- Income Tax800 €1 %
Andorra has a progressive income tax (Impost sobre la Renda de Persones Físiques or IRPF) with only 3 tax brackets that taxes higher-income individuals more heavily than lower-income individuals:
- 0 to 24,000 € is exempt from paying income tax.
- 24,000 to 40,000 € is taxed at a 5% rate.
- Anything exceeding 40.000 € is taxed at a 10% rate.
Our recommendation is to set yourself a salary of 40,000 €, as anything exceeding this will be taxed at 10% either as income tax or as corporate tax. You can later get all or part of this extra income as dividends without paying any additional tax. However, if you choose to invest all or part of this capital from your company instead of getting it as dividends, you can further reduce the corporate tax.
- Social Security5,698 €6 %
Self-employed individuals and business administrators are subject to the Social Security (CASS) tax, which, for 2022, sits at €474.85 per month, before any applicable deduction.
The minimim contribution base for this tax (for self-employed individuals) is 22% of the Andorran average salary from the previous year, which has been around 2.000 € for the past few years:
Average Andorran salary in 2019 = €2,129.44 / month.
CASS contribution for 2020 = €2,129.44 · 22% = €468.48/month or 5,621.76/year
Average Andorran salary in 2020 = €2,081.26/month.
CASS contribution for 2021 = €2,081.26 · 22% = €457.88/month or 5,494.56/year
Average Andorran salary in 2021 = €2,158.40/month.
CASS contribution for 2022 = €2,158.40 · 22% = €474.85/month or 5,698.20/year
- Corporate Tax6,000 €6 %
Andorran companies must pay a flat 10% corporate tax (Impost de Societats or IS) on its profits. This tax rate is 2% for holding companies that invest outside of Andorra.
If you want to distribute dividends from your company to yourself, no additional tax will be paid. Dividends are exempt from income tax and any other tax.
- Net Disposable87,502 €87 %
Net capital after paying IRPF, CASS and IS. Some small local taxes and taxes, applicable depending on the professional activity developed and home.
When spending this money on products and services, they will be taxed with their corresponding VAT (Indirect General Tax) or IGI), which is the lowest in the EU:
- 0% on healthcare and some public services such as education, childcare, sports or culture.
- 1% on food, non-alcoholic drinks, and certain media like books, magazines or newspapers.
- 2.5% on other cultural and turustic activities, works of art.
- 4.5% is the general rate.
- 9.5% is the increased rate that applies to banking and financial services.
It's worth noting that even with this low IGI, some products may cost the same or even be more expensive in Andorra in Spain, France or Portugal. However, Andorran residents can purchase tax-free goods abroad!
- 1Get a temporary ID (NIA)
- 2Reserve your business' name
- 3Get the foreign investment authorization
- 4Create your company
- 5Get the tax registration number (NRT) for your company
- 6Apply for your visa
This money goes straight into your company's account. You'll be able to use it later.
Active residents must make a 15,000€ deposit to the AFA (Autoridad Reguladora Financiera). If you ever leave Andorra or get the Andorran nationality, you'll get this back. The Government has recently announced this deposit will be increased to 50,000 (although with exceptions for professionals in the digital field).
The final cost will depend on multiple factors: professional activity, billing volume, employees, investments, additional family members, other administrative procedures...
- Tax and accounting
- Administrative and HR management
- Family office
- Developers & Engineers
- Investors & Traders
- Pro Gamers & Streamers
- Entrepreneurs & Founders
- YouTubers & Content Creators
- Other Liberal Professionals
- Competitive Tax System
Corporate tax and personal income tax under 10%. General sales tax is 4,5%.
- Dynamic Economy
35.995€ GDP Per Nominal Capita, higher than the EU average. 1.7% unemployment rate, among the lowest in Europe.
- International Investment
Foreign investment has grown by approximately 500% in under a decade. Are you going to miss out?
- Top Health System
One of the best in the world. 95/100 Lancet's Healthcare Access and Quality Index.
5th in "political stability" and "no criminality" in the World Bank's report. Spain is in 31st place.
- Nature & Outdoors
Breath clean and "thinner" air and extend your life expectancy.
94.5% of households have Internet connection via optical fiber at an average speed of over 300 MBPS.
- Activities & Entertainment
8 million visitors a year and plenty of sport and cultural events all year long. Your won't get bored.
Currently negotiating an association agreement with the EU, after years outside the lists of tax paradises.
The only official language is Catalan, this being the most popular and the only one accepted in official communications, with some exceptions.
However, the second most popular language, by a small margin, is Spanish, this being the most frequent mother tongue.
Portuguese and French are also spoken by a small percentage of the population.
No, the OECD stopped considering Andorra a tax haven in 2018 and since then it has taken different steps to improve transparency in all areas, the fight against money laundering and the international homologation of its very competitive tax framework.
Yes, with an active residence, you are required to live most of the year in Andorra (183 days) and it is also important to be able to prove it, especially for those who are on the limit. There is also a passive residence (also called non-profit) that only requires you to live in Andorra for 3 months (90 days).
Definitely. Each person is free to live and work wherever they want, within the law. In addition, two important aspects should be highlighted:
On the one hand, once your residence has been modified, it will be your new country of residence the one providing you with the usual public services: education, health, unemployment benefits, pension, infrastructure... Therefore, it is logical that you pay your taxes there.
On the other hand, it would be reasonable to ask ourselves if all the public services that were provided to us in our home country were already paid for with the taxes we paid during the time we lived there. Although this is a complex issue that will depend on each particular case and on many different factors, it should be noted that all countries benefit from the talent of other countries to a greater or lesser extent. In other words, all countries lose talent that leaves before the investment made in them has been recovered and, at the same time, they benefit from talent from other countries whose development was paid for by others. Therefore, each country is responsible and sovereign to establish the policies it deems appropriate to attract the talent it needs at any given time or to stimulate the sectors of the economy that it considers strategic and most important for its production model.
Spain, for example, usually receives 2-6 times more immigrants each year than it contributes emigrants, considering only migratory movements within the EU. In addition, Spain reduces the corporate tax to 4% in the and between 2014 and 2019 granted around 600 in exchange for investments in real estate of at least € 500,000, which do not require living in Spain but grant a flat rate of 24% for the income generated in Spain to their beneficiaries. In addition, there is also a specific type of company for investments in real estate above € 5,000,000, known as , with a 0% corporate tax, meeting certain conditions.
Andorra, on the other hand, offers everyone and with much more accessible conditions, among many other advantages, a corporation tax and personal income tax that, combined, do not exceed 10%.