About Andorra – Advantages

Andorra, a micro-state with a rich culture and a privileged location, offers unique advantages for residents and businesses.

Andorra, A Country Open To Foreigners

Living in Andorra is a great opportunity for professional and personal growth. It is a country that, especially for European citizens, is a perfect choice to live in as it has a very good jurisdiction and lifestyle.

The Principality of Andorra offers many advantages for its citizens. Andorra is a microstate that has great qualities, such as its situation and culture. When coming to live in Andorra, you must also appreciate that like all countries, Andorra also has a series of drawbacks. For this reason, if you are thinking of coming to live in Andorra, you must also know the disadvantages of living in Andorra.

The advantages of living in Andorra outweigh the disadvantages. At ICOB we explain all the advantages and disadvantages of living in Andorra. If you want to come and live in Andorra, keep reading! Andorra's best-known benefit is the country's low taxes. Andorra's taxation stands out among its neighboring European countries, having similar but lower taxes, becoming a country with financial dominance. For this reason, we will start by talking about the tax advantages of Andorra.

Fiscal advantages of Andorra

When talking about the tax advantages offered by Andorra, the best way to know its tax advantages, at ICOB we show you a comparative table of Spain and Andorra, with the most relevant general tax rates in each country. Thanks to this comparison, you will be able to observe the tax differences between these two neighboring countries that have a similar legal context, but with different taxation. Next, we show you ours tax comparison table between Andorra and Spain:

Tax comparison between Andorra and Spain


Corporate tax
Corporation tax (special regime)
Income tax (range 0 to €24,000)
Income tax (range €24,000 to €40,000)
Income tax (tranche €40,000 onwards)
Income tax on capital gains
General indirect tax (on consumption)
Social contributions for companies
ITP real estate


Corporate tax
Income tax from work (min. section)
Income tax from work (autonomous max. section)
Capital gains tax (max.)
General indirect tax (on consumption)
Social contributions for companies
Exit TAX
ITP (autonomous tax)

As you can see, the tax difference between Andorra and Spain is very large. Andorra clearly offers many more tax advantages.

Now, we will go on to detail the most important advantages of each Andorran tax and its fiscal situation.

Andorra's Most Important Taxes

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Corporation Tax (on company profits)

  • The general rate of this tax is 10%.
  • This type can be 2% in the special regime.
  • There are holding companies that are exempt from having tax obligations on corporation tax 0%.

IGI - Indirect General Tax (equivalent to Spain's VAT)

  • General Type of 4.5%.
  • The essential products have a reduced or super reduced type of 0% and 1%.
  • There are services, especially cultural ones, that have a special rate of 2.5%.
  • Banking and financial services have a tax rate of 9.5%.

Personal tax (equivalent to Spain's personal income tax)

  • Maximum type of the 10%.
  • Depending on the income of each person, it has one type or another:
    • From €0 to €24,000 is from 0%.
    • From €24,000 to €40,000 the type is 5%.
    • Income from the first €40,000 is taxed at 10%.
  • Dividends from Andorran companies are never taxed, that is, they have a 0%.

CASS – Social Contributions (Social Security)

  • If you work for someone else, 22% of the salary is paid.
    • The 15.5% is paid by the company
    • The rest goes to the worker
  • If you are self-employed a 22% is applied on the contribution basis, but you must bear in mind that:
    • The minimum contribution base for 2023 is €2,284.67, for which there is a minimum contribution of €502.63.
    • There are reductions of the CASS in certain cases and meeting certain requirements.

Regarding municipal taxes in Andorra, these taxes apply to natural and legal persons. In the case of companies, they are annual and depend on the policy of each Municipality, and for natural persons they are €50-100 per year.

More Advantages of Living in Andorra

As we mentioned to you since ICOB, Andorra offers more benefits apart from taxes. Below we explain them to you!

