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Trader in Andorra: trading taxes

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One of the standardized types of customer, Insiders, is the broker. For all those people who base their professional and / or business activity trading frequently whether acting as a "trader" with its own capital or as a "broker" with foreign capital, Andorra is a very attractive destination. The possibility of carrying out the activity of financial advisor and analyst and wealth manager regardless of physical location, enables many professionals in the sector move their residence to the Principality of Andorra.

These professionals find in Andorra a highly competitive jurisdiction from a tax point of view, an excellent internet connection throughout their territory and an environment of security and comfort, which enable their activity on the stock exchange to be carried out in a manner optimal, fast and at the highest performance and profitability. Next we will write the biggest advantages of trading in Andorra.

Stock market operations in Andorra in 2020. Trader, broker and financial analyst.

Tax advantages for the trader

Obviously the first advantage of trading in Andorra is the attractive taxation. If you still did not know the bases of Andorran taxation, you can visit our page on taxes in Andorra. Very relevant is the fact that Andorran personal income tax does not tax the capital gains generated by the purchase and sale of shares and exchange-traded funds. To be more precise, any capital gain generated by the sale of shares or participations, when the seller has not held more than 25% of participation in the entity, is completely exempt.

It is important to note that this exemption not only applies to the actual sale and purchase actually made, but to all activities through which a profit is obtained with listed shares, provided that the instrument used represents ownership of said shares. It is because of that, in certain cases cases are not considered and therefore the exemption does not apply. Access to this exemption will depend on the specific form, method or platform used to operate. We recommend resorting to professional advice for a better treatment of your particular situation and correct tax planning.

Thus, specifically for a trader or broker, who carry out low participation operations, equity transactions are usually tax exempt, fact that allows them to significantly increase their net financial profitability, and therefore, represents an unquestionable increase in their economic capacity. In Spain, this type of profit is taxed between 19% and 23%.

On the other hand, assets other than shares and investment funds are taxed at a maximum of 10% on capital gains, thus being very attractive. In addition, the fact that the exemption also applies to investment funds, allows the possibility of benefiting from it by investing in funds that in turn operate with the assets in which you want to invest. For example, although this exemption does not apply to earnings from fixed income operations, it does apply to investment funds that manage fixed income assets.

In addition to the planned exemption, for participations over 25%, a total exemption is also foreseen applicable on the gain derived from the sale of shares or participations, in any case, if the holding period has been greater than 10 years. 

Furthermore, the entry into force of Agreement to Avoid Double Taxation between Spain and Andorra, eliminates the possibility of Spain taxing profits of the natural persons resident in Andorra, when they derive from the sale and purchase of listed shares (in general, shares or participations in companies where they hold less than 25%, provided they are not companies whose main asset is made up of real estate located in Spain).

This second advantage applies to the capital gains of all the countries with which Andorra has signed a Double Taxation Agreement (CDI)There are currently eight and several in negotiations. However, for the other countries, although these earnings are exempt in Andorra, the countries of origin may apply taxes on said earnings even if the subject is resident in a foreign country.

Because we recommend studying it and doing international tax planning, with experts both nationally in Andorra and internationally such as the collaborators and associates of Andorra Insiders, who have already dealt with numerous similar cases. We optimize your taxation and taxes according to current legislation, in a safe and strict way.

State-of-the-art Internet connection

The fact that Andorra has 100% fiber optic coverage implemented in every household in the country is more than relevant for all those entrepreneurs who need a fast and secure internet connection. The case of a broker, financial analyst or other who does home trading is one of them. Andorra has been constantly improving its telecommunications technologies since 2012 to easily attract digital businesses, and is currently a world pioneer in this regard. We have more Andorra advantages here, as well as the transformation that the country has carried out in the last decade here.

Starting with a symmetric Internet rate of 300 Mbps at home for € 25 and with the possibility of reaching up to 1Gbps symmetric for business, in Andorra you will be able to be permanently connected. Also, the mobile network reaches 98% of the country's territory despite being in the middle of the Pyrenees, so that it could operate from anywhere in the country and at any time by hiring the internet on mobile. You can learn more about the Principality's telecommunications at the company's website, Andorra Telecom.

It is also important to make sure that you operate through a broker platform that allows you to have an account with residence in Andorra. For example, Interactive Brokers, Ameritrade, etc.

Physical and legal security

Andorra has traditionally been and throughout its history very outstanding for its war neutrality, its political, physical and legal stability and its pacifism. Staying neutral in all war conflicts has always been a priority of the country, which has more than seven centuries of peace. Not only that, but his no crime and criminality and its demilitarization they have always been exemplary for most countries in the world.

