Moving from Malta to Andorra: A Comprehensive Tax Comparison
Maltese Non-Doms vs. Andorran Personal Income Tax — What the Numbers Really Say in 2026
Key Consideration for 2026: Malta’s Non-Resident Tax Regime imposes a minimum annual tax of €15,000, a 15% tax rate on repatriated income, and up to 35% on income sourced in Malta. These requirements, combined with an 18% VAT rate, are leading a growing number of expatriates to seriously compare Malta and Andorra—where the personal income tax (IRPF) is capped at 10% with no minimum tax, and the general income tax (IGI) is 4.5%.
Malta has long been considered the tax gateway to the European Union: an accessible Non-Dom regime, a dense air network, and an English-speaking environment. However, the reality of the total tax burden, the requirement for physical presence, and the complexity of the corporate income tax refund mechanism are now leading many expatriates to reconsider their situation. Andorra—with a 10% personal income tax rate, a 10% corporate income tax rate, no wealth tax, and a minimum 90-day presence requirement for passive residency—offers a structurally more straightforward alternative. This guide compares the two destinations based on the criteria that really matter and details the steps for successfully transitioning from one to the other.
Your situation deserves a tailored analysis
Existing Maltese structure, Ltd., holding company, real estate assets: every situation is different. Our experts will help you assess what the transition to Andorra would mean for you in practical terms.
Get a personalized analysis of my situationMinimum €15,000/year · EU
: 90 days/year · Permanent · Non-EU
Extended Residency Rights
: France-Andorra Tax Treaty
Why the Malta–Andorra comparison is gaining traction in 2026
Until now, migration of Maltese residents to Andorra has been limited to a small group—entrepreneurs wishing to close their Ltd. and open an Andorran SL, or individuals living off investment income seeking to opt out of the remittance basis system. This trend is accelerating in 2026 for several converging reasons.
Pressure on the Non-Dom regime
Under Malta’s Non-Resident Tax Regime, repatriated income is taxed at a rate of 15%, with an annual tax minimum of €15,000—regardless of the actual amount of income repatriated. Income generated directly in Malta, on the other hand, is subject to Malta’s progressive tax schedule, which can reach 35%. The local VAT rate is 18%, compared to 4.5% in Andorra. For an expatriate whose income is primarily passive and whose tax structure is simple, the tax difference begins to become significant when annual income exceeds €150,000.
The 2022 France-Andorra Agreement — A Paradigm Shift
Since the tax treaty between France and Andorra came into effect, Andorran residency has been fully recognized by the French tax authorities. This is a decisive factor for French nationals who were residing in Malta for tax reasons: Andorra now offers the same legal certainty with respect to France, along with a more favorable tax regime and less stringent residency requirements.
Readability as a Fundamental Criterion
The administrative complexity of the Maltese tax system—including the mechanism for partial corporate income tax refunds in installments, cash flow delays, and substance requirements—generates significant indirect costs. Andorra offers a 10% corporate income tax rate with no refund system, a flat personal income tax rate of 10% (with a personal exemption of €24,000), and no wealth tax or inheritance tax on direct descendants. The Principality’s transparency is an advantage that pays off over time.
