Tax residence Andorra: optimize, protect, pass on

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Introduction

Tax residence in Andorra: what if your place of residence became the centerpiece of your wealth management strategy?

More and more entrepreneurs, executives, and wealthy expatriates are asking themselves this crucial question.

They are no longer simply looking to reduce their tax burden: they want to regain control of their financial future, stabilize their tax environment, and pass on their wealth with clarity and peace of mind.

In France, the General Tax Code has evolved over the years into a complex and unpredictable mechanism.

Progressive tax scale, income tax, social security contributions, taxable capital gains, French-source income, life insurance, property tax, etc .

Every line of the tax return now seems designed to remind taxpayers that success comes at a high price.

Every year, French tax residents discover new obligations, new justifications, and new subtleties.

The tax authorities are increasing the number of formalities and checks, while successive finance laws are constantly changing the tax framework.

Result: anticipating your tax bill is a balancing act.

The result: exhausted entrepreneurs, confused investors, families worried about how to protect their tax home.

What should be a straightforward process becomes an administrative obstacle course, where the slightest mistake can be costly.

The tax burden is no longer just an accounting issue: it is a mental one.

It is this feeling of no longer being in control of one's own path, of evolving in a system that values conformity over consistency, and which ultimately discourages ambition.

What if the solution wasn't to run away, but to choose?

Choose a country where tax residency is not a constraint, but a framework for stability.

A country where taxation is transparent, rules are clear, and prosperity is respected.

It is in this spirit that the Principality of Andorra stands out today as an obvious choice.

Just a stone's throw from France and Spain, this land of mountains and freedom has built a unique model: a secure economic environment, transparent and predictable taxation, and an exceptional quality of life.

Far from the clichés, Andorra attracts discerning individuals: business leaders, investors, active retirees, and expatriates seeking to build lasting success.

They are not looking for a "tax haven," but rather a stable ecosystem where the rules of the game are known, fair, and sustainable.

Choosing Andorra as your tax residence means opting for clarity rather than complexity, responsibility rather than constraints.

It means deciding that success should not be achieved under pressure, but within a balanced framework of taxation, legality, and quality of life.

Rethinking your tax residence means giving new meaning to your assets, putting strategy back at the heart of your decision-making, and no longer being at the mercy of your tax environment.

It means affirming a vision: that of a heritage that is organized, protected, and transferable.

Contact ENGAGE for a comprehensive asset audit and a personalized assessment of your tax residence in Andorra.

Discover how to use your tax situation as a lever for performance, security, and freedom.

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1. The context: tax fatigue and the quest for stability

Taxes are not the problem.

It is the uncertainty surrounding it.

In France, the tax landscape is changing faster than entrepreneurs' investment plans.

Each finance bill brings its own set of changes, adjustments, and subtleties.

Tax department circulars, which are often technical, pile up without always clarifying the rules.

Successive revisions to the progressive tax scale in the General Tax Code create a feeling of constant unpredictability.

For a business leader, investor, or expatriate, this instability is not only uncomfortable: it is paralyzing.

How can you plan a ten-year wealth strategy when the rules change every twelve months?

How can you invest with peace of mind when tax allowances, exemptions, and credits are being redesigned at the whim of reforms?

This fiscal volatility turns planning into uncertainty and success into anxiety.

The entrepreneur no longer knows how to decide between salary and dividends.

Investors are wondering whether their property income or capital gains will still be treated in the same way next year.

Taxpayers, meanwhile, waver between caution and weariness.

For a business leader, the situation becomes even more complicated.

Filing your tax return is becoming a high-risk exercise: the slightest error, a forgotten supporting document, or a wrongly checked box can trigger a flood of requests fromthe tax authorities.

Social security contributions on capital income, withholding tax on French-source income, and differentiated taxation of capital gains on securities transform the simple management of a portfolio into a veritable science of tax interpretation.

The French system gives the impression of changing the rules of the game mid-game.

A rate that goes up here, a tax break eliminated there, a new tax added to the budget bill...

And as the texts follow one another, taxpayers try to keep up—or survive.

Many end up asking themselves: where should they place their economic interests?

Where is the true "tax domicile" of modern life, characterized by mobility, international investments, and geographical freedom?

When do you cease to be taxable in France and become a tax resident of another country?

How can you avoid double taxation without getting into trouble with the tax authorities?

These are all legitimate questions, to which there is no universal answer—but rather a rigorous and personalized approach.

The key lies in a controlled, well-considered change of tax residence that complies with international conventions.

Not a leak, but a structured transition.

A transition from an unstable tax regime to a sustainable framework aligned with economic and family objectives.

And that's where expertise makes all the difference.

Only precise guidance—based on an understanding of the center of economic interests, tax residence, and bilateral tax treaties —will enable this transition to be carried out in a fully legal manner.

This is precisely ENGAGE's mission: to transform a tax constraint into a clear, sustainable, and compliant wealth management strategy.

Helping entrepreneurs, investors, and expatriates find what they are looking for above all else: stability.

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2. Why choose Andorra as your tax residence?

Because at some point, every entrepreneur realizes that it's no longer about earning more, but about keeping more.

Tax residency in Andorra is neither a coincidence nor a passing trend.

This is the result of careful consideration by executives, investors, and families who understand that effective wealth management is measured not only in terms of returns, but also in terms of stability, predictability, and consistency.

Andorra is not a tax haven.

It is a modern economic and legal model, built on a simple philosophy: promoting the creation of real value, while complying with international standards.

The country has managed to transform its image without denying its identity.

Once perceived as a secret enclave in the heart of the Pyrenees, the Principality is now an open, transparent state recognized by international institutions.

It has signed tax treaties with France and numerous other countries, aligned itself with OECD standards, and put an end to banking secrecy.