On the other hand, legal certainty is a principle recognized and protected by the Andorran Constitution  de1993, being thus guaranteed by its legal system and its institutions. Also, with the new reforms legal certainty has been reinforced of international investments in the Principality of Andorra with the liberalization of foreign investment and the negotiation of double taxation agreements.

Difference between trader and broker

Both a trader and a broker can fix their residence in Andorra, constituting a commercial company to develop their activity and obtaining a self-employment residence permit. However, the broker, acting on behalf of clients, must obtain an authorization from the Andorran Financial Authority (AFA), since its activity is an activity regulated and supervised by said authority. However, if the natural person carries out the trading activity with his own assets, he does not require any authorization. 

Andorra Insiders has already advised and established various similar trader and broker profiles in the Principality, and has the support of the best professionals in tax, commercial and regulatory law. Furthermore, the country is just now in a process of international economic opening that will bear fruit in the coming years. Do you want to take advantage of this situation and come now, or do it when the reforms have worked and it is too late? We have already made the decision, now is the time for yours. If yes, you can contact us here and tell us your case, you will receive personalized attention and information and comprehensive support.  

42 thoughts on “Trader en Andorra: los impuestos del trading”

  1. Hello,

    My name is Adrian,

    I would like to know how the fact of being a trader and operating with accounts funded by a company that is dedicated to it is taxed in andorra.

    I would also like to know if you guide traders to take the step of changing residence from Spain to Andorra.

    Thank you

    Reply
    • Hello Adrian.

      To answer your question, we would need some more information about your activity.
      Therefore, it would be better if you contacted us through our email, contact form or WhatsApp.

      Regarding whether we help traders to establish themselves in Andorra, of course. Like any other type of business that is feasible and attractive to carry out in Andorra. We have already dealt with many profiles of this type. In any case, it is better to treat it personally since each case has its peculiarities. You can contact us at contact@andorrainsiders.com same.

      Regards.

      Reply
  2. Hi.
    From what I understand, stock trading is not taxed, but CFD trading is.
    Spain is becoming impossible and I was considering going to Ireland, but being away from my parents so much makes me a little scared when they start to get older and need more help.

    Thank you. A greeting.

    Reply
    • Hi Hector, thanks for commenting.

      Indeed, contracts for difference, like most financial derivatives, do not imply ownership of the shares or representations thereof, which means that the exemption does not apply. In any case, the tax on income and capital gains is 10% with the first € 3,000 of income exempt, which is also quite attractive.

      Thanks to you and best regards!

      Reply
  3. Hello, so for a trader to apply for abitual residence, he does not need to form a commercial company, right? It's only for brokers, right?

    Reply
    • Hello david,

      No: both must form a commercial company if they only have that business model because it is the only way they have to justify their residence in the Principality of Andorra, except if the passive residence permit is obtained.

      In other words: although trading activities can be carried out as a natural person and with personal assets, in order to obtain a residence permit and self-employment in Andorra, it must be justified in this case through the participation and administration of a company. On the other hand, effectively, the broker activity can only be carried out through a collective investment vehicle and a legal entity.

      The fundamental difference between both activities is that broker activities, when managing third-party capital, must obtain a license from the Andorran Financial Authority (AFA), which controls and regulates these activities.

      I hope I have helped you, you can also contact us at contact@andorrainsiders.com.

      Thank you.

      Reply
  4. If you invest your money as a trader, is it necessary to create a company or can it be as a natural person?
    the benefits obtained as a natural person would be exempt from income taxes

    Reply
    • Hello Justo, thanks for commenting.
      As we mentioned to David, it can be done both as a natural person and through a partnership. Now, in order to obtain a residence permit and self-employment in Andorra, a company must be constituted, so if the only business model you have is trading, you must also create a company.

      I hope I have helped you, thank you very much.

      Reply
  5. Здравствуйте, думаю о переезде в Андорру, занимаюсь торговлей опционами. Какой налог на прирост капитала от опционных контрактов? Спасибо.

    Reply
    • Здравствуйте, прирост капитала и доход по опционным контрактам облагаются подоходным налогом в размере 10% для физических лиц, имея 3000 евро освобожденного дохода.

      Reply
  6. HELLO
    My question is, what tax treatment does the shares of companies listed on the Spanish market have in Andorra, which have been acquired, being resident in Spain and sold once residence in Andorra is obtained, how the capital gains obtained on the sale are taxed as well as the dividends obtained.
    Thank you

    Reply
    • Hello david,
      Well, it depends a bit on the specific case and its size, but in general, since you have sold as an Andorran resident, you have obtained the capital gains and returns as an Andorran resident, and therefore these income are taxed under the double taxation agreement between Spain and Andorra, which In the case of capital gains from shares LISTED on the stock market or if less than 25% of the total participation of a company not listed on the stock exchange is owned (usual case of trading), they are taxed exclusively in Andorra, either by personal income tax or by IS in case of legal persons.