Tax Comparison: Malta vs. Andorra — 2026 Data
| Tax criterion | Malta (Non-Dom) | ★ Andorra |
|---|---|---|
| IR — Tax Rate on Repatriated Income | 15% flat rate (remittance basis) | 10% — flat rate (IRPF) |
| IR — Local-Source Income | Progressive scale ≤ 35% | 10% — same plan |
| Annual Tax Minimum | At least 15,000 € per year | None |
| Income Tax Exemption (Income < Threshold) | No exemption below the minimum | 0% up to €24,000 per year (personal deduction) |
| Corporate tax | 35% (partial deferred reimbursement possible) | 10% — fixed rate, direct |
| VAT / Indirect Taxation | 18% (VAT) | 4.5% (IGI) |
| Wealth tax | None | None |
| Inheritance tax (direct line) | Exempt | Exempt |
| Capital Gains on Real Estate | Taxable | Acquitted after 10 years in custody |
| Tax Treaty with France | Yes | Yes — France-Andorra Agreement (in force) |
| Minimum attendance required | 183 days per year (actual tax residence) | 90 days per year (secondary residence) |
| Required investment | None | 1 M€ in Andorran assets (or 400 k€ through Fons d'Habitatge) + AFA deposit of 50,000 € |
| Duration of the tax regime | Undetermined — possible reform | Permanent Establishment — Sovereign Tax Entity |
| Administrative Complexity | High (remittance basis, corporate income tax to be refunded, cash flow tracking) | Low — direct income tax return, flat corporate tax rate |
| EU/Schengen Status | Yes — EU free movement | Outside the EU — travel agreements with France and Spain only |
Data verified in April 2026. Andorran personal income tax: Llei 5/2014 (rate: 10%, deduction: €24,000). Andorran corporate income tax: Llei 95/2010 (rate: 10%). Passive residency: Llei 9/2012, Art. 96 (investment of 1 M€ or 400 k€ in the Fons d'Habitatge, AFA deposit of 50,000 €). Each situation requires an individualized analysis.
What Andorra Offers That Malta Cannot Match
A 10% income tax rate with no minimum tax and no remittance basis
Andorran personal income tax is a direct, simple tax with a flat rate of 10% (Law 5/2014, Art. 43). It applies to a resident’s total worldwide income, after applying a personal exemption of €24,000 (Art. 35). Below this threshold, no tax is due. Above it, the rate is 10%—with no progressive tax brackets, no remittance mechanism, and no minimum tax threshold. For an annuitant receiving €200,000 in annual dividends, the Andorran personal income tax (IRPF) amounts to approximately €17,600 (10% on €176,000 after the deduction). In Malta under the Non-Dom regime, the same individual would pay the minimum of €15,000 regardless of their circumstances—and more if the income is repatriated at the standard rate.
A 10% income tax rate without a deferred payment system
The Andorran income tax rate is set at 10% (Law 95/2010, Art. 41). There is no partial refund mechanism as in Malta, which requires taxpayers to pay 35% upfront before recovering 6/7 of the tax through a process that can take several months. In Andorra, the actual tax cost of the business is immediately clear. For entrepreneurs setting up an Andorran SL, cash flow planning is straightforward and free of administrative uncertainty.
The lowest minimum occupancy requirement in Europe for a passive house
Malta requires, for tax residency to be recognized, an actual presence that in practice tends to be around 183 days. Andorra offers residency status without gainful employment (passive residency) with a presence requirement of only 90 days per year—half that amount. For frequent travelers, those engaged in international business, or those managing assets across multiple time zones, this difference is decisive and cannot be found elsewhere in Europe with comparable tax regimes.
France-Andorra Agreement — Legal Certainty for French Citizens
The tax treaty between France and Andorra is in effect and fully recognizes Andorran tax residency. For a French national moving from Malta to Andorra, the situation with regard to the French tax authorities is secure: provided that the Andorran residency is genuine and documented (actual presence, primary residence in Andorra, center of vital interests in the Principality), the risk of reclassification is mitigated.
| Typical Profile | Malta Non-Dom — Estimated Tax Cost | ★ Andorra Income Tax — Estimated Tax Liability |
|---|---|---|
| Rentier — €150,000 per year in dividends | At least €15,000 (even if income is not repatriated) | 12,600 € (10% of 126,000 € after the discount) |
| Entrepreneur — €300,000 in corporate profits | €105,000 before partial repayment (4–8 months) | 30,000 € — immediate, with no deferred repayment |
| Retiree — €80,000/year in foreign pension benefits | At least €15,000 if repatriated + contributions | 5,600 € (10% of 56,000 € after the discount) |
| Digital nomad — €60,000 per year in combined income | 9,000 € (15%), but at least 15,000 € | 3,600 € (10% of 36,000 € after the discount) |
These are indicative estimates that do not include payroll taxes, CASS contributions, or specific deductions. These figures illustrate a structural comparison—not an individual tax simulation.
