Expatriate Andorra: benefit from tax advantages while securing your assets
Expatriation to Andorra: how to expatriate to Andorra and benefit from the Principality's tax advantages for entrepreneurs and high net worth individuals.
What if the borderline between tax pressure and wealth serenity was just a few kilometers from the Pyrenees?
More and more business leaders, digital entrepreneurs and investors are turning to a stable and perfectly legal solution: expatriation to Andorra.
Andorra, this small state nestled between France and Spain, offers competitive tax conditions and a privileged living environment for those wishing to expatriate while securing their wealth and assets just a few hundred kilometers from major European metropolises such as Barcelona or Paris.
In this guide, we will look at the tax opportunities offered by Andorra but also the conditions for a successful expatriation, the steps to take, the mistakes to avoid and the high-yield wealth strategies in compliance with French and international law.
If you'd like to secure, pass on or simply enjoy your assets with the support of Engage, click here to book a strategic meeting with one of our team of advisors.
A French and Belgian environment that discourages high net worth individuals
France and Belgium are among the countries with the highest tax burden on wealth and income in the OECD.
A few figures illustrate this reality:
- Income tax at over 45%.
- Taxing capital and wealth income up to 30%.
- Tax on gifts and inheritance between 30% and 45%.
- Confiscatory real estate wealth tax.
Against this backdrop, many company directors and wealthy families are legitimately asking themselves: how can they protect their capital over the long term and prevent it from being eroded?
Expatriation to Andorra is the answer for those wishing to avoid ineffective and dangerous tax avoidance strategies, opting instead for a tailor-made, tried and tested legal and tax solution, validated by specialists in both your home country and Andorra.
Contact Engage by clicking on this link if you would like assistance with your tax expatriation to Andorra.
Why Andorra? A stable, secure and tax-efficient residence
Contrary to popular belief, Andorra is not a tax haven.
Andorra's compliance is confirmed by its network of tax treaties signed with countries such as France, Belgium, Spain and Luxembourg.
This does not prevent Andorra from offering particularly attractive tax regimes for anyone wishing to expatriate in order to preserve their assets and optimize their income, but also to benefit from an idyllic living environment.
- Andorra's tax system is simple, easy to understand and particularly advantageous. The income tax rate never exceeds 10%, with a total exemption on the first 24,000 euros and specific schemes that further reduce the effective rate in many situations.
- There is no wealth tax, inheritance tax or gift tax, making it an ideal framework for anticipating the transfer of assets or structuring income efficiently.
- Dividends paid by an Andorran company to an Andorran tax resident are tax-exempt, and capital gains tax is optimized according to the nature and length of ownership of the asset.
- For entrepreneurs, the corporate tax rate is capped at 10%, and social charges (employee and employer combined) are 22% of gross salary.
- Corporate taxation is also competitive, as the default rate is 10% , which can be reduced to 0% by the application of special tax regimes (such as for companies whose purpose is exclusively to hold shares in subsidiary companies).
- By taking advantage of the provisions of tax treaties with Andorra, we can strategically structure your assets to optimize taxation and avoid erosion or confiscatory taxation.
The Andorran legislator has created a legal framework that imposes rigorous management of public finances on the Andorran government.
By settling in Andorra, you'll benefit from a stable tax environment and legal certainty, allowing you to plan for the long term and look forward to a worry-free expatriation.
To enjoy the benefits of Andorraa real expatriation is mandatory.
But Andorra has a lot more to offer than just tax:
- Andorra is anchored in the Pyrenees (close to Barcelona, Bordeaux and Toulouse), making it an extraordinary playground for sports and leisure activities in one of the safest environments in the world, where crime is virtually non-existent.
- Boasting a very privileged climate, dry, sunny and temperate, Andorra is a unique island of dynamism in the Pyrenees thanks to its 9 million visitors a year who, without breaking the calm of its capital, enable the Principality to offer a rich palette of stores, restaurants and tourist attractions.