      Reply
    • Hello Diego, all financial derivatives are taxed at 10% with € 3,000 exempt income. The exemption only applies to property or similar titles, assets that underlyingly represent ownership of shares and participations (that is, shares and funds). Thank you very much for commenting!

      Reply
    • Olá, very obrigado for commenting.

      A isenção does not apply based on the days in which an active was stopped, but rather the type of asset that was used in trucks. Assim, whenever forem used heights or heights of estates, it can be applied to isenção. However, Daily Traders generally use other different tools, such as CFDs, futures and other financial derivatives that do not apply.

      I hope it helped.

      Reply
  7. Hi! I have been operating in recent years with the Degiro broker and now that I have residency in Andorra, it turns out that it is not possible to operate with Degiro from here, as I am told from the broker itself, could I do it with Interactive Brokers without problems? If so, should I do it with the IB based in Ireland or from Luxembourg?
    Thank you.

    Reply
    • Hello, thank you very much for commenting.

      Indeed, Interactive Brokers is operating in Andorra, in fact most of our clients in this sector operate through this platform. Regarding the location of the payer, in general terms it is irrelevant, although depending on the case it may be interesting to assess it in tax terms.

      Reply
  8. Hello. I live in South America and my wife is Spanish, we plan to move there, but my job is as a trader in the American and European stock markets. If I set up a company in Andorra and operate with that company, the income from the purchase and sale of shares is not taxed, is it?
    But if I annually withdraw company profits for my living expenses in Spain, should I pay taxes in Andorra for that profit and then in Spain, considering that my personal residence is in Spain and my company is in Andorra?
    Thank you
    Frame

    Reply
    • Hi Marco, thank you very much for commenting.

      No, the exemption only applies to personal income tax, that is, to personal income tax. In the event of incorporating a company and operating through it, income would be subject to Corporation Tax, which has no exemption in this regard (they would be taxed at 10%). Of course, when receiving dividends from Andorran society as an Andorran resident, these incomes are also exempt from payment of personal income tax, with which the total direct taxation would also be 10%. On the other hand, you cannot have a company in Andorra and reside in Spain, I think your business is very large and you can maintain a considerable legal structure.

      Reply
  9. Hello good afternoon, I currently reside in Andorra, with a 10-year residence permit and I am interested in investing in the stock market, what should I do before I start investing and if you can advise me which is the best form or broker to use. I am interested in the American market in stocks and forex.
    greetings thanks.

    Reply
  10. Hello Andorra Insiders,

    Let's say I am a Resident of an EU country and want to relocate to Andorra to save taxes because I think taxation is theft and my country takes a lot of my money! I do not have a regular Job, i just live of my passive income, its called «privatier», i do not know if there is another term for it, basically someone who is rich enough to have the luxury of not working. I do not mean a pensioner or some pleabian who lives of state welfare.
    Lets say I have a liquid net worth of approximatly € 5,000,000, primarily invested into Stocks, mostly American, some Chinese stocks which give me Dividends every few months and i can obtain my cost of livings through these Dividends. Another part of my more speculative portfolio are «certificates» (not an etf) on cryptos like this one XBT Provider Ether Tracker Euro - A2HDZ2 ISIN: SE0010296582, are these liable to taxation in Andorra, if so why the hell? If a Bitcoin ETF is launched this year, will a Crypto BTC ETF be subject to taxation? Sometimes I do a few trades to manage my portfolio, a maximum of about 10-15 trades per year. So nothing close to a day-trader. Just managing my private funds, nothing special, just like a lot of people do. If i relocate to Andorra as a passive resident, (no working) will I have to open a company just to manage my private wealth? It seems crazy to me. In the country I am located the bank / broker manages my tax, its a flat tax on Dividends and Winnings (when sold) which is automatically pulled off by the bank and delivered to the every hungry socialist state automatically. Do Andorran Banks also offer this service of doing the tax work automatically or do I have to file for a yearly taxation sheet in Andorra and list every trade I do myself? It seems to me that the Andorran government in its wish to comply is making it harder and harder for high networth individuals to relocate in Andorra. I get the feeling that socialism is making its way to Andorra, too. The only other option would be Monaco, but the cost of buying a small shoe box flat there is astronomical and would slash away some of my wealth that otherwise gives me dividends. It seems to me that Andorran politics is always finding more «arguments» to tax everything, what was not the case a few years ago, sadly. Another thing i find scary in Andorra are the taxes on crypto assets, even in my socialist hellhole of a country, they are exempt of capital gains taxation if they are held for at least one year, same with gold, valuable cars, watches etc.

