Andorra presents itself to the world as a serious, transparent and attractive alternative and it is seeking to be a reference point in Europe.

The change of the traditional economic model

Traditionally, Andorra has been one of the strictest countries in terms of foreign investments, but the global crisis in Europe has lead to a significant change in the economic model, making the country adapt to its international surroundings, standardizing its fiscal system and adopting a transparency model in financial activity that fits within Europe.

What steps has the country followed for its international adaptation?

In 2009 Andorra signed 21 agreements on tax information exchange it also approved a new fiscal framework based on direct taxation on non-residents, corporations and entrepreneurs (2012 was the first year of implementation).

In 2013 an indirect taxation system came into force and there is a pending reform on individual’s income taxation. Agreements with France have been signed to avoid double taxation and there are negotiations underway with Spain and Portugal.

The way to economic liberalization

In 2012 a new fiscal framework which permits 100% liberalization of foreign investments in all sectors, subject to a simplified approval process came into force. This initiative aims to promote the traditional areas and the areas considered to be key elements: new technologies, healthcare and education.

This scenario of economic liberalization has also permitted the reform of the immigration model which makes the process for new investors easier and creates new types of non-profit residency.

Why Andorra?

Andorra is a good example of a prosperous and cosmopolitan country with an income per capita that beats the European average and it is only surpassed (in Europe) by Luxemburg, Switzerland and Germany. Andorra offers a very competitive business market, with a customs agreement with the EU on industrial products. It also offers the highest ratios of solvency and liquidity in Europe.

The new tax framework has undergone a differential standardization process which has enabled Andorra to preserve certain features which make it very strategic on an international-level: a tax corporate rate for corporations and individuals of 10% and a general indirect taxing of 4,5%. These two measures are very positive to contribute to business initiatives and private consumption.