Working in Andorra Archives | ANDORRE INVEST

COVID19 – Residency in Andorra for professionals of the digital economy

andorrasolutions — Sat, 15 Aug 2020 11:15:48 +0000

COVID19 has the changed the lives of many. It is obvious that with the upcoming fall and winter months many are wondering how intense a potential second or ongoing wave will be and if lock-downs will be put in place once more. Andorra is no exception. This small country surrounded by mountain ranges with limited access points can implement landlocked controls to 99% of the influx of outside visitors and therefore limit substantially the spread of COVID19. However the Andorran economy obviously relies on border crossings for its tourism depending economy. Authorities will need to balance carefully the benefits from an already reduced tourism and shopping demand against the risk of spreading the virus within the Principality. It is likely that the second policy of restrictions will be affecting less the movements of professionals and residents and therefore have a limited impact on the local economy. Sectors such as retail, tourism, and hospitality most likely will continue to be heavily impacted.

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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Can I domicile my company in Andorra in a virtual office ?

andorrasolutions — Mon, 28 May 2018 16:57:48 +0000

This week we are going to discuss the requirements to set up a company in Andorra and the needs for having a proper domicile. As we discussed in previous articles such as the substance requirements in Andorra or offshore companies in Andorra there is no options to register a company without a proper office or domicile. A virtual office may offer you a commercial business address however it cannot substitute the need for physical space. Obviously you will wonder why you need a physical space if your business does not require a physical office or employees. Nevertheless Andorra does require precisely this in order to prevent abuse from companies simply using it as a fake domicile for tax purposes only.

So what is exactly required in terms of company domicile ?

A company must have a physical address, an individual electricity connection certificate and a maintenance contract for a fire extinguisher. This basically means you need to have a space dedicated to your company that has an electricity counter under the company’s name as well as a fire extinguisher in place.

Can I domicile my company in my personal home in Andorra ?

You can domicile your Andorran company in your home, however, you must separate strictly your living area from your company activity. This means your “office” may not have a sleeping or kitchen or general living area. Ideally, you should have a dedicated space for your business activities. Note there is inspections by the Department of Commerce to check if you are complying. During inspections they may question the possibility of you being able to receive clients or providers in your personal home. So ideally the spaces are separate.

What are my options for domiciling a company ?

Apart from renting a traditional office space or domiciling your company at your home you may also rent shared office space in a business center in Andorra. Affordable spaces starting at 390 EUR are available from Smart Executive Centers for example.

A virtual office can serve only as complimentary if for example you have your company registered at home but use a business center for receiving formal visitors or to organize meetings. A virtual office is therefore typically used only as a commercial address in Andorra rather than your official company domicile.

For further questions contact our consultants.

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Cryptocurrency in Andorra

andorrasolutions — Mon, 07 May 2018 12:28:30 +0000

Blockchain technology and cryptocurrencies are arriving in Andorra challenging the regulatory framework of banks and government.
What could be an opportunity for Andorra with excellent crypto-mining and taxation conditions is starting to push local authorities to adapt some minimum framework for activities related to cryptocurrencies and blockchain technology in Andorra.

Read more on our article Cryptocurrency in Andorra

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Andorra unemployment rate hits a record low of 1.7%

andorrasolutions — Mon, 12 Feb 2018 10:15:48 +0000

Andorra continues a path of solid economic growth with the unemployment touching a record low of 1.7%. The Andorra government presented last week their economic indicators for 2017 in terms of economic performance in Andorra. A net growth of 490 additional businesses have opened in 2017.

The growth in Andorran economic activity also translates into job growth. With an increase not only in jobs created but also overall the total amount of salaries paid it becomes clear that this growth is sustainable and points to an increase in future GDP per capita. Currently Andorra’s GDP is matching the level of Germany and substantially higher than Spain and even France. However there is still potential for recovery given the levels reached before the economic downturn in 2008.

The unemployment rate of 1.7% puts Andorra in a very competitive position with respect to other countries such as France at 9% and Spain at 17%. Even by international OECD standards Andorra is taking the lead here before Japan, Germany, Switzerland and US.

One negative side effect has been the difficulty to find qualified staff in the country. Apparently many companies are recruiting staff through Spain and France when immigrational authorizations are required and causing delays sometimes to get people quickly into the job.

We predict further economic growth for Andorra until at least 2020 when the economy will probably face impulses of slowdown given the outlook in Spain and France with potentially increasing interest rates and expanding consumer credit.

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