As a result, Andorra now combines what entrepreneurs seek most: competitive taxation, stable legislation, and complete legal certainty.

A clear, predictable, and sustainable tax framework

Income tax in Andorra is capped at 10%.

No wealth tax, no inheritance or gift tax, no social security contributions on capital income.

Capital gains on real estate are governed by a simple and transparent regime.

The VAT rate, known as IGI, is only 4.5%.

This tax framework does not encourage flight, but projection.

It allows taxpayers to develop long-term strategies, invest, transfer, and structure their assets without fear of political upheavals or sudden reforms.

The Andorran authorities focus on predictability: tax law does not change every year, and transparency is a key pillar of their appeal.

This approach appeals to leaders who are tired of building on shifting sand.

A philosophy: taxation at the service of life

Andorra is based on a simple idea: taxation should support success, not punish it.

Here, prosperity is seen as a collective driving force.

Taxes are used to finance a high quality of life, not to stifle initiative.

The Andorran model is based on balance: low tax rates, modern infrastructure, political stability, and respect for privacy within the framework of the law.

It's not a tax haven, it's a common-sense economy, where you pay taxes for what they are—a contribution to a fair and predictable system.

The country attracts discerning individuals who seek above all consistency between their tax status, lifestyle, and personal values.

Entrepreneurs who have worked hard, taken risks, and now want to live in an environment where performance is not viewed with suspicion.

An environment conducive to investment and transfer

Tax residency in Andorra is not just about tax optimization.

It is a life-changing choice that offers families a safe, clean, and international environment.

Andorra offers the security of a sovereign state, the modernity of a regulated financial system, and close proximity to France and Spain.

The schools are trilingual, the medical facilities are excellent, and the natural setting is exceptional.

Expatriates find a rare balance between professional demands and quality of life.

For investors, the Principality is fertile ground.

Andorran companies benefit from an attractive tax regime, foreign income may be exempt, and non-residents have a clear framework for their foreign-source income.

No gray areas, no uncertainty: everything is codified, measured, and sustainable.

In summary: clarity as a lifestyle choice

Choosing Andorra as your tax residence does not mean moving away from your country; it means moving closer to your freedom.

It means opting for a simple, predictable tax system that is compliant and respectful of individual success.

Business leaders, investors, and families who make this choice all say the same thing: it's not about taxes, it's about meaning.

They seek a place where the law does not contradict itself, where prosperity is not suspect, and where work retains its value.

Andorra offers this promise: a modern tax environment, rare political stability, and a quality of life that transforms taxation into a lever, not a burden.

Contact ENGAGE to find out how tax residency in Andorra can become the foundation of your financial, professional, and personal strategy.

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3. The different types of administrative authorization for residence in Andorra

Before becoming a tax resident in Andorra, you must first be authorized to reside there.

This is the administrative category of residence: any foreigner setting foot on Andorran soil automatically acquires tourist status and is authorized to remain in the country for a maximum of three months per year.

This is obviously insufficient to qualify for taxresidence in Andorra.

It is therefore necessary to apply for and obtain administrative authorization to reside in Andorra.

Andorran legislation, and more specifically the Immigration Law, offers a range of residence permits allowing each profile—entrepreneur, investor, self-employed professional, retiree, or creator—to settle in a clear, compliant, and sustainable manner.

This legal and administrative framework reflects the country's desire to attract talent, investors, and families who want to live and work in a stable, secure, and economically competitive environment.

To become an Andorran tax resident, you must first obtain a residence permit that is consistent with your personal and professional goals.

Each regime meets specific conditions and paves the way for clear taxation, official recognition, and complete legal certainty.

Active residence

Active residency applies to entrepreneurs, executives, and employees who wish to work in Andorra on a permanent basis.

This is the most common regime for those who settle permanently in the Andorran economy.

To be eligible, you must be employed by an Andorran company or set up your own company domiciled in the country.

Residents must live permanently and effectively in Andorra, for at least 183 days per year, and carry out their activities there in a genuine manner.

The residence and work permit is issued for a period of one year, then renewable three times for two years, before being extended every ten years.

Cultural integration is encouraged: for successive renewals, residents must demonstrate proficiency in Catalan (levels A1 and then A2).

Family reunification is possible, provided that sufficient financial resources can be demonstrated.

Residence for own account —or entrepreneurial residence —is intended for those who wish to be self-employed or run their own company in Andorra.

This is the privileged status of business leaders and professionals.

The applicant must:

• engage in an activity on one's own behalf,
  
  
• or be a partner and director of an Andorran company, with a stake of more than 34% of the share capital,
  
  
• reside in Andorra for at least 183 days per year,
  
  
• and deposit a financial guarantee of €50,000 with the Andorran Financial Authority (AFA).
  
  

Active entrepreneurs benefit from clear taxation, controlled social security contributions, and a stable administrative system conducive to the development of sustainable activities.

Family reunification is also provided for, subject to the same income conditions.

The passive house

There are numerous passive residency programs in Andorra.

Residence without gainful employment

Non-working residency is intended for investors, rentiers, and retirees who wish to settle in Andorra without working there.

It is the ultimate status symbol.

It allows you to live in Andorra while freely managing your international assets, subject to certain conditions:

• Have a place to live (rented or owned).
  
  
• Provide proof of sufficient financial resources and comprehensive private health insurance covering illness, disability, and old age.
  
  
• Reside in the country for at least 90 days per year.
  
  
• Make a minimum investment of €600,000 in Andorran assets (real estate, shares, life insurance products).
  
  
• Deposit €47,500 with the AFA for the account holder, plus €9,500 per dependent, included in the total investment.
  
  

The authorization is granted for two years, renewable thereafter for periods of three and then ten years.

French, Spanish, and Portuguese nationals have the same schedule.

Family reunification is permitted, subject to conditions of financial dependency or study.

