Tax residency

ANDORRA RESIDENCE PERMIT

Key facts about the country:

1. Andorra is not the EU country, but EUR is its currency;
2. Andorra is not a part of the Schengen area, but is situated in the center of Europe;
3. Andorra has no airport, the nearest ones are Toulouse and Barcelona;
4. There is no obligatory passport control, although the stamp about the entry/exit of the Schengen area can be put on-demand;
5. Bank secrecy is protected by the Constitution, the disclosure creates criminal liability.Банковская тайна защищена конституцией,разглашение влечет уголовную ответственность

Capital: Andorra la Vella
Area: 468 sq. km.
Population: 76,098 people.

Value offer:

1. Residence permit in an independent European country
2. Free travel to Spain and France without a visa
3. Tax residence upon request, in case of staying over 90 days
4. Easy access to the residence permit, low taxes, sound banking system combined with stay in Europe
5. There is no automatic exchange of bank information on tax residents

High GDP per capita, safety, clean environment, recreational opportunities and low costs.

Features of Residence Permit in Andorra

Residence permit – this is a separate card, which is not reflected in the passport.

Travelling:

1. Residence permit without the right for a work demands to stay in the country only 90 days per year
2. Andorran banks check residence permits by electricity bills
3.  Residence permit allows staying in Spain and France without a visa
4. Schengen visa can be obtained in Andorra for 1 day only

Taxes:

1. Residence permit does not necessarily entails tax consequences in Andorra
2.  Tax Certificate is available upon request
3.  Effective income tax rate is 0-10%

Saving:

1.  There is no automatic exchange of information on tax residents
2.  High reliability of Andorran banks
3.  Free access to brokerage and multi-currency accounts and various investment instruments

Residence Permit vs. Tax Residence Permit

Residence permit without tax status:

• The residence permit ≠ tax consequences
• There are no taxes in Andorra
• The automatic exchange of bank information on non-residents (2017-2018)

Residence permit + tax status:

•  The holder of a residence permit becomes tax resident:
•  being in the country > 183 days, or on request
•  Income tax is -0-10%
•  Reckoning of taxes paid abroad
•  Tax certificate for individuals and legal entities
•  Bank secrecy (the automatic exchange of information is not applied).

Basic requirements for a residence permit:

 A minimum of 90 days stay in the country per year for a residence permit and for investors
400.000 EUR of return investments in the economy:

• Property
• Securities of Andorra Companies
• Governmental securities
• Bank deposits
• Investment funds

Address in Andorra:

• personally owned or leased real estate

PROCEDURE AND DOCUMENTS

The schedule to apply for and receive the residence:

Terms until the renewal are 2-2-3-10 years

Note: Terms and conditions, documents and requirements vary from case to case, they must be agreed with the migration officer and bank manager

* –  Apostille is required
** – An example for one applicant. For each dependent applicant (spouse, minor children) + 10,000 EUR are transferred to INAF, which reduces the required amount of investments in the economy of Andorra

Required documentation:

1. Signed forms for opening of a bank account
2. Copy of the travel passport
3. Bank statement
4. Letter of recommendation from the bank
5. Disclosure of the origin of funds transferred to the bank
6. A copy of the domestic passport
7. Proof of place of residence (for 5 years)
8. Proof of employment / business activity (for 5 years)
9. Holding companies, if > 25%, then the corporate documents are required
10. Tax returns (for 5 years)
11. Certificate of no criminal records * (not older than 3 months, from the country of residence and country of birth) Marriage certificate*
12. Address in Andorra
13. Insurance in Andorra
14. 1 photo
15. Travel passport in original
16. Domestic passport in original (to show)
17. Advance payment of 50,000 EUR transferred on the account of INAF
18. Investments of 350,000 EUR into economy of Andorra (real estate, bank deposits, funds, securities of Andorra companies and institutions)

Tax rates in Andorra for tax residents:

Tax on:
Inheritance   No
Wealth          No
Dividends and others personal income 10%
Capital gains 10%
Company’s profit 10%
Holding Tax:
Income         No
Dividends     No