Moving to Andorra
Moving to Andorra is a particularly interesting solution to study. Andorra tax residency is currently one of the most attractive options in Europe. How to move to Andorra? Can you form a company in Andorra? How to get a job in Andorra? How long does it take to settle in Andorra? In this guide, we describe the main ways of moving and setting up in Andorra.
How to move to Andorra?
- Set up a company (active residency)
- As a passive resident
- As an employee
Move to Andorra and Set up a Company
What are the requirements you have to meet to set up a company in Andorra? How much money do you have to move and invest in Andorra?
To relocate to Andorra as an entrepreneur you need to incorporate an Andorran limited liability company (SL), with a minimum share capital of €3,000. This amount is a contribution to constitute the company are is non-refundable, however, you begin operations with that capital.
It is necessary to set up your Andorran company in the legal form of a Limited Liability Company, although there are certain exceptions, for example, if you are a computer engineer. Notary charges in total about €1,800 for incorporating the Andorran company.
How should you contribute €3,000 to constitute the Andorran company? Open a bank account in Andorra and deposit the required amount.
Deposit €15,000 to AFA
Once the Andorran company is constituted, you are required to provide a deposit of €15,000 to Autoritat Financera Andorrana as a security bond for being the administrator of the company. To be able to move to Andorra, you must have at least, 20% of the capital of an Andorran company and become the director.
€15,000 will be recovered from Autoritat Financera Andorrana if you ever decide to leave the country.
Process of Company Incorporation
The company formation process carries out several more formalities such as: registering with the Tax Office, with the Andorran Social Security (CASS), and in the Commercial Registry. For Andorran company to start operating and issue valid invoices, it is necessary to be registered in the corresponding town hall (called Comú in Andorra) in the Commercial Registry. The cost varies depending on the activity to which you dedicate yourself, office size, and other factors.
Keep in mind that once you set up your business in Andorra you must have a fire extinguisher at home (yes, it is mandatory) and a maintenance contract.
Can I Set up a Company in Andorra and Live Abroad?
To qualify for Andorran tax residency, it is necessary to spend at least 183 days within the calendar year in Andorra. These 183 days can be organized as you wish, they don’t need to be consecutive but they have to be within the calendar year (i.e. between January 1st and December 31st of the corresponding year).
From when do these 183 days start to count? From the moment you have the Andorran residence card, not from the moment you “set foot” in Andorra, this is another key aspect that you will have to take into account.
How Much Money do You Need to Move Company to Andorra?
When one thinks about moving to Andorra, this is one of the most recurring questions. There is no fixed fee, as some of the expenses are variable. Let’s recap the main expenses, from highest to lowest:
- Deposit of €15,000 to AFA as a security bond. If you ever leave the country, this amount will be recovered without any problem.
- Pay company shared capital (minimum of €3,000).
- Notary and registries (about €1,800 ), the notary charges about €680, and €1,120 are for the registration in Companies Registry.
- Opening of commerce (it is variable, approx €700).
- Residence card €190. Subsequent renewals are charged €23.
- The self-employed CASS rate of €460 per month.
- Fire extinguisher and maintenance contract (about €75).
- Hiring an electrician to issue an “electrical bulletin” to ensure that your premises are suitable for the activity you want to carry out (€50).
- Minor bureaucratic fees (about €50 extra for the reservation of the company name, commercial name, criminal record, etc.).
How Long Will it Take to Get Everything Up and Running?
Under normal conditions, calculate approximately three months to have your company up and running in Andorra. During the 2021 year, due to COVID-19 the deadlines have increased and have been extended much further.
Moving to Andorra with Passive Residency
Passive residence is another of the most popular ways of moving to Andorra. Term passive refers to the fact that it does not authorize you to work, unlike the active residence opening a company. A passive residency program is designed for retirees, annuitants, or people who have a large patrimony and want to move to Andorra without setting up a business.
Can I really live in Andorra without working? Of course, passive residence exists for this purpose but requires a strong investment in Andorran assets, also requires living in the country for a minimum of 90 days per year.
Passive Residence: Initial Investment
First of all, it is necessary to invest €350,000 in Andorran assets, such as public debt, real estate, shares in Andorran Investment Funds, or Andorran SICAVs, mainly.
In addition to the initial investment, you have to constitute a deposit of €50,000 to Autoritat Financera Andorrana that you cannot dispose of. The deposit will increase by €10,000 for each person in your family
Practical example: a married couple with a child wants to settle in Andorra, how much would we be talking about? It is necessary to deposit €50.000 for the main resident, plus €10,000 for the spouse, plus €10,000 for the child, thus a total of €70,000.
To move to Andorra with passive residency you need to prove that your annual income is higher than 300% of the minimum wage in Andorra (currently €1,121.47 per month) and you will have to add an extra 100% for each dependent person. If you move to Andorra together with your spouse, you must prove that you have an annual income higher than €52,000 per year. Moving to Andorra, without setting up a company is reserved for high net worth individuals who can live off the income without any difficulty.
Move to Andorra and work
When someone decides to emigrate to Andorra, everything seems to bring bureaucratic obstacles and difficulties. If you really want to move and get a job in Andorra, you have one option: get a company to hire you.
How do you know where there are vacancies? Some people try to register with the INEM Andorran in the hope that they will be sent job offers for a vacancy, but it does not work well.
Residents in Andorra have preference over anyone else to apply for job offers published by a company in the country, therefore, if you manage to get in touch with them they will reply with a “standard” email telling you what we have just explained.
Moving to Andorra from the UK after Brexit
After Brexit, British nationals who plan on moving to Andorra need work or self-employed residence permit through the local immigration services. If you wish to stay in the country longer than three months then it is important to take steps by applying for company formation or finding an employer.
A passport should be valid for the proposed duration of a stay. No additional time is necessary after that, and children are allowed to go with one parent as long they have permission from their other legal guardian.
Moving to Andorra from the US
Moving to Andorra from the US can be a great way for Americans looking for low taxes and cheaper living. However, when American citizens move there they have been subject to greater scrutiny by banks in efforts of avoiding money laundering accusations like those made against Andorran banks years ago.
Andorra is known for its low cost of living and the average salary there can go farther than in many other countries. What most people don’t know, though, is that Andorra also has a robust healthcare system – all salaried employees are covered by insurance! This benefit comes with no out-of-pocket fees at any time during their health crisis like you would find in America where many face expensive medical bills.
Move to Andorra: FAQ
Is it expensive to live in Andorra?
Living in Andorra is as cheap as living in major Spanish cities like Barcelona and Madrid. You can expect accommodation, transportation, food costs to be 30% below what you would find elsewhere in the world at comparable prices.
Is Andorra a nice place to live?
Andorra is a place where you can live without the burden of high cost or unnecessary safety concerns. With many outdoor activities and opportunities for people who are location-independent, it's perfect!
Can I retire to Andorra?
Andorra has one of Europe's lowest crime rates, and it also offers some of the finest healthcare services around. In addition, you can enjoy clean mountain air that will be healthy for your retirement plans! Many retired executives choose this place as they have discovered great benefits here already.
How do I become a citizen of Andorra?
Becoming a citizen of Andorra is not as simple as one might think. Though there are no direct Andorra citizenship by investment programs, you can still apply for naturalization if you have been living in the country for over 10 years and meet all other requirements such as having sufficient knowledge of the language or taking part in social life to demonstrate your dedication to the nation.