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Understanding Relocation to Andorra

In our series "International Mobility - A legal and fiscal journey for families and businesses," we delve into the critical aspects that family businesses and private clients must consider when relocating to Andorra. This article focuses on tax considerations for those contemplating Andorra as their new home.

In the absence of bilateral tax treaties aimed at eliminating double taxation, each jurisdiction can apply its own rules according to domestic law. This may result in double taxation when the same taxpayer is taxed on the same income both in the country where the income is generated and in the taxpayer's country of fiscal residence.

Transferring residence to Andorra requires a careful and well-planned process.

First of all, it is essential to carry out an internal Due Diligence of the client's personal and professional situation.

Over the last decade Andorra has become one of the main destinations for elite sportspersons in Europe.

What factors make Andorra such an attractive destination for this group of residents?

Andorra has experienced significant growth in foreign investment since its introduction in 2008. To ensure a sustainable growth model and contribute to public policies, Andorra has introduced a new tax on foreign real estate investment with the Act 3/2024.

The Andorran tax system has been adapted in recent years to take into account the activity and economic structure of the country, transitioning from a predominantly indirect tax system to a direct taxation system, thereby meeting international standards, especially those set by the Organisation for Economic Co-operation and Development (OECD).

Andorra offers a simple and attractive tax framework to encourage the country’s economic growth, facilitating foreign investments and the internationalisation of national companies.