The retirement in Andorra has many advantages compared to other countries. And it is that in addition to the profiles on digital businesses, also those of individuals or groups of individuals with great wealth who want to retire and not do business are among the most common profiles of new residents in the Principality. One of them is that of retirees or retirees, people who, after having completed their professional stage, seek peace, tranquility and non-confiscatory taxation to spend the rest of your days.
A retired senior citizen profile can obtain the residence permit in Andorra through the authorization of non-profit residence. This residence permit does not grant the right to work in Andorra, but it does grant the right to fiscally reside in the country. Therefore, unlike active residences, it does not require a contribution to the Andorran Social Security Fund (CASS), although it requires that people who come to reside have the appropriate private health coverage. Further, is compatible with the perception of the retirement pension of the country of origin.
The problem, yes, is that Since the last modification of the immigration legislation, to obtain passive residence in its general form, €600,000 must be invested in Andorran assets to be able to obtain it, which is a very high amount and therefore not accessible to everyone. On the other hand, to obtain non-profit residence in other ways, evidence of relevance (sports, artistic, scientific or international) must be provided to demonstrate that the person in question is of interest to the Principality of Andorra.
Retirement in Andorra from Spain
Thanks to social security agreement between Andorra and Spain, a person who obtains a residence permit in Andorra can retire in the country, even if they receive their pension from Spain. This, along with double taxation agreement which we already talked about here allows anyone to spend their retirement in the Principality maintaining the pensions received from another country and being a tax resident with all the associated rights.
A) Yes, You can receive pensions from Spain as a non-resident and pay taxes on all worldwide income in the Principality (both capital and others) and continue to be entitled to the benefit even if you live in Andorra. This is also the case with France and Portugal, since there are numerous agreements that allow it to be done with guarantees, although We always recommend professional advice about it for a particular case to avoid unpleasant surprises.
Tax advantages of retirement in Andorra
The main tax advantages due to the low taxes in Andorra that retirees enjoy when residing in the country are:
- (i) The non-requirement of wealth tax.
- (ii) The non-existence of inheritance and gift tax.
- (iii) The low taxation of the income that you can obtain from your assets (maximum rate of 10%, in some cases total exemption, depending on the type of income) and on the income received.
In other words, the main tax advantages of retirement are built on the pillars of tax planning and the option economy. Thus, each profile presents a different heritage, and therefore, tax advice with international tax experts is essential prior to transfer. Sometimes it may not be interesting to reside in Andorra, at other times it can be extremely lucrative with significant tax savings. Always depending on the patrimonial structure, the type of assets held and the legal category of the income to be received.
Also the estate succession must be planned seriously and with a good advisory and consultancy service. Again, the type of assets will mark the tax savings, as well as the participation in the planning scheme of the heirs and legatees. In addition to the type of assets and their location, tax residence is, in retirement cases, a determining factor.
The fact that capital returns are taxed at a maximum of 10% has also implied the arrival of many traders to Andorra, and also investors long-term "value investing" since doing it from Andorra is a advantage enormous. For example, capital gains derived from the purchase and sale of shares and funds are exempt to pay Therefore, to manage your own personal capital even if it is not professionally (as is the case with retirees) this is also very attractive.
The best healthcare system in the world
For a smooth and easy retirement, one of the essential points is health. Upon reaching the third age, health problems become more frequent and severe and it is very important to take proper care of them in order to maintain a happy and active lifestyle. Have the guarantee of being able to access quality, safe and unsaturated healthcare is a relief for a retiree.
Just like we explain in the article dedicated to it that you can read here, Andorra can boast of having a tremendously competent and solid health system, declared as the best in the world according to many rankings and important scientific journals. In addition, and as we will explain later, the fact that retired people establish themselves in Andorra through passive residence means that they do not have to contribute to social security.
This is due to the fact that, as its name suggests, people already in retirement and with this permit are passive people in terms of exercising economic activity and their career in the labor market, and since the obligation to contribute to social security is only for people of active age and who are working (self-employed or employed) this does not apply to them. This implies that with a private insurance for passive residents of disability and old age can be maintained with the best possible medical care.