The residence for professionals with international ambitions

The residence for professionals with international ambitions is aimed at consultants, experts, digital creators, and international freelancers whose activities extend beyond national borders.

This status, which is very attractive to mobile freelancers, offers a balance between freedom and compliance.

The resident must:

• reside in Andorra for at least 90 days per year,
  
  
• engage in an activity where 85% of the services are provided abroad,
  
  
• have accommodation in Andorra,
  
  
• prove the economic viability of its activity,
  
  
• and deposit a guarantee of €47,500 with the AFA (+ €9,500 per dependent).

The administrative headquarters of the business must be located in Andorra.

The authorization is issued for two years and then gradually renewed for up to ten years.

This regime is suitable for self-employed individuals who want to combine clear taxation, international mobility, and quality of life.

Residence for reasons of scientific, cultural, or sporting interest

Residence for scientific, cultural, or sporting reasons allows recognized figures —researchers, artists, athletes—to carry out their activities from Andorra.

This status highlights international recognition of talent.

The applicant must have comprehensive insurance, accommodation, and sufficient financial means to support themselves.

A deposit of €47,500 (plus €9,500 per dependent) is also required by the AFA.

The authorization is granted for two years, renewable for three years, then ten years.

This is the status of those who wish to pursue their art or science in a calm, fiscally stable, and humanly inspiring environment.

Residence for stays in a private medical, geriatric, or therapeutic center

Residence in a private medical, geriatric, or therapeutic center meets the needs of certain elderly or frail individuals who wish to live in Andorra.

This status allows for long-term stays in a healthcare or convalescent facility.

It requires proof of sufficient financial means and comprehensive medical coverage.

The stay must be at least 90 days per year, and the residence permit is renewable annually.

It is a comfortable and secure environment, ideal for those seeking well-being and tranquility in a controlled setting.

The residence for digital nomads

The digital nomad residency is one of the most recent programs.

It is aimed at those whose work relies on technology and mobility.

The applicant must obtain a favorable resolution from the Department of Economic Affairs, proving that their activity does not require a fixed location.

He must also:

• reside for at least 90 days per year,
  
  
• have housing and comprehensive health insurance,
  
  
• and provide a guarantee of €47,500 (+ €9,500 per dependent).
  
  

This status attracts digital entrepreneurs, consultants, designers, and creators who want to work remotely from a natural, safe, and tax-optimized environment.

French, Spanish, and Portuguese nationals are granted an initial two-year permit, renewable on the same basis as other schemes.

Ultimately, obtaining residency in Andorra is not a mere administrative formality: it is a life strategy.

Each status corresponds to a project — undertaking, investing, creating, passing on, living differently.

The guiding principle remains the same: total transparency and legal stability for a clear tax system.

And it is precisely this rare and valuable combination that makes Andorra a prime destination for those who want to balance ambition with serenity.

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4. Case study: Laurent, an entrepreneur who became a tax resident of Andorra

When success begins to weigh heavily: the silent shift

Laurent is 46 years old and runs a thriving e-commerce business in Lyon.

He built his success patiently, brick by brick, without inheritance or shortcuts.

His company grew, as did his teams, and the figures followed a trajectory that many envy.

But behind this apparent success, another reality is becoming apparent: the tax burden has become overwhelming.

In 2022, he was shocked to discover that nearly 50% of his profits were being taken away in income tax, social security contributions, and real estate wealth tax.

One evening, exhausted, he confessed to his partner: "I don't feel like a business owner anymore... I've become a full-time taxpayer."

She doesn't answer right away, but her gaze says she understands.

Beyond the financial burden, it is the mental burden that exhausts her.

Tax reforms follow one after another, tax brackets are constantly changing, and administrative complexity poisons his daily life.

Laurent feels like he is navigating through a permanent fiscal fog.

He no longer dares to invest, he delays recruitment and postpones the transfer of his business.

One Monday morning, in the middle of a meeting, he stops: "We're sailing in a storm without a weather forecast."

For the first time, he looks at his associates and admits, "I no longer believe in the framework within which I am trying to plan our future."

That day, he realized he had to take action.

Meeting ENGAGE: a breath of fresh air

It was an entrepreneur friend who told him about ENGAGE.

“You'll see, they're straightforward. No magic, just law, strategy, and clarity.”

Laurent makes an appointment, cautiously but with the intuition that something must change.

On the day of the meeting, he arrives tense, his arms loaded with binders and tax returns.

As soon as he sits down, he immediately notices a difference: people are really listening to him.

The counselor does not speak right away; he observes, takes notes, and asks structured questions.

"What weighs most heavily on you today?" he asks.

Then: "And what would you like to find?"

Laurent finds himself speaking freely: about his exhaustion, his sense of injustice, his desire for clarity.

The ENGAGE expert calmly replies: "We will look at what is right for you. Nothing is set in stone. Everything can be done legally, properly, and intelligently."

This sentence acts as a trigger.

Laurent agrees to conduct a comprehensive asset and tax audit.

He feels something he hasn't felt in a long time: hope.

The audit: the revelation

The ENGAGE team analyzes its assets in minute detail.

Income, capital gains, real estate, shares, life insurance policies, bank transactions, risks of reclassification: everything is scrutinized.

For the first time in his life, Laurent sees his situation clearly.

The conclusions are indisputable: the French tax model is no longer sustainable.

Too many uncertainties, too many costs, too many risks.

The ENGAGE expert presents him with a coherent solution: tax residency in Andorra.

“This isn’t a loophole,” he explains. “It’s a strategy aligned with your business, your mobility, and your goals.”

Laurent listens, understands, and realizes that he no longer has to suffer.

The strategy: five moves, a thousand impacts

ENGAGE designs a comprehensive, rigorous, and secure strategy.

First step: a comprehensive audit and a precise, quantified tax impact simulation. 

