Moving to Andorra: Requirements and benefits

For whom is it worth settling in Andorra?

If you are searching the internet and reading about moving to Andorra, surely you already know this small country in the Pyrenees quite well and are aware of its greatest advantages. Surely you will have marveled at its majestic mountains, its quiet towns and its small but welcoming, charming and very well-cared-for capital. You may have noticed that the country is very dedicated to tourists and visitors and has many services.

The best spas, its exquisite gastronomy, cheap shops with lavish shop windows and duty free, viewpoints with landscapes that take your breath away, paths that respect nature, ski resorts with endless slopes and prepared for the greatest experts, beautiful mountain passes of asphalt, tracks and trails... Being a country that receives 8 million tourists and visitors a year despite its small size and few infrastructures, it is obvious that they seek to treat leisure people well.

However, moving to Andorra is not for everyone. Precisely this treatment is so focused on tourism because the country falters in other points. Agriculture is very limited, there is hardly any industry and physical commerce is made difficult by its rugged terrain, which increases the distance between people and prevents social connection. This is aggravated by its climate which, although dry and relieving, is also cold, especially in the towns and higher altitude locations.

Like countries like Switzerland, with which Andorra shares many characteristics, in order to compete and survive, Andorra has had to look for alternatives that would increase its competitiveness against other countries. That is why, until two decades ago, it was an opaque and self-sufficient tax haven: because it benefited from being an offshore financial refuge and from smuggling products with low taxes to its neighboring countries, although it also exploited its tourist side.

After starting your transformation and international opening, the Principality has sought to promote, on the one hand, the tourist part of its advantages and, on the other hand, modernize its institutions, diversify its economy and open the country to people, capital and foreign talent that can invest in Andorra , and people and especially entrepreneurs have started to move to the Principality permanently. But its history and characteristics mean that not everyone can settle in Andorra.

For whom it is NOT relevant to settle in Andorra

Before explaining who would find it profitable and interesting to settle in Andorra and reside here, it is better to indicate for whom the Principality is certainly not the best option. At the end of the day, all countries have their counterparts to take into account and with the establishment it is possible to gain in some aspects (advantages) and lose in others (disadvantages). It is not highly recommended to relocate to Andorra for the following:

  • People who like crowds and big cities. This principality is a country of only 77,000 inhabitants, and its capital has just over twenty thousand. If you are used to living in the city, Andorra may be a bit short for you and overwhelm you for being small.
  • People who really like partying and social contact. Andorra is a quiet and welcoming country. Although there are traditional holidays, you will not find much social movement, nor large discos and trendy pubs. In addition, there are few young people in the country because those of university age usually go to Toulouse or Barcelona to study. Where there is more party is in Pas de la casa and it is not to rave about, far from it, never better said.
  • People who don't really like the mountains. If you can't stand living in a mountainous area, forget about moving to a country nestled in the heart of the Pyrenees. Andorra is all mountains; absolutely everything. In fact, there is almost nothing that is flat in the 469 km2 that occupy its territory, of which the 98% is forest and pure nature. It is true that it has impressive landscapes and three national parks, but they are all mountainous.
  • People who can't stand the cold, even if it's just a little. It must be admitted that the cold in Andorra is very bearable because it is not very humid and the radiant sun heats up a lot even if the temperature is low, unlike, for example, northern Spain such as Navarra, Asturias, the Basque Country and in general the communities Cantabrian. But even so, it is somewhat cold in the winter months. For those who do not tolerate the cold the best parish to move to Andorra is Sant Julià, because the town is at 900 meters of altitude and it is not very cold. But still some cold passes.

How to move to Andorra with an employment contract

One of the ways to settle and move to Andorra is through an employment contract by an Andorran company. If the objective is to obtain a temporary contract and spend the season in the country, it is relatively easy to do so and reside in the Principality for a while, but you should know that it is only a "license" to stay in the country for work reasons and, In general, it does not grant the right of fiscal residence.

Regarding obtaining labor contracts and indefinite residence permits, it is difficult and complex because companies have many restrictions in this regard, since the Andorran labor market prioritizes the hiring of already residents, it is difficult to find a good employee position and the processing they find it expensive. For this reason, the residence permit is normally requested before hiring a person, unless it is an extremely brilliant resume, an emergency position or a parastatal entity.

The majority of people who relocate as temporary, either do so to live new experiences and enjoy the country for a while, or with the hope of obtaining a permanent contract in the future that allows them to settle permanently and throughout the year. . This is feasible since after several years hiring a person as a temporary worker, a company has greater facilities and fewer restrictions in hiring them for an indefinite contract, although this will depend on the company in question.

However, if the objective is to save and generate a little money, we recommend understanding what the cost of living in Andorra in order to be able to compare with your salary and know if it is worth moving to Andorra or not. This will also depend on your salary, your pace of life, your rent and other costs associated with the very fact of living.

