the main reasons why an individual engaged in the cryptocurrency sector chooses to get residency in Andorra is the tax system. The maximum rate of 10% corporate tax makes Andorra an extremely interesting location when it comes to cryptocurrencies trading fiscal optimization.
However, other reasons, such as the vision and mentality of Andorran society regarding cryptocurrencies are also important. There are several stores in the country where you can pay for your items with Bitcoin, so initial acceptance is good and points blockchain technology in the right direction.
Can Cryptocurrencies be Taxed at 0% in Andorra?
Andorra already has a favorable tax plan for cryptocurrency investors, as there is no wealth tax. At the level of personal income tax, capital gains are capped at 10%, but the Andorran government has already received comments regarding the possibility of revising the law with an exemption of crypto money.
As a country in the transformation towards an economy that is committed to technological innovation, where legislation is in favor of the development of e-Sports and digital assets, we can say that the answer to the question is yes: in Andorra, cryptocurrencies can be taxed at 0%. Undoubtedly, we will follow new legislation closely.
Law Regulating Blockchain Technology
Andorra is already working on a law regulating the legal framework of blockchain technology that will open the doors to the regulation of cryptocurrencies. There is still nothing in force that legislates this type of activities, thus the Principality could be among the first countries to have their own legislation.
As a consequence of the country’s efforts to open up internationally and attract the most innovative sectors, Andorra’s commitment to cryptocurrencies and blockchain is demonstrated in a draft law.
The cryptocurrency community in the country strives to create a crypto hub, and looking for people dedicated to or developing a specific project related to cryptocurrencies or blockchain technology.
Modification of the Law on Electronic Trust
To regulate cryptocurrencies and tokens, the law raises the possibility for the Principality to host local and international issues of digital assets. A new framework regulation of digital assets on an international scale should attract foreign investment by creating a securities market through the blockchain in Andorra.
Rumors of creating a license for companies operating with crypto assets would possibly be done in cooperation with the AFA (Andorran Financial Association). Besides, this regulation would allow banks to develop another financial activity parallel to traditional banking.
Blockchain Projects and Cryptocurrency Mining in Andorra
Blockchain projects in Andorra and mining are already a reality. Several companies engaged in mining different cryptocurrencies already decided to obtain a tax residency in Andorra. The principality is known for its focus on online transformation. Andorra’s digital nomad residency program soon will be another advantage for citizens to enjoy. Andorra is committed to technology as a way to make life easier for inhabitants. The new visa program is no exception, as it is a way to innovate and adapt to the modern way of working.
It is a fact that Bitcoin mining companies are present in the country. Industrial properties are available for rent, server and IT infrastructure can be installed in suitable conditions.
Electricity rates are lower than in neighboring countries such as Spain and France. According to official Eurostat figures, Andorra has one of the lowest electricity prices in Europe. Small principality has a price of €0.133 per kilowatt-hour (kWh), while the average in Europe is just over €0.2126 per kWh.
Apart from this, Andorra’s electricity infrastructure is extremely stable and blackouts or downtime are quite uncommon when compared to Spain, to give an example.
Finally, Andorra is one of the few countries in the world that offers a fast internet connection with 100% fiber-optic coverage and secure VPN service. These and other lifestyle factors can make Andorra a suitable destination for your digital currency/cryptocurrency project.
With blockchain activities and projects, Andorra is a country seeking to provide similar support in this vertical as Malta. Principality tries to attract entrepreneurs or already consolidated companies to develop cutting-edge technology on-site. A non-profit association called AndBlockchain is constantly pushing for crypto legislation, to obtain all possible benefits for people investing in crypto money in Andorra.
Therefore, if you have a blockchain or mining technology project, you may be interested in moving to Andorra.
Incorporate a Crypto Company in Andorra
Are you dedicated to the crypto world and thinking if you can incorporate a company in Andorra? We can help you. Being an Andorran resident helps you to invest in cryptocurrencies, such as Bitcoin, and plan income tax with one of the lowest rates in Europe.
Can I bring my crypto company to Andorra? As long as you have all the money declared and justified (as in any type of business), yes. Simply present the origin of your funds and meet a few other requirements to open a legal business in the Principality. At least two out of five Andorran banks are ready to accept clients related to this sector.
Andorra Residency Rules
To open a company in Andorra and acquire an active residency permit, you will need to fulfill the following requirements:
- Live in the country for more than 183 days.
- Own more than 21% of the share capital of an Andorran company
- Be a part of the administrative body of an Andorran company
- Deposit of €15,000 to the AFA (Andorran Financial Authority)
Investing in Cryptocurrencies such as Bitcoins from Andorra
If you are a trader investing in digital currencies, you can continue trading while being a resident in Andorra. Residency in Andorra is an attractive option for various profiles and lifestyles. There are options available to get a passive residency for international traders.
As a resident in Andorra, you are fully subject to income tax on your worldwide income. However, you may qualify for tax exemptions including 0% capital gains from publicly traded shares under certain conditions. We recommend an initial analysis of your business activities, types of investments to properly assess potential tax implications in Andorra.
Ultimately, your residence must be properly maintained under international tax treaty rules, and the definition of a tax residence in Andorra for neighboring countries is quite clear.