One of the standardized client types in Abast Global (or Insiders), is that of broker. For all those people who base their professional and/or business activity, acting as a trader with their own capital, Andorra is a very attractive destination. Especially trading frequently, but also if it is done with other assets. The possibility of carrying out the activity of advisor and financial analyst and wealth manager regardless of physical location, also makes it possible for 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.
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. Therefore, investing in the stock market in Andorra is very attractive.
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.
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. Thus, specifically for a trader or broker, who carry out low-participation operations, equity transactions are usually tax exempt, a 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 earnings are taxed between 19% and 26%.
On the other hand, assets other than shares and investment funds are taxed at a maximum of 10% on capital gains, being therefore 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.
Thus, although the exemption does not apply to forex traders or the foreign exchange market, nor in general when carrying out operations with financial derivatives and other more complex instruments or assets, one can benefit by keeping funds in their portfolio that carry out the operations that is intended to continue.
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.
Invest in the stock market from Andorra
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 trader, financial analyst or other who does trading operations at home 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.
Thus, investing in the stock market from Andorra is not only attractive and has low taxes, but it is also quick and easy to do and trading platforms can be accessed efficiently. It is also important to make sure that you operate through an online broker that allows you to have an account with residence in Andorra. For example, Interactive Brokers, Ameritrade, etc.
Starting with a fee of Internet at home of 300 symmetrical Mbps for €25 for an individual person and with the possibility of reaching up to 1Gbps symmetrical for businesses, in Andorra you will be able to be permanently connected. What's more, 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.
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.
It is important to emphasize and make it clear that, in the case of brokers and in general, as long as it is about third-party capital management activities, financial advice and in general those related to collective investment schemes are regulated by the AFA and, furthermore, this regulation is quite complicated and in general only within the reach of large institutions such as investment banks. Fortunately, certain activities such as sports betting and other games of chance or the management, advice and other activities of cryptocurrencies they can be made and interpreted in such a way that they are not subject to regulation. In any case, each case must be analyzed separately.
At Abast Global we have numerous similar trader profiles already advised and established in the Principality, and have the support of the best professionals in tax, commercial and regulatory law. In addition, Andorra is right 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 you want to do it when the reforms have worked? We have already made the decision, now it is 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.