- Andorra offers efficient public services on a human scale, its medical and hospital facilities are at the cutting edge of innovation, and its school system is surprisingly well-stocked for a small country like Andorra, with French, British, Spanish and Andorran educational centers (private and/or public).
- Andorra is also home to an expatriate community (especially entrepreneurs) from all over the world, as well as a strong French-speaking community, enabling newcomers to integrate quickly and naturally.
Case study : Antoine, tech entrepreneur, opts for optimized expatriation
Initial situation
Antoine, 42, is co-founder of a French scale-up recently valued at €60 million. After a major fund-raising campaign, he is planning a partial sale of his shares. He would like to :
- Reduce the tax burden on capital gains,
- Pass on part of the assets to your children,
- Leave Paris and enjoy a more peaceful environment.
ENGAGE diagnosis
- Unrealized capital gains on shares estimated at €12 million, with a minimum French tax rate of 30% (flat tax).
- Complex transfer of ownership in France due to high taxes.
- Dematerialized professional life, compatible with expatriation.
Proposed solution
- Expatriation to Andorra, with effective change of tax residence.
-Creation of an Andorran holding company to own the company's shares.
- Anticipate the sale after expatriation, while respecting the tax-free period.
- Establishment of an Andorran inheritance pact, allowing for an early, tax-free succession.
Results
- Tax savings of nearly €2.4 million on capital gains.
- Passing on to your children without tax or duty.
- Move to Andorra la Vella, bilingual schooling for children.
- Full support from ENGAGE on tax, legal, banking and real estate issues.
Contact Engage by clicking on this link to book a strategic meeting with an ENGAGE consultant.
8 key steps to a successful expatriation with ENGAGE
Step 1: Wealth and tax audit - The foundation of your strategy
A successful expatriation begins with an overall diagnosis of your assets and financial flows.
It's not just an accounting snapshot, but a genuine strategic analysis:
- What are your assets (real estate, financial, professional)?
- Where are they located?
- Are they held directly or via a holding company, SCI or trust?
- What income do they generate and in which jurisdiction are they taxed?
- What is your current exposure to tax frictions (exit tax, capital gains tax, inheritance tax)?
Practical tip: take some time to draw up an inventory of your assets yourself.
A simple Excel table with three columns (type of asset, value, type of holding) is already an excellent working basis.
This audit will enable you to :
- Identify risk areas,
- Measure the tax opportunities offered by Andorra,
- And prepare for your departure with peace of mind.
Step 2: Legal and strategic feasibility study - Secure before you act
Every expatriation is unique.
The feasibility study allows you to compare your life project with the legal, fiscal and practical realities:
- What is your nationality and current tax residence?
- What tax treaties apply between your home country and Andorra?
- What deadlines must be met to avoid double taxation?
- What legal or tax risks could compromise your project?
The aim is to ensure that your departure is compliant and to avoid any reclassification by the tax authorities in your country of origin.
Step 3: Determining your residency status in Andorra - Choosing the right entry point
This is the administrative aspect of residency.
Because when you come to Andorra, the default immigration status is that of tourist, which means you can only stay for 3 months at most.
You therefore need to obtain an administrative residencepermit in order to settle in Andorra and stay for more than 3 months.
In Andorra, there aretwo main ways to obtain a residence permit:
- The passive house :
- Ideal for investors, annuitants or high net worth individuals.
- Based on asset investment criteria (housing, holding company, life insurance).
- Does not involve working in Andorra.
- Active residence :
- For entrepreneurs, managers, professionals and employees.
- Involves setting up a company or doing business in Andorra.
- Offers strong local recognition and an economic base.
It's vital for your expatriation project in Andorra to choose the right modality to meet all the conditions and build on a foundation of rock-solid stability.
ENGAGE can help you analyze which status best suits your personal, professional and financial objectives.
Tip: the choice of status is not set in stone. It can evolve with your life trajectory and your investment projects.