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Legal Security

Andorra has very good legal security, especially for the establishment and residence of companies in Andorra. This security is guaranteed by its legal system and Andorran institutions. Legal certainty, a principle recognized and protected by the Constitution of Andorra (1993), is a fundamental strength of its democratic structure. This has allowed the Principality to develop considerably from 1950 to the present day and has boosted Andorran and international investment in Andorra. Since the new reforms, the legal security of international investments in the Principality of Andorra has been strengthened through the adoption of a new fiscal framework, the liberalization of foreign investments and the negotiation of agreements of non-double taxation. In the Principality of Andorra, begging is prohibited, and even more so is employment. Comparing it with Spain, Andorra also has a great advantage in this respect.

Andorra: projects, business and finance

Maybe you who are setting up a business, or already have it up and running with good financial prospects, are thinking that after all the personal effort you have put into it, you deserve to maximize your profits.

In Andorra you will certainly not find it difficult to meet people like you at the gym, in one coworking, at business events or even neighbors. People who are like you and think like you.

In just a few years we have created an idyllic environment in which to establish yourself as an entrepreneur, where to meet other entrepreneurs and where to develop projects and businesses both in the country and abroad.

At ICOB we manage with absolute discretion; but we can affirm that our clients create projects at the forefront of technology, international trade, advisors and consultants in many fields, patents, design, athletes, investors...

You will find an environment where you can not only manage your business and establish your usual residence. Also meet interesting people to have a drink with or start / finance a business.

Physical Security

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International organizations confirm that Andorra is a very safe country. Andorra is a welcoming country where people of different nationalities live together and a country that facilitates the integration of all those who decide to permanently establish their residence in the Principality.

Andorra has one low incidence of crime, a very valuable aspect when deciding to come and live in Andorra.

On the other hand, according to the United Nations Office against Drugs and Crime, in its annual publication in the "United Nations Study on Criminal Trends"a statistical report on world crime, Andorra has 153.9 people convicted of crimes per 100,000 inhabitants. Logically, it can be improved, but with this data, Andorra has one of the lowest crime rates in the world. If we compare this data with those of neighboring countries, which are usually between 500 and 1,000 crimes per 100,000 inhabitants, Andorra is one of the safest countries in the world today.

Andorra Is A Country That Offers Security To Its Citizens

Andorra ranks fifth in the world according to World Bank data as one of the safest countries according to its political stability and the country's low crime rate. Again comparing Andorra with Spain, Barcelona is in position number 31 in this ranking, being one of the most unsafe cities in the world. We could think that this difference in position is due to the fact that Andorra is a small country, but we must not forget that even though it is a small country, about eight million tourists pass through Andorra every year.

Stability of the country

Andorra, throughout its history, has shown that it is a stable country that has maintained its neutrality in the face of the various war conflicts that neighboring countries have suffered. Andorra is an internationally recognized State, therefore, it is based at the UN and has representation in numerous international bodies. As a result, it is a country with worldwide support.

Health system of Andorra

Andorra offers a very advantageous healthcare system. The Andorran system is incorporated into the Andorran Social Security or Andorran Social Security Fund (CASS). All professionals who provide CASS subsidized services can comply with a traditional screening system, in which the State is obliged to fund medical services, but users can choose who, where and how to obtain these services. Thanks to this, there is freedom of doctor per citizen and it allows competition between services, thus improving the quality and value of the service.

Andorra has the so-called co-payment. Here's how this co-pay works:

  • Registered users pay the full cost of regular CASS services.
  • After a certain period of time (hours or days), CASS returns to the citizen the corresponding co-payment percentage
  • You can have private indemnity insurance to cover the percentage of co-payments incurred.
 Inside the preferred routeOff the preferred route
Medical visits75%33%
Acts carried out, tests and prescribed products75%60%
Acts of re-education and functional re-adaptation75%60%
Hospital admission90%33%
Health acts carried out as a result of maternity100%33%

In all cases, health service providers must have an agreement with the CASS

For the acts performed or prescribed by health service providers who do not have an agreement with the CASS, the reimbursement of expenses will be made at the 20% of the liability rates.