    I do not understand why Andorra is making things that complicated, I bet if you would tax all capital gains at 0% including crypto and crypto trading you would be a serious haven in the world for all people who are tired of socialism and looking for some more freedom and a serious option besides Monaco, at least for people who want to stay in Europe. I can understand if the country of Andorra takes capital gains on real estate speculators, to prevent cost of living to go crazy for the locals, but everything else with capital gains tax is just extortion. Banks and Fiat will be a thing of the past if the crypto spaces developes on like this, it would be time for little countries to adapt and welcome the future instead of fighting it with regulations and obscure taxations, of course all in the name of security and saftey and anti money laundering, sure… Sadly Andorra does not seem to have good libertarian politicians like Marc Forné Molné anymore, who wanted the state to be small and prevent taxation of its inhabitants.

    My main question can I relocate to Andorra as non working «rich» and manage my protfolio without creating a company to do so, and can I pay 0% tax on dividends and winnings because I do not own more than 25% of the shares. Also will I be taxed on crypto «certificates» like the above mentioned Ethereum certificate held in my portfolio? And last but not least, will I be taxed on «physical» crypto if I hold it more than one year? The main «Open Sesame» to relocate to Andorra for a non working EU- Citizen is to invest minimum € 400,000 in real estate and € 50,000 in some Andorran government bond, is that right? Otherwise do i have to proof that i got enough money to not be a pleabian living on government cost? Will a Statement of my Bank / Broker with the amount of cash and stocks held on my name be enough / sufficient to proove that i am not a pleabian?

    I will end this rant on a quote from Ben Franklin, "Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety."

    Thank you and greetings Torben

    Reply
  11. Kudos for this site! Will consider your service.

    Q1: Crypto trader pays the same taxes 10%? (assume that yes but re-checking)

    Q2: How income is being counted for taxes? By 1 January equivalent in Eur compare to a year ago? Or each trade result counts as profit / loss and summarized on the end of the year? Which part of crypto trading activity exactly is taxable? Is conversion from one crypto coin to another considered as profit or only when you sell your crypto to fiat (EUR or USD), or only that part is taxable which one withdraws to the Bank in Fiat currency (EUR or USD) on the Bank account ?

    Q3: If company formation indicates services like analysis, consultancy, IT development, but the owner is also trading crypto from time to time (not the daily trades, but maybe once a month couple of trades) He can pay taxes from Company and personal taxes from trades both in Andorra only if he is a Tax resident in Andorra himself and not only his company, right? If so, the question is: Can passive residency give personal taxation in Andorra as well, or only Company will be taxed in Andorra but the personal income of the owner will be taxed not in Andorra?

    Q4: What is the minimum requirement for a person who gets an income in crypto trade to have his personal income to be taxed in Andorra.

    Q5: Is it obligation to register self-employment as crypto trader if you trade occasionally?

    Q6: Are there crypto-friendly Banks in Andorra? If not, which banks Andorra residents can use to withdraw money from crypto trading platforms to spend in Andorra?

    Reply
    • Hi, thank you for your questions and comment. Answering them:
      - Q1: Yes, although there is a crypto-specific law coming, right now, through a binding consultation, the public administrations have ruled that cryptocurrencies are listed as one more asset, that is, at 10% on capital gains and yields with 3,000 euros of exempt income (applied over personal incomes).
      - Q2: It's the fiscal year that is counted, so you have to track all the operations of the year and offset profits and losses to apply the tax over the net gains.
      - Q3: Of course, one you are andorran resident, you could manage your own heritage and capital as you want, and that includes investing in crypto. You will pay 10% in concept of corporate tax over the incomes of your business and 10% with € 3,000 exempt over your crypto personal investment incomes. Corporations and individuals are two things apart and different. Your company is taxed where is it and you are taxed when you are, and both sites do not necessarily have to match.
      - Q4: As I sais, if those are personal incomes, € 3,000.
      - Q5: No, you are managing your own heritage and capital, that could not be considered as an economic activity.
      - Q6: Generally no, they aren't. I mean, andorran banks are strict and seek to avoid the risks of money laundering and money laundering at all costs. In this sense, for them to correctly accept cryptocurrency capital, the traceability of the funds must be clear and transparent. If you trade through reputation platforms like Binance and Coinbase you will have no trouble.