This analysis is conducted alongside a highly experienced French tax specialist with more than 25 years of experience specifically dedicated to Andorra and international taxation applied to the Franco-Andorran context.

His in-depth knowledge of tax expatriation issues in the Principality guarantees our clients a secure, rigorous approach that is fully compliant with applicable law.

Second step: the creation of an Andorran company, a modern and compliant management tool.

Third step: obtaining active resident status, with comprehensive administrative support.

Fourth step: opening a bank account and purchasing a primary residence in Andorra la Vella.

During a visit, he looks at the mountains through the window and murmurs, "I think I could live here."

Fifth step: full compliance with French law and the Franco-Andorran tax treaty, to avoid any reclassification.

Each step is orchestrated methodically and pedagogically.

Laurent doesn't feel like he's moving to a new country: he feels like he's taking back control of his life.

Transformation: finally able to breathe

Three months later, Marc officially becomes an Andorran tax resident.

Its French obligations have been properly settled, its structures are operational, and its tax framework is clear.

The results are spectacular: his overall tax bill falls by more than 60%, capital gains on securities are exempt, and the IFI disappears.

But that's not the point: the point is how he feels.

Marc finds time again.

He finds projects again.

He regains his inner freedom.

He is rehiring, reinvesting, and relaunching his international ambitions.

On weekends, he walks in the mountains, breathing air he had forgotten: the air of tranquility.

During a dinner with fellow entrepreneurs, he confided: "I didn't leave France. I left uncertainty behind."

Then he adds: 

“ENGAGE gave me back what I had lost… vision.”

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5. The 5 steps to obtaining Andorran tax residency

Step 1 – Comprehensive asset audit

A wealth and tax audit is the starting point for any successful optimization strategy.

This is not just a simple technical diagnosis, but a comprehensive, methodical, and fully customized analysis that allows us to accurately map all of your financial flows, assets, and liabilities, both in France and internationally.

In concrete terms, the audit answers a simple question: where are you really, and where can you go?

ENGAGE examines the structure of your assets in all its dimensions.

Your professional, financial, and property income is analyzed item by item to understand its nature, frequency, current taxation, and potential for optimization.

Your holdings in French or foreign companies are scrutinized: corporate form , location, tax regime, ownership arrangements, and dividend distribution.

Your securities and real estate investments are analyzed in light of your time horizon, risk appetite, and applicable tax agreements.

Your life insurance policies, bank portfolios, and investment vehicles are evaluated from both a financial and tax perspective in order to identify which investments should be retained, reorganized, or changed.

Your inheritance arrangements and matrimonial property regimes are taken into account in order to assess the impact of a possible change of residence on the transfer of assets and the protection of your loved ones.

This in-depth analysis identifies areas of tax friction, structural inconsistencies, and available optimization levers.

It highlights excessively taxed income, obsolete structures, arrangements that are no longer appropriate, but also opportunities for simplification and asset rationalization.

The goal is not to turn everything upside down, but to distinguish between what should be kept, what should be strengthened, and what should be rethought.

ENGAGE assesses not only the current taxation applicable to each flow, but also the future impact of legislative and treaty changes.

Tax reforms in France, changes to international agreements, and possible modifications to capital gains or social security contribution regimes are all being taken into consideration.

This forward-looking approach makes it possible to build a strategy that is not opportunistic, but sustainable and adaptable, capable of withstanding changes in the tax environment.

The audit concludes with the delivery of a comprehensive, structured, and informative asset report.

This report includes comparative simulations for France and Andorra, showing in figures the impact of a change in tax residence on your income, capital, and inheritance.

Personalized recommendations detail possible scenarios, potential gains, associated risks, and a realistic implementation schedule.

A valuable tool for strategic decision-making, this audit provides a clear, documented, and well-argued overview of your situation.

It allows you to make informed decisions, with figures, assumptions, and consequences clearly explained.

It forms the basis of the tax and wealth optimization strategy that will then be implemented, within a framework that is fully compliant, secure, and aligned with your life goals.

Step 2 – Advice on changing tax residence

Transferring tax residence is one of the most sensitive and decisive steps in an international wealth management project.

It affects not only your current tax situation, but also the future structure of your income, investments, and estate planning.

If poorly prepared, it exposes taxpayers to considerable risks: double taxation, reclassification by the French tax authorities, or inconsistencies revealed during an audit.

When properly managed, however, it becomes a structuring tool, guaranteeing stability, legal certainty, and sustainable optimization.

ENGAGE supports its clients through every stage of this transition, using a proven methodology and drawing on its expertise in both French and Andorran legislation.

The objective is straightforward: to make the change of residence fiscally sound, legally robust, and personally consistent.

Tax residency criteria under Andorran law

Andorran law establishes two main criteria for determining the tax residence of a natural person.

First criterion: reside in Andorra for at least 183 days per year.

This threshold is strictly enforced.

Occasional absences—business trips, vacations, family visits—are considered sporadic and do not reduce the number of days counted.

Proof of residence is based on concrete evidence: bills, local subscriptions, utility consumption, domestic contracts, recurring expenses.

Second criterion: having the center of one's economic interests in Andorra.

This means that the majority of the assets, income, or economic activity must be located in the Principality.

This may be a management company, an investment portfolio, real estate, bank accounts, or a localized professional activity.

ENGAGE verifies that these conditions are met in a consistent, verifiable, and sustainable manner by organizing the client's asset, financial, and personal relocation according to a precise methodology.

This approach ensures that Andorran tax residency is not only obtained, but defensible in the event of an audit.

The risk of dual tax residency: anticipate to secure your position

Sometimes a taxpayer meets the tax criteria of both Andorra and their country of origin.

This is the case for many French citizens: they are physically present in Andorra, but still own a home in France or continue to work part-time in France.

This is referred to as a conflict of residence.