Why move to Andorra? Who's interested

Let's make it clear from the beginning: moving to Andorra is a great option especially for all those who have a lot of independence regarding the professional activity they carry out or their business. That is, especially for digital entrepreneurs. Why? There are many reasons for this. By independence we refer here to different types and levels, all of them very important to assess whether establishment in the country is appropriate. Although they seem the same type they are not, but they are interdependent:

  • First of all independence of the location where the business or the entrepreneur is. If to carry out the professional activity it is necessary to be in a city on a mandatory basis, it is not very feasible reside in Andorra. For example, it is impossible for an electrical installation engineer in Seville who has to go to physically operate them to be in the Principality because he depends on the location (Seville) to do his job.
  • Secondly, customer independence. For example, an agency that offers accounting or consulting services in Zaragoza does not depend so much on the physical location except occasionally, but given that it has already generated a network of clients in the city on which it strongly depends, moving to Andorra is a double problem, because on the one hand it would have the entire center of economic interests located in Zaragoza (potential conflict of tax residence) and on the other hand it would have to create a new network of clients in the Principality.
  • In third place, independence of immovable physical assets. For example, if to carry out the professional activity you depend on a warehouse currently located in Valencia, or to record the content you have had to invest thousands of euros in a rented studio or property that you cannot give up, that is going to complicate the establishment and move to Andorra. Note that this is independent of whether the product offered is physical or not, hence the study example. Although a person is a youtuber and therefore can create videos from anywhere in the world, if they need a real estate studio already acquired outside Andorra to carry out their activity, establishing themselves in the country is very complicated.
  • In fourth place, independence of physical goods or products. If the activity consists, for example, of selling merchandising all over the world, which I must manage entirely in the business to be transferred, moving to Andorra can be complicated or, if you do, this activity may not be profitable. What Andorra is not within the European Union, cannot accommodate Registry of Intracommunity Operators (ROI) and therefore it will have to support the management of indirect taxes in each country in which it has clients, and also manage logistics and the corresponding customs processing.
  • In fifth place, independence of physical inputs. In a similar way to the previous section and precisely due again to customs management because the Principality of the European Union is not part of it, if the business or activity to be established depends on the massive importation of physical products from suppliers located abroad, customs procedures and logistics would greatly complicate being able to transfer the business and move to Andorra.
  • In sixth and last place, independence of very particular human capital. If you have a company or a business with several or many employees and you want to keep those same employees hired as an employee in Andorra, either because they are the most suitable people and it involves very specific personnel or simply because the company ultimately after all, it is a team, establishing in the Principality would either be expensive or impossible, since the Andorran labor market and legislation are very restrictive and particular and prioritize Andorran residents in hiring, with which it is possible that some of them could not be carried out.

Obviously it is not necessary to be completely independent in all these factors, but they are simply a way of evaluating the convenience of the transfer. The more independence of these factors, the better.. And if you have little independence of a specific factor, it is better to have independence in all the others. As we can see, the restrictions on the international movement of people, goods and capital from Andorra and the handling of customs significantly reduce the profitability and efficiency of certain activities.

One possible option is the subcontracting of what cannot be established in the Principality. For example, in the case of the employees in the last example, the previously employed could become self-employed residing in the country of origin and be billed for their services performed independently, or maintain a company in said country of origin to perform the functions that cannot be relocated and another in Andorra for the functions that can be relocated, although this increases costs due to the legal structure that must be maintained.

 

Digital business but not only

That is why activities with and digital services are the most indicated and the ones that most allow moving to Andorra. Digitization is in fashion today. The people who carry them out can create a company, open their business and establish themselves in the country much more easily than other professionals. Youtubers, streamers and content creators, online marketing businesses, computer and graphic design activities, creation of web and mobile applications, financial traders and investors, cryptocurrency businesses are a typical example.

Although these activities are typical and very clear examples of people who can relocate in Andorra, there are other cases in which a fit in the country could also be analyzed. To cite a few examples: copywriters, translators who work remotely, remote teachers, writers who sell books in digital formats, authors of online courses and academies, remote consultants, etc.

However, it can also be interesting for those people who, although they require a physical location to carry out their activity, their activities, their products or services are intangible. We are therefore talking about artists and actors, elite athletes, managers of multinationals who travel all over the world, etc. Of course, as long as they can justify their activity and/or residence in Andorra with the consequent requirements.

Lastly, another client profile or case for which moving to Andorra may be attractive is that of retirees with good capital. Thanks to the non-lucrative residence permit, if a person wants to spend their last days of quiet retirement in the Andorran mountains, they can do so without any problem. We explain more in our article on the ways of living in Andorra.

Having a capital of more than €400,000 to invest in Andorran assets, a retired person can settle in the country by investing that amount in assets of the country, for example buying a home or real estate. Thus, only by fulfilling certain requirements, among which is staying in Andorra for more than 90 days, could you enjoy the country's landscapes and pay your income and capital gains under Andorran taxes.

Thus, below we show articles on four cases compiled from the most frequent types of clients in Abast Global and in general from Andorran residents. In them we show the advantages, requirements and procedures necessary for the establishment and installation in Andorra. What type of Insider is your case? Tell us here and we will help you move to Andorra.

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