The Council of the European Union has published on 22 February 2021 the revised list of non-cooperative jurisdictions for tax purposes, also known as tax havens. The changes to this list are based on the ratings published by the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes. For the purposes of this list, the EU requires jurisdictions to comply extensively with the international standard for transparency and exchange of information on request (EOIR).

The criteria for including jurisdictions on this list are failure to meet agreed commitments related to reforms to bring them in line with good tax governance objectives, or that have not yet entered into a dialogue with the EU in this regard.

This report is published after the controversy in Spain about the ” escape ” of Spanish YouTubers to Andorra for the alleged sole purpose of saving taxes and the proposal by Spanish politicians for Andorra to be included in the list of tax havens. As expected, Andorra is not on this list published by the Council of the EU as it meets all the criteria of good governance and fiscal transparency.

Andorra, through its head of government, Xavier Espot, has stressed that the proposal from Spain starts “from a false premise that is based on prejudices” and made it clear that Andorra “is no longer a tax haven”. Furthermore, the criteria for granting tax residency in Andorra are clear, strict and must be fully complied with. There are no shortcuts for having large fortunes.

It is important to emphasize that Andorra offers much more than tax advantages: an enviable natural environment, high quality of life, privileged geographical location between Spain and France accessible by road, excellent health care, multilingual education system, high-speed Internet, signed tax information exchange and double taxation agreements… and for all these reasons we invite you to visit us and get to know Andorra better.

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The inequality in the way the COVID19 has affected the global business and working community is visible among the workforce of much of Southern Europe and worldwide. The drop in jobs related to tourism, hospitality, and B2C services is contrasting with the rise of independent consultants that work as freelance in the IT sector or are related to the digital economy in general. With the growth that we are experiencing in e-commerce and IT-related services, it becomes clear which sectors are benefiting from the current tendencies. Andorra is positioning itself with this trend as a potential base and place of residency for a skilled, independent, and flexible workforce.

Working from home is becoming increasingly the norm for many professionals in those sectors. They are flexible and can be digital nomads when it comes to choosing their home base.

Anyway, coming back to the topic, life quality and taxation are important factors that influence higher relocations to Andorra. Besides this, the health system, general safety, and crime, as well as quality of life-related factors, are to be considered for a potential residency. Tax residency in Andorra has gained in popularity during those months of lock-down and ongoing pandemic. Our research and internal data show that the demand to establish a residency in Andorra has risen mostly among IT consultants and technicians. Home office has come to stay at least partially. Even digital nomads find themselves limited given travel restrictions and the issue of national health systems in certain countries such as in Asia and the Caribbean.

Andorra offers one of the best health systems in the world. The cost of social security and health care coverage is very competitive as well as living expenses for housing, food and utilities. In a worst-case-scenario of an ongoing pandemic over months or a year Andorra can be a safe-haven for those that may provide their services over distance working from home or with limited travel.

Through an official income tax of 10% with an effective tax rate well below that on salary / earnings Andorra offers multiple advantages for those that become tax resident. Corporate tax at 10% and tax-exempted dividends as well as the absence of wealth tax make Andorra more than attractive for medium and high earning individuals.

We do not dare to predict the outcome of the pandemic but it is clear that for years to come companies will reduce travel budgets, home office or working over distance will remain in place at least partially and the tax burden among OECD countries will be on the rise. Andorra is not immune to the drop in its tourism sector and will also be pressured to reduce its fiscal deficit. However it is well aware that its tax regime is one of the main attractions for foreign investment which it will rely on even more in a post-COVID situation.

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The Principality is ideal for both business and pleasure. Its political climate, like its economy is very stable. Living with partners, families or siblings Andorra offers high standards of living in a safe, multicultural, discreet and uncrowded environment. It offers excellent education and healthcare establishments and communications to neighbouring countries. Enjoy our video.

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Like most countries in mainland Europe, Andorra has compulsory public with an optional private healthcare. Andorra’s social security system funds the healthcare system. In 2017, The Lancet published a the Healthcare Access and Quality Index (HAC). It ranked Andorra number 1 in the world with a HAC score of 95/100. In 2010 a Commonwealth Funded report found that Andorra’s public health care system ranked 4th globally for equality, efficiency, and entrance care. Healthcare is funded by its citizens and residents – individuals in employment, unemployment, those in receipt of pension payments, and employers.

In 2001 The World Health Organization (WHO) reported that life expectancy in Andorra is really high – 82.9 years for women and 76.2 years for men. CNN reported in 2009 that it was, ‘good health care, clean water, proper diet, plenty of exercise and a low-stress, positive life’, that are major contributing points to this.

How to get health coverage in Andorra

As a resident you get access to the healthcare system by joining the Andorran Social Security System (Caixa Andorrana de Seguretat Social (CASS)). Most of the principality, 92 % of its inhabitants, are covered by its social security. It is thought those not covered are most likely to be passive residents, but they are required to be covered by private insurance.