Two situations must be distinguished.

No tax treaty between the two states.

The taxpayer may be considered a tax resident of both countries.

Fortunately, Andorran law (IRPF) provides mechanisms to eliminate double taxation, preventing the same income from being taxed twice.

In practice, the main taxation generally takes place in the country of origin of the income.

Existence of a bilateral tax treaty.

This is the case between France and Andorra (2013 agreement).

These agreements apply hierarchical criteria to objectively determine the country of tax residence:

• Permanent residence: a single dwelling in Andorra is sufficient to establish residence.
  
  
• The center of vital interests: a major criterion, based on professional activity, assets, family, economic and social relationships.
  
  
• The usual place of residence: in case of doubt, the country where the taxpayer spends the most time.
  
  
• Nationality: the ultimate criterion, in the absence of other factors.
  
  
• Consultation between administrations: a last resort to avoid a conflict of jurisdiction.
  
  

ENGAGE analyzes each criterion with clinical precision, taking into account the client's personal, professional, and family situation.

The objective is clear: to secure Andorran tax residency and prevent any subsequent challenges from the French authorities.

Comprehensive support for a flawless transfer

ENGAGE does not just design strategies: the firm coordinates all practical and reporting procedures.

This comprehensive support guarantees a smooth and legally flawless transition.

This includes, in particular:

• drafting and filing transfer declarations with the French tax authorities (form 2042, departure declaration, declarations of foreign accounts);
  
  
• updating banking and asset information with financial institutions;
  
  
• the legal and financial structuring of assets to align them with the new tax residence;
  
  
• conducting an audit to ensure consistency between economic flows, official addresses, professional activity, and reporting obligations.
  
  

ENGAGE also ensures that Andorran residency is substantiated by tangible evidence, which is essential in the event of an inspection: primary residence, health insurance affiliation, local subscriptions, genuine economic activity, active bank accounts, and minimal social integration.

This comprehensive support aims to create an indisputable tax base, guaranteeing full recognition of Andorran resident status by the French and Andorran authorities.

A tax transfer transformed into a life project

Changing your tax residence is not just a matter of taxation: it is a project of financial sovereignty.

It allows income, investments, and assets to be placed within a stable, clear framework that reflects the client's economic reality.

Thanks to ENGAGE's multidisciplinary expertise, this transition becomes a true life project.

The customer doesn't just change addresses: they build an environment that reflects their values—clarity, security, anticipation, and freedom.

Becoming a tax resident in Andorra is ultimately much more than just moving to another country.

It's about choosing:

• a clear and balanced tax model,
  
  
• a stable legal framework,
  
  
• consistent asset governance,
  
  
• a safe, modern living environment suited to international mobility.
  
  

In Andorra, taxpayers do not simply endure their tax system: they understand it, anticipate it, and use it intelligently.

And ENGAGE ensures that every step of this transition is carefully planned, documented, and secured—today and for years to come.

Step 3 – Choose the right (administrative) residence permit

Before moving to the Principality, it is essential to obtain an administrative residence permit issued by the Immigration Service.

This authorization constitutes your legal status in the territory and determines your rights: length of stay, possibility (or not) of engaging in economic activity, presence requirements, investment conditions.

This does not yet constitute tax residency, but rather the administrative foundation that makes any long-term establishment and wealth management strategy in Andorra possible.

Without this foundation, no structure is secure, and no fiscal plan can hold.

ENGAGE assists its clients in choosing the plan best suited to their profile, whether they are entrepreneurs, investors, international executives, independent nomads, or high-net-worth families.

Each authorization corresponds to a lifestyle, specific needs, and a precise wealth management strategy.

Two major legal frameworks: active residents and passive residents

Andorran immigration law distinguishes between two main categories of permits: active residents and passive residents.

The former are engaged in professional or commercial activities in Andorra.

The latter reside in the country without engaging in local activities, but contribute to it through investment or international management of their assets.

These two frameworks open up very different paths, and the choice depends on your business model, your financial goals, and your international mobility.

Active living: for executives, entrepreneurs, and professionals

Active residency is for those who wish to settle and work in Andorra.

It concerns:

• employees working for an Andorran company,
• entrepreneurs or managers of a locally incorporated company,
• self-employed professionals engaged in an authorized independent activity.

This status requires effective presence in the Principality, generally for at least 183 days per year, and participation in local economic life.

Active residency entitles you to Andorran social security coverage (CASS) and allows you to develop a professional activity in a stable tax environment.

ENGAGE steps in at this stage to structure your business, set up the company if necessary, optimize governance, and secure all procedures with the Immigration Service.

Every administrative detail is anticipated, so that your business is compliant from day one.

Passive residence: a flexible and attractive framework for investors and annuitants

Passive residency is designed for those who wish to live in Andorra without working there.

It is aimed at investors, annuitants, retirees, or professionals whose activities are internationalized.

Three main obligations govern it:

a minimum presence of 90 days per year in the territory,

mandatory enrollment in private health insurance,

making a deposit with the Andorran government (approximately €50,000 for the primary account holder and €10,000 per beneficiary).

There are several types of passive residences, each suited to a specific profile.

Residence without gainful employment

Non-business residency is most common among private investors and high-net-worth families.

It is aimed at annuitants, retirees, or holders of diversified assets, all of whom can support themselves through passive income and wish to settle in the Principality without working there.

This plan requires a minimum overall investment.

It is essential to specify that the deposit with the government counts toward the total investment amount required.

ENGAGE structures this investment optimally so that it fits naturally into your existing wealth architecture.

Residence for professionals with international reach

The residence for professionals with international reach is a status designed for executives , consultants, creators, experts, or entrepreneurs whose revenue is more than 85% generated abroad.

It offers an ideal setting for those who wish to live in Andorra while maintaining a predominantly international business.

