Dateline: Andorra la Vella
Andorra, located in the Pyrénées between two huge European countries (France and Spain), is a mountainous independent microstate of 181 square miles (468 sq. km.) run as a coprincipality by the president of France and the bishop of Urgel, who carry the duty of governing this tax and residency haven.
The most populous of the European microstates, Andorra offers beautiful landscapes with a pristine and healthy environment. Catalan — the official language — is spoken alongside French, Spanish, Portuguese, Castilian and English among the diverse expat community.
Benefits of starting a business in Andorra
As beautiful as Andorra may be, it also falls high on the spectrum for the practical considerations important to investors and entrepreneurs.
Here are the top 5:
Andorra’s favorable banking policies
Not having a national bank of its own, Andorra-based banks continue to offer private-numbered accounts, with the appeal of banking privacy being its big draw.
The majority of Andorran banks do not require a minimum, but may charge you a hefty annual fee. Privacy comes at a price nowadays.
In comparison to the Swiss model, safety deposit boxes are the norm.
Andorra’s reasonable taxation rules
Andorra had no tax on personal income at all until 2015, when the country finally bowed to EU pressure by requiring 10% income tax from its citizens.
Depending on your earnings, this may or may not be an excessive burden.
However, the law that was adopted January 1 allows little or no personal income tax on your business if it is mainly operating outside of Andorra.
Either way, it remains on the low end of the European tax spectrum.
Andorra’s high class residency options
Though Andorra doesn’t offer easily attainable citizenship or permanent residency options, a temporary residency is highly sought after in this small, unobtrusive microstate.
Once it’s proven that you are neither parasitic nor harmful to the social security system, you can receive residencies that can last up to a decade.
Residency options are available that would require you to live in Andorra only 3 months of the year.
Andorra’s stable political and economic climate
Even though Andorra adopted the Euro as its national currency, it doesn’t belong to the EU, EFTA or the Eurozone, nor does it suffer from its economic pitfalls.
Andorra has a strategic agreement with the European Economic Community and has its own border controls with France and Spain.
The last time Andorra had a bank failure was in 1968.
Andorra hasn’t taken part in an armed conflict in the past 1,000 years, despite technically having been at war with Germany until 1958 even though it did not send any troops to fight. This culture of pacifism is pervasive.
Andorra is a safe country. The Andorran government does a lot to prevent criminals from bringing their business inside its borders.
Andorra’s geographical and cultural advantages
Andorra finds itself between Spain and France, with comfortable access to continental Europe.
In addition, it is not at all far from North African countries like Morocco, Algeria and Tunisia.
Although catching a flight at the nearby airports of Toulouse-Blagnac, Perpignan, Lleida and Barcelona may involve a 2-hour drive or more, it’s a drawback that’s balanced with the natural beauty that comes with the mountainous region.
The citizens of Andorra share the lifestyle that can be found in its larger neighbors, as well: relaxing living (with a contrasting upbeat side in the capital of Andorra la Vella), legendary cuisine and a rich culture.
Most importantly, Andorra meets the requirements for Nomad Capitalists seeking a place to temporarily hang their hats: splendid weather, low taxes, low crime rate and, above all, easy options for residency.