      Reply
  12. Hello Andorra Insiders,

    I am thinking of moving to Andorra. I am a nutritionist, and I understood that it is one of the professions for which I could be exempt from being withheld € 15,000 for entering Andorra. But even so, I also trade stocks on the American stock market.

    That said, could I be exempt from the € 15,000 for being a nutritionist and at the same time as I have created a company for it, to be able to operate on the stock market as a natural person and thus benefit from the 0% of taxation on the sale and purchase of shares?

    Thanks in advance for your reply

    Reply
    • Hi Jorge, thank you very much for commenting. As we told you in the mail, first of all when you work as a liberal professional, no company is created, you work as a natural person. As a nutritionist it is possible that they will reject the authorization of the government, but it can be tried.

      Second, both in the case of working as a liberal professional or forming a company, you can operate with your own assets as a natural person as you wish, including the sale and purchase of shares that are exempt from Andorran personal income tax. It should be noted that it only applies when the operations are really with shares or participations in regulated collective investment funds.

      Reply
  13. Hello Andorra insiders,

    I am considering a change of residence to Andorra. On the one hand I do stock market operations with my own capital, on the other hand I am an employee of a Spanish company with indefinite telecommuting so I can live wherever I want.

    My question is, in this case how could I do it, would I also need to create a company? Is there any incompatibility because it is a Spanish company that pays the payroll?

    Thanks, I think you guys do a good job.

    Reply
    • Hi Luis, thank you very much for commenting.

      Indeed, in order to obtain Andorran residency, you must become a qualified professional if you can do so (being at the disposal of at least a university training that allows you to practice with a liberal profession under this legal status) or set up a company through foreign investment. In this way, he would obtain a residence permit and self-employment in Andorra. As for the rest, the relationship with your company should stop being purely labor and become commercial, either with you as a natural person or with your company in the second case.

      We try to do our best 🙂

      Reply
  14. Hello, thank you very much for all the valuable information you provide.

    If I dedicate myself exclusively to cryptocurrency trading, would it be possible to form a structure that would make passive residence possible? The truth is that I am not very attracted to living in Andorra for more than 90 days a year.

    Along the same lines, if I spent 5 months a year in Spain in a home of my own, would I run the risk that Spain would try to appraise me? I know that the official rule says that if you are in Spain less than 6 months a year, in principle you do not have to pay taxes there; However, I have also read that if you have property in Spain, they can use that as an excuse to squeeze yourself, claiming that the property + the stay of 5 months a year make Spain the true country of residence for that year.

    Thank you very much in advance for your help 🙂

    Reply
    • Hi Jaime, thanks for commenting.

      First of all, you should know that as a passive resident you can manage your own capital as a natural person however you want. Thus, you can invest in cryptocurrencies without any problem.

      Regarding the second question, yes, of course, it involves a risk. In principle, and if it can be demonstrated that you have actually spent less than 6 months in Spain and more than 90 days in Andorra as a passive Andorran resident, you are a tax resident in Andorra. However, it depends on these two previous points and on the other hand, although the case would theoretically be resolved in its favor, the cost is worse in terms of time and resources.

      In conclusion: to reside in Andorra you have to settle and live in Andorra. No more. Looking for tricks means exposing yourself to unnecessary risks of all kinds. It is advisable for passive residents to spend the year in at least three different countries for a long time, so that it is clear that the tax residence corresponds to Andorra as a passive resident.

      Reply
  15. Bona takes.
    Did you invest in fons indexats and ETFs com tribute?
    I know that to Spain the transfer or sale of fons indexats is not taxed, so I understand that Andorra is also not taxed, but, in the case of ETF, how does it work?
    Moltes gràcies.

    Reply
    • Hi Davos, thank you so much for commenting. The legislation specifies that the exemption applies to shares and participations in fons cotitzats. Així doncs, it does not matter the type of funds that followed, if it is an investment fund or shares of a listed company l'exempció applies.

      Reply
    • Hi Frank, the law says that to all the incomes obtained of capital gains from stocks or exchange-traded funds (if the amount owned by the fund is less than 25% of the total) applies the exemption of the income tax, so they are not taxed.

      Reply
    • Hi Joseph, specifically the exemption applies to «Capital gains or losses obtained from any shares or participations in any collective investment organization regulated in the regulations applicable to these organizations». Thus, as a priori, ETFs are collective investment schemes, the gains obtained through those instruments apply for the exemption and therefore are taxed 0%.

      Reply

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Andorra Insiders is a professional legal, tax and accounting services platform, specialized in creating companies and establishing people in the Principality. 

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