This status embodies the modern Andorran philosophy, based on flexibility, transparency, and compliance with OECD standards.

ENGAGE prepares and coordinates the entire file, taking into account the nature of your business, your cash flow, your family situation, and your wealth management objectives.

Each request is personalized and designed to be indisputable.

For global executives, this status is often the missing link between mobility and legal certainty.

It allows you to freely undertake business ventures while benefiting from a stable and recognized administrative framework.

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Residence for scientific, cultural, or athletic purposes

This category is intended for individuals recognized for their outstanding contributions in the arts, science, culture, or sports.

It provides a particularly prestigious setting.

ENGAGE takes care of the entire application process, justifying the applicant's contribution and ensuring that the application is presented flawlessly to the local authorities.

This status also requires an actual presence of at least 90 days per year.

Specific statutes for new international profiles

Andorra's immigration law is adapting to modern professional developments, particularly with the emergence of remote workers and new forms of digital activity.

Among these statuses is that of digital nomad.

The digital nomad residence

The digital nomad residence responds to the rise of remote working and attracts structured, mobile international profiles who are oriented towards geographical freedom.

It is aimed at consultants, developers, creators, online service providers, digital investors, and remote workers.

The goal is simple: to live in Andorra while continuing to work exclusively for clients located abroad.

A flexible and secure administrative framework

The statute is based on a clear philosophy: freedom of movement, administrative stability, transparency.

The application is based on a sworn statement accompanied by professional supporting documents.

Once granted, residents can legally stay in Andorra, work remotely, and take advantage of Andorra's tax system—without setting up a local business.

The strategic advantages of the regime

Digital nomads benefit from an attractive and predictable tax environment, considerable freedom in terms of management, an exceptional natural environment, and administrative recognition in line with international standards.

For mobile entrepreneurs and freelancers, it strikes the perfect balance between freedom and compliance.

Residence through family reunification

This program allows spouses, children, or parents of a primary resident to join them under simplified conditions.

It guarantees the cohesion of the family project while providing access to essential services: health, education, social security.

ENGAGE manages this transition entirely, coordinating not only the administrative procedures, but also the family's overall relocation.

A strategic choice at the heart of the heritage project

Choosing your administrative residence permit is not an administrative formality: it is a major strategic decision.

It determines your future status, your tax situation, your investment opportunities, your ability to pass on assets, and your daily life.

ENGAGE supports you every step of the way, analyzing your overall profile, identifying the most sustainable status, putting together a flawless application, and coordinating communications with the authorities.

In Andorra, choosing your residency status means choosing a lifestyle, a form of wealth management, and a long-term path.

It is on this clear and stable legal foundation that your tax residence, investment structures, and wealth transfer will then be organized, in a compliant, transparent, and sustainable environment.

Step 4 – Legal and tax structuring

Legal and tax structuring: building the architecture that protects and enhances your assets

Legal and tax structuring is at the heart of a successful international wealth management strategy.

This is the stage at which we design the architecture that will protect your assets, optimize cash flow, and confidently prepare for the transfer to your heirs.

This is where taxation meets governance, creating a coherent, sustainable structure that is perfectly suited to your lifestyle and ambitions.

ENGAGE supports its clients through this crucial stage, orchestrating the creation of companies, the establishment of holding companies, the management of shareholdings, and estate planning.

Every decision is carefully considered, well-argued, aligned with your economic reality, and in line with international standards.

Custom-designed architecture, tailored to your heritage requirements

Setting up an Andorran company or a holding company allows you to centralize your income and investments in a stable and transparent tax environment.

This structure becomes a hub: a control center that organizes, secures, and enhances your entire portfolio.

It offers concrete, immediately noticeable benefits.

A maximum tax rate of 10% on profits.

The possible application of Article 38 of the Andorran Corporate Income Tax Law, allowing for the exemption of dividends distributed and capital gains on the sale of shares.

A total exemption on dividends received by residents.

Tax neutrality on capital gains from the sale of long-term securities.

Funds from foreign companies can be repatriated to Andorra legally and efficiently thanks to the Franco-Andorran tax treaty, which limits withholding tax on dividends paid from France to 5%.

This bilateral mechanism prevents double taxation while ensuring complete transparency for tax authorities.

In other words: your assets become organized, controlled, and optimized—without ever straying from the legal framework.

Setting up an Andorran company: a lever for control, efficiency, and growth

An Andorran company is a powerful tool in the hands of an entrepreneur or investor.

Whether it is an LLC (Limited Liability Company) or an Inc. (Corporation), it opens up a multitude of possibilities.

It allows you to:

• bill for international services,
• hold financial or real estate assets ,
• collect and redistribute dividends,
• manage cross-investments in Europe, Switzerland, or elsewhere,
• structure family or inheritance projects.

ENGAGE develops a fully customized strategy for each client, in accordance with Andorran company law and local tax law.

Each structure is designed as a link in a coherent heritage architecture: nothing is left to chance.

The goal: for your company to become the silent driving force behind your wealth management strategy.

The Andorran holding company: the ultimate management and transfer tool

For executives and investors with significant professional assets, the Andorran holding company is the most effective and structuring tool available.

It allows you to consolidate your holdings, secure your income, and prepare for the transfer of your assets in a perfectly optimized framework.

A well-structured holding company allows, in particular, for:

• centralize the custody of securities,
• receive dividends under a favorable tax regime,
• reinvest without taxation friction,
• prepare for the transfer in a completely tax-exempt direct line.

Article 38 of the Andorran Corporate Tax Law plays a major role, providing for total exemption of dividends and capital gains from foreign companies (particularly French companies).

Combined with the French-Andorran tax treaty, this provision reduces the effective tax rate on cross-border flows to 5% or less.

The holding company then becomes a true wealth management center, capable of protecting capital, optimizing distributions, and calmly organizing the transfer of professional assets.