Step 4: Compliance and departure preparation - Anticipation is security
Leaving your home country is more than just packing your bags. It's a legal and fiscal process that needs to be carefully organized:
- Closure of your tax establishments (tax domicile, accounts, local structures).
- Organization of the transfer of your vital interests (family, assets, business).
- Drafting and signing of preparatory deeds (assignments, donations, covenants).
- Clear communication with the tax authorities in your home country.
These steps secure your departure and prevent any attempt at tax requalification.
Step 5: Creation of Andorran patrimonial structures - Optimize and protect
Andorra offers a flexible and secure framework for organizing your wealth. Depending on your profile, ENGAGE can structure your strategy around :
- Holding companies to centralize your holdings.
- Wealth management companies for your financial income.
- Asset management companies for your real estate.
- Inheritance agreements or gifts to anticipate the succession.
The aim is twofold: to optimize your cash flows for tax purposes and to protect your assets legally.
Tip: setting up an Andorran company can also be used as a lever to meet the "center of economic interests" requirement for tax residency.
6th step: Obtaining your residence permit in Andorra - The decisive step
Obtaining your tax permit in Andorra is a formal process, but one that can be streamlined with the support of a specialized firm. ENGAGE can manage it for you:
- Putting together your residency file .
- Mandatory bank deposit (minimum €50,000 at AFA).
- Housing search (rental or purchase).
- Taking out local health insurance.
Our mission: to simplify your procedures and guarantee you a smooth, fast and indisputable installation.
Step 7: Becoming an Andorran tax resident - Securing your status and preventing residency disputes
Obtaining your residence permit for Andorra is only the first step.
To really benefit from the advantages of the system, it is essential to become an Andorran tax resident within the meaning of domestic law and international tax treaties.
Andorran domestic law criteria
Andorran law sets two alternative conditions . You are considered a tax resident if you meet one of the two conditions:
- Stay in Andorra for more than 183 days in a calendar year (occasional absences are tolerated),
- Or establish your center of economic interests there, i.e. transfer your main income, investments and assets.
Tip: In many cases, setting up an Andorran holding or patrimonial company can fulfill this requirement and anchor your tax status for the long term.
The risk of dual tax residence
In certain cases, your country of origin may continue to consider you as a tax resident if you retain significant ties to its territory (available housing, family, majority income, etc.).
This is known as a residency conflict, which can lead to double taxation if no precautions are taken.
The role of the Franco-Andorran tax treaty
To prevent such situations, Andorra has signed double taxation agreements, including one with France (2013).
These treaties set out a hierarchy of criteria for determining your effective tax residence:
- Permanent home - the place where you have your main dwelling,
- Center of vital interests - strongest economic and family ties,
- Usual place of residence - country where you spend the most time during the year,
- Nationality - ultimate criterion if no other.
In the event of disagreement, an amicable procedure between tax authorities can resolve the conflict.
ENGAGE support: anticipate and prove
At ENGAGE, we work with our customers to prepare a complete file to demonstrate, in the event of an audit, that their tax residence is in Andorra:
- Proof of main accommodation on site,
- Effective transfer of activities and revenues,
- Coordinated tax returns between departure country and Andorra,
- Solid documentation to make any challenge unfounded.
The benefits of a secure status
Once you have been recognized as an Andorran tax resident, you can take full advantage of :
- income tax capped at 10%,
- the absence of a wealth tax,
- inheritance neutrality (gifts and inheritances free of duties),
- and the legal stability you need to plan the transfer of your estate with peace of mind.
Step 8: Post-expatriation follow-up and compliance - Living in Andorra with peace of mind
Expatriation is not an end in itself. It's the start of a new wealth cycle.
ENGAGE is your long-term partner:
- Annual tax returns in Andorra.
- Verification of consistency with your previous tax obligations.
- Adapting your strategy to international legislative developments.