One may be employed or not to register for social security. To be covered by employment, it must be by an Andorran company or a foreign company. The unemployed may opt into CASS paying a contribution of EUR 200 to 400 per calendar month. Having Andorran social security is not stand-alone healthcare coverage. It covers accidents in its neighbouring countries in France, Portugal and Spain. Note one is only covered if the CASS are notified before travel and the medical bills are sent to CASS for reimbursement.

How much do you pay for healthcare in Andorra?

Coverage covers part, not all, of healthcare costs. From CASS contributions 75 percent of the cost is reimbursed for outpatient medical and 90 percent for hospital expenses. Work related injuries and giving birth are covered 100% by CASS.

It is compulsory for new Andorran company employees to be registered with the CASS. An employee pays 6-9% of their salary and the employer 15.5% to their social security contributions.

When treated by a doctor, individuals are given a stamped form and receipts. Reclaiming these expenses is via a local CASS office with all documentation. Reimbursement is via bank transfer.

Hospitals, healthcare and care for elderly centres

The Andorran healthcare network is quite big considering the size of Andorra. There is a principal 200 bed state-owned hospital (Hospital Nostra Senyora de Meritxell).

Around the principality there are 10 healthcare centres providing very high standards of care. They are open during the week but rarely on the weekend. Centres provide preventive care, immunizations, first aid, antenatal and childcare, family planning and general counseling. One may receive urgent attention by visiting a health centre or having a house visit without an appointment. Elderly patients may be cared for in a 50 bed private geriatric centre (Centre Geri tric Sant Vicenç d’Enclar).

Andorra has one of the largest ratio per capita of pharmacies to population in the world. In the principality there are 50+ pharmacies providing prescribed and non-prescribed medications and health supplements.

Is it recommended to get private health insurance?

It is recommended to seek out health insurance. It allows access to private clinics and healthcare. It has been estimated that about 25 percent of the population have private health insurance for its benefits. Private doctors are legally allowed to conduct surgical and diagnostic operations in a hospital.

Andorra healthcare coverage for foreigners

Private health Insurance coverage is highly advised before visiting Andorra. When visiting Andorra as a foreign national you are liable to pay for all medical costs. European visitors need to note that the European Health Insurance Card (EHIC) is not accepted in Andorra.

What type & when do most accidents in Andorra happen?

Most accidents happen during Andorra’s peak time winter sports season. Travellers are advised to keep abreast with local avalanche alerts and adverse weather reports. Avalanches typically happen during mid-winter to early summer. Landslides occur after extended periods of heavy rain. Crime related injuries are next to none.

What are the largest mortality causes in Andorra?

For the native population tumours, cardiovascular and respiratory diseases are reported to cause the most deaths. Infant mortality is very low. In 2018 CIA World Factbook recorded it was 3.6 deaths/1,000 live births.

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Citizenship via acquired nationality / naturalisation

The most common form of citizenship is by non-native passive or active Andorran individuals with 20 years of residency. They then may apply for Citizenship (Art. 11). Individuals must pass a Catalan language, Andorra history and a geography exam.

Once qualifying to being allowed to apply for citizenship they have 5 years to pass the exams. During this time, the individual must present a current nationality renunciation document to obtain the Andorran nationality and passport.

At the time of writing, the Principality’s Government looks to investigate reducing or disregarding residence time length in a future bill. For minors to be educated in Andorra between 6 to 16 years old will have citizenship in 10 years of living there (Art. 11.2).

Andorran Citizenship Through Marriage

A non-native Andorran with 3 years of residency and who contracts marriage with an Andorran native (Art 10) is entitled to citizenship. This may be 3 years before or after the day of wedlock. An individual of foreign birth with 15 years of residency and with Andorran heritage – a native citizen grandparent, is entitled to citizenship. (Art. 9.2).

Andorran Dual Nationality Citizenship

Unlike Spain, Andorra does not accept dual nationality citizenship. One must give up present nationality and passport to become a citizen.

Becoming an Andorran Citizen by descent

• Children of Andorran citizens born domestically (Art. 1) and in another country (Art.2) are entitled to citizenship.

Andorran citizenship is entitled by birth

• A child born to foreign parents having completed 10 years of residency will be entitled to citizenship. If neither parent has reached 10 years of residence, the minor as is entitled to a provisional passport. (Art. 6.)
• Children under 14 years old adopted by Andorran or foreign citizens and resident in Andorra for 10 years minimum, then the child is entitled to obtain a provisional passport (Art. 2 and Art 8.1, 8.2)

It takes a long time to get acquired citizenship. Care must be taken once it is achieved. It is forfeited if an individual becomes another country’s citizen. Simply, you have dual nationality, which is illegal. Individuals may not work for nor bear arms for the non-domestic government.

For more information don’t hesitate to get in touch with us.

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Labor legislation in Andorra

Have you wondered what labor legislation in Andorra offers to foreigners? According to Law 35 from December 2008, both contract parties have equal rights and obligations. Keep in mind that Andorra’s economy mainly focuses on tourism and trade – something that generally has favorable results concerning working legislation. We have outlined an overview of the most decisive factors for you to consider.

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