A compliant, sustainable, and fully transparent structure

Unlike some opaque jurisdictions, the Andorran model is based on transparency and international recognition.

The structures created are fully compliant with OECD, CRS, and FATCA standards, ensuring the traceability of flows and the legal security of transactions.

ENGAGE ensures that each edit is:

• 100% legal,
• auditable,
• documented,
• perennial.

Each decision is supported by a bilateral analysis, incorporating both Andorran law and the law of the country of origin (particularly France).

This rigor ensures the robustness of the system, even in the event of a tax audit or future restructuring.

Transparency is not a constraint: it is a competitive advantage for well-organized estates.

A long-term heritage vision

Legal and tax structuring is never an end in itself: it is the starting point for a coherent and sustainable wealth management strategy.

By consolidating your assets under an Andorran entity, you gain visibility, security, and transferability.

Your tax situation is no longer a hindrance: it becomes a tool for adding value.

This approach reverses the conventional logic.

Instead of being affected by tax changes, you anticipate them.

Instead of adapting your assets in a hurry, you structure them over time.

Instead of complicating your financial life, you simplify the mechanisms.

"Structuring does not mean complicating matters: it means giving your wealth management strategy a lasting form.

In Andorra, taxation is becoming a management tool, serving to ensure the sustainability of capital.

Step 5 – International compliance

No matter how brilliant a wealth management strategy may be, it can only bear fruit if it is based on impeccable international compliance.

In a world where tax authorities cooperate, exchange and cross-check data, rigor is no longer an option: it is a prerequisite for stability.

ENGAGE makes this step an absolute priority, ensuring that every decision—change of residence, company formation, investment management—is aligned with French and Andorran obligations.

Compliance is not a complement to strategy: it is its silent driving force.

Bilateral compliance, a guarantee of legal certainty

ENGAGE guarantees full compliance with French law, thanks to rigorous, documented, and perfectly orchestrated support, backed by its cooperation with a team of tax lawyers whose expertise in international taxation, and more specifically Franco-Andorran taxation, is based on more than 25 years of experience in the field.

• Declaration of accounts held abroad to the French tax authorities.
• Official notification of change of residence and tax address.
• Strict application of the French-Andorran tax treaty to avoid double taxation on income, dividends, or capital gains.
• Alignment of financial and banking flows with international transparency standards (CRS, FATCA, OECD).

This bilateral compliance— both local and international—is the key to a sustainable and peaceful installation.

It protects taxpayers against the risks of reclassification of residence, tax reassessment, or challenges to the legal validity of transactions carried out.

"Compliance is not an administrative detail: it's the foundation of legal and tax certainty."

Anticipate, track, justify: the three pillars of sustainable compliance

ENGAGE takes a proactive approach to compliance, based on three principles that ensure the strategy remains robust over time.

Anticipate.

Before any transfer or investment, a comprehensive analysis is conducted to determine reporting obligations and anticipate tax consequences: potential exit tax, unrealized capital gains, residency criteria, and risks of residency conflicts.

Trace.

All flows—banking, asset management, professional—are accurately documented.

This traceability ensures consistency between declared income, legal structures put in place, and cross-border flows.

It protects taxpayers and enhances the credibility of the system.

Justify.

ENGAGE ensures that each transaction is backed by impeccable documentation: company articles of association, proof of residence, intra-group agreements, proof of investment, proof of residence, title deeds, and bank statements.

This method turns compliance into a tool, not a constraint.

It becomes a means of lending credibility to the wealth management strategy, avoiding disputes, and ensuring perfect consistency between the client's assets, tax situation, and real life.

Securing the strategy over time

Compliance is not a one-time event: it is an ongoing process that must accompany every stage of the heritage project.

• Legislation changes.
• Tax treaties are changing.
• International standards are becoming stricter.

ENGAGE provides regular and vigilant monitoring of the client's situation, taking into account legislative changes, new tax treaties, and international transparency practices.

Each step of the process—company formation, capital movements, dividend collection, income management—is verified, validated, and documented.

This rigor guarantees the long-term solidity of the structure.

This constant vigilance secures Andorra's tax status and preserves asset stability, even in the event of a change of residence, transfer, or restructuring of assets.

"Compliance is the guarantee that your strategy, designed today, will stand up to tomorrow's scrutiny."

Therefore, international compliance is not simply an administrative step: it is the invisible framework that supports the entire strategy.

It ensures credibility, sustainability, and peace of mind— today, tomorrow, and for years to come.

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6. Mistakes to avoid

Moving to Andorra or structuring your assets there is a strategic move that requires method, consistency, and foresight.

The Principality offers an exceptional tax environment, but this framework is only fully effective if each step is carefully managed and the approach is based on solid reality.

Certain errors—often made due to ignorance or inaccurate advice—can weaken the entire system and expose taxpayers to serious risks.

ENGAGE systematically identifies, prevents, and corrects these risks to ensure a smooth, compliant, and sustainable transition.

Underestimating tax residency criteria

This is the most common mistake— and the one with the most serious consequences.

Many people think that becoming a tax resident of Andorra simply involves signing a lease, opening a bank account, or buying an apartment.

In reality, becoming a tax resident involves demonstrating a genuine, consistent, and verifiable settlement.

A genuine center of economic and personal interests must be established:

• physical presence for more than 183 days per year,
• main accommodation in Andorra,
• localized daily life (health, consumption, leisure, schooling, subscriptions),
• effective transfer of revenue centers and asset management.

An "administrative" arrangement with no tangible economic or family reality is extremely risky.

This may lead the French tax authorities to reclassify the tax domicile, resulting in heavy, retroactive adjustments that are difficult to contest.

ENGAGE assists its clients in documenting, proving, and securing each element so that their tax residence is indisputable.