The amount of the subsidy (the amount returned by CASS) is as follows:

  • 75% of expenses arising from visits to specialists or medicines
  • 90% when the expenses correspond to hospital admissions or surgeries.

Finally, the CASS is responsible for financing the 100% of the treatment for those people who can demonstrate that they cannot cope with the payment of the treatment, as for example is the case of people without resources or in a situation of social exclusion. On the other hand, there are also quite affordable complementary private insurances that cover the non-subsidized amount of the CASS, avoiding co-payment. If you want to know more about the health system in Andorra, do not hesitate to contact us.

Natural environment

Andorra's environment is another of the advantages the country offers. For this reason, the Government of Andorra is trying to preserve it. The Government has started the Green School project, they implement international agreements, green roads, very good waste management, fauna recovery or cogeneration plant. These are some of the aspects that are being worked on by the Government of Andorra to conserve the country's environment.
In recent years, there has been a strong commitment to selective collection and the use of low-polluting vehicles.

Great economy of the country

Andorra is a country with an economy solvent i sustainable. Before talking about Andorra's economy, let's put you in context. Andorra has a population of around 90,000 inhabitants and a population density of 160 inhabitants/km. About 9,000 companies and establishments and more than 200 tourist accommodations are registered. Once we know this, let's talk about the economic state of Andorra.

The Principality has a per capita income of €36,000 per year (*2021). Andorra has more than 36,000 employees with an average salary of around €2,200 per month. As for the country's unemployment data, there is currently a percentage of 1.5 and 2.5% unemployed among the active population. This percentage is undoubtedly one of the better benefits of Andorra.

The country's public debt is less than 40% in relation to GDP and, moreover, it is reducing and improving every year.

More information

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Services of the Principality of Andorra

Andorra is a country that offers many services thanks to its climate, its geography and the culture of its people. The sector of tertiary activities is the country's greatest potential, especially the services sector. Andorra stands out for its trade and hospitality. Other services that also stand out are those of the Public Administration, real estate activities, rental and business services.

In direct relation to these service data, we have the tourism data in the country. Tourism in Andorra is the main source of income and benefits for its inhabitants. Each year Andorra has around eight million tourists, including those who stay in the country and those who come to spend the day, especially tourists from Spain and France.

As we all know, in Andorra the ski season must be highlighted. This is undoubtedly the biggest activity in the tourist field that the country has to offer. Andorra has Grandvalira, Vallnord and Naturland, which cover all activities, with 318 km of pistes and more than 3,075 hectares of skiable areas. This gives it the record for the most mechanical chairlifts per square meter in the world, with a capacity of 160,000 people per hour. Unbelievable!

In addition, Andorra offers more services that are a great appeal for tourists. Such as Caldea, the Palau de Gel, the Eco-themed Park in Naturlândia, three natural parks that are UNESCO world heritage and many sporting and artistic events throughout the year.

Find out about the shopping and commercial advantages of Andorra
Commerce in Andorra is known throughout the world. This great activity in the country is mainly concentrated in Andorra la Vella and Escaldes-Engordany. What stands out most about Andorra's commercial offer is the quality of their products and the competitive prices. The fact that shopping is cheaper is a big draw for the country's residents and tourists.

These prices that allow you to make cheaper purchases are thanks to the fact that in the country there is no excess of costs due to indirect taxes, as happens in neighboring countries.

Connections of the Principality of Andorra

The location of Andorra is excellent. The country is located in the southwest of Europe, in the Pyrenees between Spain and France.

We have a bus station with constant direct connections between Barcelona and Josep Tarradellas airport T1 and T2, Toulouse and its airport, as well as the city of Lleida, Galicia or Portugal.