What kind of person would really benefit from moving from Malta to Andorra?
Rentier / passive investor
→ AndorraDividends, investment income, annuities. Malta’s tax threshold of €15,000 per year is a burden for individuals with variable incomes. Andorra’s personal income tax, which has no threshold, is structurally more advantageous.
Entrepreneur / Active Executive
→ Andorra10% IS with no deferred refund, a straightforward Andorran SL to manage. No substance costs, no 35% advance payment mechanism. The tax cost is immediately clear.
Retiree / Real Estate Assets
→ AndorraAndorra does not tax capital gains on real estate after 10 years. A 10% personal income tax rate applies to pensions. There is no wealth tax or inheritance tax. Ideal for passing on wealth to the next generation.
Family with children
→ AndorraTrilingual education (Catalan, French, Spanish), exceptional safety, and a peaceful lifestyle. Tax deductions for dependents further reduce the effective income tax rate.
Experience in fintech, blockchain, and the EU is required
→ Malta remains relevantMalta has a fintech and blockchain ecosystem that is recognized throughout Europe. For companies whose business requires a specific EU regulatory framework, this factor remains crucial.
Highly mobile EU expatriate
→ Analysis to be performedAndorra's status as a non-EU country limits freedom of movement. For individuals with regular needs for extensive intra-European mobility, Malta retains a passport advantage that can only be determined on a case-by-case basis.
Case Study — Fictional Profile
Sofía, an independent consultant based in Malta since 2021
Sofía, 41, a digital strategy consultant, had set up a Private Ltd in Malta in 2021 to take advantage of the Non-Dom tax regime. Her annual income, consisting mainly of fees billed to European clients, amounted to €280,000. She paid the minimum Non-Dom tax of €15,000 without repatriating her income and was subject to 18% Maltese VAT on her local business purchases. The growing complexity of tracking cash flows—and the lack of a reliable tax treaty with France—led her to consider moving to Andorra. Engage conducted a comprehensive audit of her Maltese structure, identified the optimal sequence for winding it down, and assisted with opening a bank account and registering the Andorran SL. Within eight months, Sofía had obtained passive resident status in Andorra, established an operational Andorran SL, and had an estimated personal income tax liability of €25,600—compared to Malta’s minimum tax of €15,000, which offered no benefits for repatriated income.
“I had spent two years in Malta without ever really feeling settled. In Andorra, the tax transparency and the quality of life changed my relationship with my place of residence.”
— Sofía, a resident of Andorra since 2024, supported by Engage
Moving to Andorra from Malta: Available Articles of Incorporation
Andorra offers four types of residency status to foreign nationals (through the OCPS—Oficina de Consultes i Participació Sectorial). Choosing the right status is the first key decision, as it determines the residency requirements, investment obligations, and the type of business entity to be established.
| Status | Minimum attendance | Investment / Deposit | Suitable profile |
|---|---|---|---|
| Passive residency (without gainful employment) | 90 days per year | 1 M€ in Andorran assets (or 400 k€ in the Fons d'Habitatge) + 50,000 € AFA deposit | Annuity recipients, investors, retirees |
| Active residence (with employment) | 183 days/year | AFA Security Deposit: 47,500 € (Andorran limited liability company required) | Entrepreneurs, active executives |
| Digital Nomad Residency | 183 days per year (or fewer, subject to approval) | None — discretionary approval | Remote Workers — Case-by-Case Approval |
| Artist/Athlete Residency | Variable | Specific Criteria | Renowned artists or athletes |
Important Legal Note: For passive residency, the minimum investment is €1,000,000 in Andorran assets (real estate, equity interests, Andorran financial instruments, or non-interest-bearing deposits with the AFA) pursuant to Article 96 of Law 9/2012. This amount is reduced to €400,000 only in the case of an investment in the Fons d’Habitatge. In addition, a non-refundable, permanent deposit of €50,000 must be made to the AFA (+ €12,000 per dependent). These amounts are to be considered investments in Andorran assets—not expenses.
