According to the new ranking elaborated by the company Bradley Hackford, which offers services to expatriate capital in a discrete way, the second most interesting country in the world to establish yourself a physical and tax residence, due to the low taxation pressure, is Andorra.

What is the ranking based on?

It is based on the valuation of five points:

  • The level of taxation supported by the residents; quality of life, physical and legal safety of the country
  • The quality of the economic investment programme developed by the local government in order to encourage new residents to invest in the country.
  • The speed in processing procedures to make investments easier.
  • The geological location and accessibility.
  • The leisure opportunities that can be found there.

Contradictory image

The fact that Andorra appears in the second place of this ranking, after the Bahamas and followed by Monaco, Bulgaria and Panama, contrasts with its efforts to internationally project an image that distance the country from being a tax haven to keep capital of doubtful origin.

What changes will the new Personal Income Tax (PIT) law introduce?

The main changes the new law introduces are:

  • Every physical person with residence in Andorra whose annual net salary surpasses 000€ will have to pay taxes.
  • The standard tax rate will be of 10% with 50% subsidies for those general incomes between 24.000€ and 40.000€.

Despite the changes Andorra is still attractive when it comes to paying taxes. If someone who hasn’t got the residence permit wants to have the physical residence, it is compulsory to invest 350.000€ in a bank deposit in a personal account, in a real estate purchase in Andorra or invest this money in an Andorran enterprise. It is also compulsory to pay a 50.000€ deposit to the Andorran government.

What types of residents without working permit exist?

  • Type A: they live in Andorra without working there
  • Type B: they participate in international activities without receiving income from local activities
  • Type C: international artists or internationally known people (athletes or researchers)

Every type requires a minimum presence of 90 days in Andorra.

Should you have any questions or you need more information please contact TAX Economists and Lawyers.