- Optimized wealth transfer (gifts, inheritances, trusts).
The challenge: to make your expatriation not only a tax success, but also a life success.
Conclusion
Successful expatriation never happens by chance. It's a proven method, based on anticipation, compliance and expert support.
ENGAGE guides you every step of the way so that your departure is :
- Legally secure,
- Tax-optimized,
- Humanly accompanied.
Click here to book a strategic meeting with an ENGAGE consultant.
Pitfalls to avoid when relocating to Andorra
Going to Andorra without preparing your departure for tax purposes?
An impromptu expatriation is risky.
In France, for example, a poorly organized departure can trigger exit tax, i.e. the immediate taxation of unrealized capital gains on your holdings.
If you don't plan ahead, you risk turning a future tax advantage into an immediate tax loss.
Engage carries out simulations and organizes your departure to avoid these consequences.
Is it enough to spend more than 183 days in Andorra to be recognized as a tax resident?
No. The 183-day threshold is in fact one of the criteria laid down in Andorran domestic law, since Andorran law provides for two alternative conditions for being considered a tax resident:
- Stay in Andorra for at least 183 days a year (one-off absences are not counted),
- Or have Andorra as the center of your economic interests, i.e. locate the majority of your assets and income there.
However, your country of origin (France, Spain, Belgium, Luxembourg...) applies its own tax residency rules.
It may therefore continue to consider you a resident, even if you meet the Andorran criteria.
In the event of conflict, the double taxation treaty (where it exists) sets out a hierarchy of criteria: permanent residence, center of vital interests, habitual place of residence, nationality.
In practice, if you only have a home in Andorra, your tax residence will be indisputable. But if you also keep a home in your country of origin, the analysis becomes more complex and requires expert assistance.
Do I still have to meet my tax obligations after I leave?
Yes, many taxpayers are unaware that certain post-expatriation declarations are still mandatory:
- Foreign bank accounts,
- Holdings in companies outside the home country,
- Residual income retained in your former jurisdiction.
Failure to comply with these formalities can result in heavy penalties and arouse suspicion of tax evasion.
Engage provides a personalized follow-up service to help you comply with all your obligations.
Is the transfer of my assets automatically optimized in Andorra?
No. Even though Andorra does not levy inheritance or gift taxes, French or Spanish civil law may still apply if your heirs reside there, or if part of your assets remain located in these countries.
If you don't structure your estate appropriately (inheritance agreement, anticipated donation, etc.), you run the risk of having the rules of your home country apply despite your expatriation.
Engage integrates succession planning into its overall strategy to protect your loved ones and preserve your assets.
In a nutshell:
The 4 major pitfalls to avoid are :
- Leaving without tax preparation (exit tax, unrealized capital gains),
- Not really transferring economic interests,
- Forgetting your post-departure reporting obligations,
- Neglecting wealth transfer .
At Engage, our mission is to secure your expatriation from start to finish, so that your move to Andorra is synonymous with peace of mind, rather than a tax adjustment.
Contact Engage for a personalized diagnosis and avoid these costly mistakes
The viewpoint of an ENGAGE tax expert
" Expatriating assets to Andorra is one of today's most effective strategies for high-value French entrepreneurs and wealthy families looking to secure their inheritance. But it requires rigorous preparation, an intimate knowledge of tax treaties and a long-term strategy that goes beyond taxation alone."
Conclusion: Andorra, a heritage opportunity to be seized methodically
Tax expatriation to Andorra is not an escape, but a structured, secure and compliant change of lifestyle.
For high net worth individuals, it enables :
- Significantly reduce taxes on income, capital gains and inheritance;
- Gain peace of mind, confidentiality and administrative efficiency;
- Structure their assets with modern, flexible legal tools.
But there's more at stake than just a move: it's a global repositioning of the home, its assets and flows.
Contact ENGAGE for a confidential asset diagnostic.
Click here to book a strategic meeting with a Franco-Andorran tax consultant.