Recently, it has theAndorra-La Seu Airport (LEU), located in La Seu d'Urgell and is the closest airport to the country, located 7 km from Andorra's border with Spain. In addition, this airport allows the arrival of private jets.

We currently have a regular flight line with Madrid and soon connections with Palma de Mallorca, Paris, Lisbon and London are being studied.

The creation of a heliport in Andorran territory has been planned soon, more specifically in the town of Pal, which will offer a direct connection between Andorra and the World Trade Center (cruise terminal) in Barcelona in a 30-minute flight.

Andorra has total fiber optic coverage for all homes, this being a great competitive advantage offered by the country. In addition, Andorra has always been an advanced country in telecommunications systems, both in the telephone field and in Internet services. The public operator that manages and operates the telecommunications network and services in Andorra is Andorra Telecom. This public operator administered by the Government of Andorra offers innovative telecommunications services, of the best quality and price. In this way, a good telecommunications service is guaranteed both in homes and in businesses Principate of Andorra.

Disadvantages of Andorra

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Living in Andorra has more advantages than disadvantages. But like everything, in Andorra there are also some disadvantages. From ICOB it is very important for us to show the benefits of living in the Principality of Andorra, but we also want to be clear and name the disadvantages of living in Andorra and the fact is that Andorra is not a country for everyone. For this reason, below we name the disadvantages that exist:
  • Andorra is a small country. Depending on each person, this point can be a disadvantage and at the same time an advantage. Although in terms of land it is not such a small country, many people may feel limited, because 98% of the country's total is forested and mountainous territory. This type of territory implies another disadvantage:
  • Mountainous territory: Andorra is a very mountainous territory. This becomes a country with a lot of unevenness and this can be a drawback for people who do not like it.
  • The rental prices of the houses: The average rent for a house in Andorra is quite high compared to other secondary cities in Spain for example. If we compare it with big cities or capitals, rent is more affordable, but considering that it is a small country, the price of rents is high.
  • The Andorran banking system. Although it has improved in recent times with the incorporation of BIZUM, free national transfers and the digitization of its platforms, banks apply high commissions for transfers, there is a strict control of assets, the operation with "exchanges" or " OF" is looked at with a magnifying glass or when not directly prohibited.
  • Contributions to social security. Another disadvantage that we can find in the Principality of Andorra are Social Security contributions. Although there are bonuses for certain freelancers, the fee for freelancers or self-employed workers in Andorra is between €500 and €800. This amount can be negative for many freelancers with normal or low monthly income, but it also hurts those with a high salary. Despite this, the National Insurance in Andorra it is better than that of other countries such as for example the neighboring country Spain. Andorra has a social security with more service coverage than Spain, it is very efficient, solvent and effective. Due to recent changes in Spain, the quotas in Andorra are even below those of the neighboring state.
  • Andorra is a quiet country. Like other points mentioned above, this disadvantage can be an advantage. Compared to other places, Andorra is not a country that offers a great deal of partying and leisure. But that doesn't mean that people in Andorra don't have a good time and don't enjoy leisure time in clubs, pubs or popular festivals like the Roser d'Ordino or the festa major de Sant Julià. In recent years, the offer has increased significantly, offering other musical styles and festivals in both summer and winter.

As you can see, the disadvantages of living in Andorra are very few. In addition, some of the points mentioned can be disadvantages or advantages depending on the tastes of each one. If you have any further questions about the disadvantages of living in Andorra, do not hesitate to contact us. At ICOB Andorra, we will solve all your doubts about living in Andorra!

Living in Andorra has more advantages than disadvantages

In conclusion, residing in Andorra offers more benefits than drawbacks. Throughout this article you have seen that Andorra offers advantages beyond tax benefits. Like for example yours legal and economic situation.

Living in Andorra is a guarantee of a good quality of life, but perhaps the country is not for everyone. For this reason, tell us your case and we will assess it from ICOB. Contact with us!

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