How to Successfully Move from Malta to Andorra in 7 Steps
Review of the Situation in Malta
Analyze the specifics of your residence in Malta—documented days of presence, type of entity (Private Ltd, trust, holding company), whether income is repatriated or not, and tax filing obligations. Identify any remaining obligations and exit risks before committing to anything.
Choosing Andorran residency status
Passive residency (90 days/year, investment of 1 M€ or 400 k€ through Fons d'Habitatge) or active residency (183 days/year, AFA deposit of 47,500 €, Andorran SRL required). The appropriate status depends on the nature of your income, your residency requirements, and your financial plans.
Dissolution or Reorganization of the Maltese Entity
Dissolution of the Private Ltd (2 to 6 months, depending on remaining business activities), closure of bank accounts, and filing of a notice of termination of residency with the Inland Revenue and Identity Malta. Anticipate any withholding taxes that may apply to liquidation distributions.
Opening a Bank Account in Andorra
Rigorous due diligence at Andbank, MoraBanc, or Creand on funds coming in from Malta. Prepare a complete and traceable source-of-funds documentation package—Andorran banks apply strict KYC standards to funds originating from jurisdictions with mixed reputations.
Completion of the mandatory Andorran investment
For passive residency: selection of assets (residential real estate, an equity interest in an Andorran company, an AFA deposit, or a Fons d'Habitatge if eligible). The investment must be made within a maximum of 6 months following the application—extendable in cases of force majeure.
Submission of the Andorran residency application
Preparation and submission of the application to the Andorran Immigration Service (Servei d'Immigració): proof of identity, criminal record, Andorran health insurance, proof of financial resources, investment commitment. Processing time: 2 to 4 months.
Declaration of Change of Tax Residence (if French)
For French nationals: Notify the French tax authorities of the transfer of tax residence to Andorra. Verify whether exit tax applies to significant equity interests. Update the list of tax representatives and contacts.
Mistakes to Avoid at All Costs in This Type of Transition
Mistake #1 — Terminating your Maltese residency before obtaining Andorran residency
A gap in tax residency—even if only for a few weeks—can result in an unintended period of tax residency in the country of origin. The correct sequence is: obtain the Andorran Passi first, then formally terminate your Maltese residency.
Mistake #2 — Underestimating the source of the funds
Andorran banks enforce strict KYC procedures. Funds originating from complex Maltese structures (such as trusts and multi-tiered structures) require complete documentation tracing the funds back to their source. An incomplete application may prevent the opening of a bank account and delay the entire process.
Mistake #3 — Confusing passive residence with active residence
Passive residency does not allow you to engage in direct gainful employment in Andorra. If you wish to establish and actively manage an Andorran SL from within the Principality, active residency applies—with a presence requirement of 183 days, not 90.
Mistake No. 4 — Neglecting the substance of Andorran residency
A minimum of 90 days of presence is the legal requirement—not a target to be met exactly. To ensure that your Andorran residency stands up to a potential tax audit (particularly by the French tax authorities), it is recommended that you document your stays, have a stable place of residence, and ensure that your daily life (banking, medical care, social life) is firmly rooted in Andorra.
Mistake No. 5 — Forgetting the French exit tax on equity interests
French nationals leaving France (or ceasing to be tax residents there) who hold significant equity interests in companies may be subject to the French exit tax. This issue must be addressed before the Maltese residency is definitively terminated—not just upon returning to France.
Sample Reverse Schedule — Transition from Malta to Andorra
Andorra or Malta: What the Long-Term Numbers Actually Show
There is no one-size-fits-all answer to the Malta–Andorra comparison. It depends on an individual’s profile, income level, existing financial structure, and life goals. However, from a strictly tax perspective, Andorra’s structural advantages are hard to dispute for most wealth profiles that are not subject to specific EU regulations.