Specifically, there are many insurances for passive residents that They include care in the best centers, clinics and health professionals, and also in many different countries. so that wherever you go you have the certainty that you will be attended to with guarantees. This makes retirement in Andorra even more peaceful than, as we will explain in the next section, it already is.
Physical and legal security: guaranteed peace of mind
The null crime has always been a very remarkable and envied feature of Andorra. With a almost null crime and criminality, the few cases of crimes are usually easy news. Its location and orography, embedded in the middle of the Pyrenees, also contribute to this issue. And what more tranquility than living in a mountainous area where more than 90% of the extension is forest territory. we already told it in this article on crime.
Not only that: anyone who has lived in the country or has ever visited it knows first-hand that it is a very quiet country, where nothing ever happens. when we explained in our article about moving to Andorra who is interested in living in Andorra and who is not and the benefits, we mentioned that it is not a country for those people who like to party and night, since the Principality at night is a fairly quiet country. In the case of retirement, it is a great advantage.
Furthermore, in Andorra there are not many young people or much university environment, since due to the few options of tertiary education (and especially university) available to the andorran educational system young people go to study in Barcelona or Toulouse after finishing high school in the country. Thus, peace of mind in this regard for retirees is guaranteed.
The clubs and pubs in the country are quite hidden and there is never a scandal: They are very discreet. The large bottles are prohibited and persecuted and are never made. Where there is more movement in this sense is in Pas de la Casa and especially in the winter season, since tourists and young foreign seasonal workers, skiers, etc. accumulate. and events are held for this purpose. Beyond that, the capital is a daytime city.
On the other hand, what about legal certainty? Have the savings in a country that before it was a tax haven also has its advantages. Specifically, in Andorra there is strict respect for private property, foreign capital and the privacy of property owners. Of course it is impossible for there to be occupations of other people's homes and people behavea, which is perfect for retirement.
But aside from that, if they have something good Andorran banks is that, despite being outdated and not very technological due to the recent international opening of the country, they once again have a long history caring for the capital of foreign persons and maintaining their privacy and integrity, something that, together with the current strict requirements against money laundering and prevention of terrorism, ensures that your capital and assets from your entire working life are well protected.
Nature and mountains at their best
Earlier we have already named 98% of the territory of 469 square meters that make up Andorra are forest lands that are not part of civilization: they are pure mountains. But it is also that there are areas of the Principality that are authentic idyllic paradises where spending retirement must be the best approximation to happiness in old age. For example, they can look for photographs on the internet about the Incles valley, the Madriu-Perafita-Claror valley or the Sorteny natural park, three of the most remarkable places for their beauty in the country.
In spring, which is when the vegetation is greener and all the meadows are in flower, these are landscapes that are not only natural but also paradisiacal.. Finally, Ordino, which is considered the most beautiful town in Andorra, also stands out for its enormous beauty as a traditional mountain town, with mountain tourism and great respect for the environment and nature that surrounds it. Perfect for a retiree. Also, Andorra cares a lot about its nature and environment, because it is a very touristy country and the landscapes must be maintained over time.
Example of peace and neutrality
In addition to the null crime, the leafy history of political neutrality in Andorra it is also a more than relevant factor for a retiree when deciding on this country for retirement. And is that the Principality has been in political neutrality for more than seven centuries, in spite of the numerous world-wide, European and particular warlike conflicts of the neighboring countries, especially France and Spain. This was stated by Xavier Espot, the current Prime Minister, at last year's Peace Forum.
Neither the succession wars, nor the Napoleonic wars, nor the various coups d'état, not even the Second World War was able to shake the balance of Andorran pacifism. A clear example of flight from full-blown war and political conflict.
In Abast we have professional advisers from the Principality of Andorra, experts in tax planning and with extensive experience in the field. If the Principality is considered as an option for your retirement, doalo with professional assistance and carry out safe and lasting planning, both for his retirement and for his subsequent succession. In addition, we assist you from the first moment until your effective transfer, guiding and advising you on the services and activities that the country offers.