Malta’s minimum tax threshold of €15,000 per year is a constant burden for those with low or irregular incomes. Malta’s 35% corporate income tax rate, with a deferred partial refund, results in real opportunity costs. And the 18% VAT applies to every local business purchase—compared to 4.5% in Andorra.
Conversely, Malta offers what Andorra cannot: a passport granting free movement within the Schengen Area, a regulatory-compliant fintech ecosystem, and membership in the European Union, which simplifies certain cross-border arrangements.
The right decision isn't the one with the lowest rate—it's the one that fits your financial and personal circumstances over the next ten years.
We regularly assist expatriates from Malta who are seriously considering a move to Andorra. The process always begins with the same assessment: understanding what you have actually built in Malta, what the transition would entail in practical terms, and whether the tax savings justify the complexity of the transition for your specific situation. Some conclude that Andorra is the right choice. Others prefer to optimize their Maltese structure. In both cases, clarity on the numbers is worth more than any rough estimate.
Ready to seriously evaluate the Malta–Andorra transition?
An audit of your Maltese entity, a personalized tax comparison, and assistance with the Andorran residency application process: our experts work with you to develop the strategy best suited to your specific situation.
Schedule an appointment with an expertFAQ — Leaving Malta for Andorra in 2026
What is the specific tax advantage of Andorra over Malta for someone living off investment income?
In Malta under the Non-Dom regime, a person living off passive income who does not repatriate their income pays the mandatory minimum of €15,000 per year, no matter what. In Andorra, the personal income tax rate is 10% on all (worldwide) income, after a personal exemption of €24,000—and there is no minimum tax threshold. For someone earning €100,000 in passive income, the Andorran income tax would be approximately €7,600, compared to the Maltese minimum of €15,000.
How much do you need to invest to obtain passive residency in Andorra?
Andorran law (Law 9/2012, Art. 96) requires a minimum investment of one million euros (€1,000,000) in Andorran assets—real estate, equity interests, Andorran financial instruments, or non-interest-bearing deposits with the AFA. This amount is reduced to 400,000 € only in the case of an investment in the Fons d’Habitatge. In addition, a non-refundable, permanent deposit of 50,000 € must be made to the AFA, plus 12,000 € per dependent. These amounts must be considered investments in the Andorran economy—not as fees.
Can you keep your Maltese private limited company after obtaining Andorran residency?
Technically, yes, but the issue concerns the company’s tax residency and its substance. If you exercise control and effective management of the company from Andorra, the company could be considered a tax resident of Andorra by the Maltese or French authorities. An audit of the company’s structure and governance is essential before making this decision.
How long should we expect the full transition from Malta to Andorra to take?
Between 8 and 14 months in total, depending on the complexity of the existing Maltese structure. The dissolution of a Private Ltd takes 2 to 6 months. Opening a bank account in Andorra and making the mandatory investment take 3 to 5 months. Processing the residency application by the Andorran Servei d’Immigració takes 2 to 4 months. It is strongly recommended to plan 12 months in advance to avoid any gap in tax residency.
Is Andorran tax status recognized by the French tax authorities?
Yes, since the Franco-Andorran tax treaty came into effect. Andorran residency is fully recognized by the French tax authorities provided that it is genuine and documented: actual presence of at least 90 days per year, a permanent home in Andorra, and the center of vital interests (both economic and personal) in the Principality. A “paper residency”—a rented residence without actual presence—could be reclassified.
Is Andorra a member of the European Union or the Schengen Area?
No. Andorra is not a member of the EU or the Schengen Area. However, it has free movement agreements with France and Spain, allowing for border-free travel within those two countries. For non-EU nationals who relied on their Maltese residency to move freely within Europe, this point should be carefully considered before making a decision.
Is there a wealth tax or an inheritance tax in Andorra?
No. Andorra does not levy any wealth tax. Inheritances in the direct line of descent (children, parents) are exempt. Capital gains on real estate are exempt after 10 years of ownership. This tax structure is permanent—it is not a temporary regime or a political exception that could be reformed under budgetary pressure.