"A tax residence can be proven, not declared."

Ignore the France–Andorra tax treaty

The Franco-Andorran tax treaty is an essential document that is too often misinterpreted.

Some expatriates imagine that this agreement automatically "erases" French taxation.

That's false— and dangerous.

Certain types of income remain taxable in France:

• real estate income from properties located in France,
• public retirement pensions,
• and in certain cases, dividends or capital gainsfrom French companies.

Misinterpretation of the agreement may result in double taxation or an error in the tax return that could trigger an audit.

ENGAGE analyzes each source of income item by item to coordinate bilateral taxation, secure cash flows, and eliminate risks.

Poorly structuring your professional income

Keeping a company active in France while declaring tax residence in Andorra is a common mistake.

If the French authorities consider that the effective management of the company remains in France, they may consider the company to be a French tax resident.

Consequence: all profits may be taxed in France, even if the activity is international.

ENGAGE conducts a comprehensive analysis of existing structures:

• dissolution or transfer of the company if necessary,
• creation of a suitable Andorran entity,
• redefining billing flows,
• alignment of the management seat with the actual residence of the manager.

This reorganization ensures consistency between tax residence , professional activity, and source of income.

Neglecting estate planning

This is one of the most underestimated mistakes.

Many people think first about immediate tax optimization and forget about inheritance.

However, when it comes to assets, not having a plan for what happens to them can be really costly.

Assets located in France remain subject to French civil and tax law, with inheritance tax rates of up to 45% for direct descendants.

ENGAGE implements appropriate succession mechanisms:

• family governance clauses,
• intelligent dismemberment (usufruct / bare ownership),
• controlled integration of heirs into family businesses,
• Andorran life insurance to structure the transfer,
• coordination between French and Andorran civil rights.

This preparation prevents blockages, conflicts, and erosion of assets, while ensuring a smooth transfer.

Choosing an unsuitable or "turnkey" setup

Every financial situation is unique.

Standardized setups found online, or "turnkey" expatriation solutions, are often dangerous.

A fictitious residence or inactive company may be considered an abusive arrangement, resulting in heavy penalties and consequences lasting several years.

ENGAGE takes a completely customized approach, where each structure is based on real economic justification.

Every company, every flow, every contract is audited, documented, and integrated into an overall strategy.

This is the only way to achieve legal, sustainable, and indisputable optimization.

"Optimization should never be standardized. It must be designed, proven and adapted to the customer's reality."

Failing to monitor and update regularly

Even the best structure can lose its coherence if it is not maintained over time.

• Legislation is changing.
• Tax treaties are being renegotiated.
• Family situations change.

Failing to update your strategy means running the risk of inconsistencies arising, or even failing to comply with reporting obligations.

ENGAGE provides comprehensive annual monitoring:

• document update,
• review of flows,
• tax monitoring,
• analysis of the impacts of legislative changes.

This monitoring ensures the stability, consistency, and compliance of the assets, year after year.

In summary

Becoming a tax resident in Andorra is a rare opportunity, but it requires method, caution, and expertise.

The most common errors— even those made in good faith—can be difficult, if not impossible, to correct retroactively.

ENGAGE helps you anticipate, secure, and formalize each step, so that your installation is not only advantageous, but above all solid, compliant, and sustainable.

A successful tax residence is based on three key factors: reality of life, consistency of assets, and impeccable documentation.

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7. Expert opinion – ENGAGE

Andorran tax residency is not a loophole, but a strategy of consistency.

It is not a means of avoiding tax, but a way of placing one's income, investments, and assets within a clear, stable framework that complies with international rules.

“It is not a question of evading taxes, but of managing taxation in compliance with international tax law.”

This perspective perfectly sums up ENGAGE's philosophy.

For the firm, Andorran tax residency is never an impulsive decision or an opportunistic arrangement.

It is a carefully considered decision, rooted in the client's economic reality, lifestyle, family ambitions, and wealth trajectory.

ENGAGE acts as a strategic partner, working alongside individuals, executives, investors, and expatriate entrepreneurs who wish to settle in Andorra while retaining income from French sources.

The goal is not only to optimize taxes: it is to restore meaning, consistency, and visibility to wealth management, which has often become overly complex.

Each support program is based on a rigorous and human approach, where technique serves strategy, and strategy serves life goals.

The first step is to determine tax status by analyzing tax domicile, permanent residence, and criteria for possible dual residence.

This analysis helps prevent any risk of conflict with the French tax authorities and anticipate the practical consequences of changing residence.

The second step is an in-depth study of the permanent residence, a key element in the Franco-Andorran agreement.

ENGAGE examines the family's location, habits of residence, economic and social ties, and all factors that establish a coherent and indisputable center of life.

The third step involves optimizing deductions, allowances, and taxation mechanisms, whether they fall under Andorran or French law.

This bilateral approach ensures that each type of income—salaries, dividends, capital gains, property income, pensions—is treated according to the most favorable rule, but always within a legally sound framework.

The fourth step is managing reporting obligations to the French tax authorities.

Departure declarations, accounts opened abroad, cross-border flows, tax treaties, withholding taxes, tax residence certificates:

ENGAGE prepares, verifies, and documents each element to ensure perfect compliance.

This work is never limited to technique.

It is about protecting the client, securing their international mobility, streamlining their assets, and offering them lasting peace of mind.

In summary, ENGAGE advocates a demanding vision of Andorran tax residency: a transparent, documented, proactive approach that is aligned with domestic law and international conventions.

A step:

• Where we don't try to circumvent, but to understand.
• Where we don't seek to escape, but to build.
• Where we do not seek to distance ourselves, but to align ourselves.

Because choosing Andorra isn't giving up: it's making a decision.

• Decide on a clearer life model.
• Decide on more consistent asset governance.
• Decide on a more controlled, perfectly legal, and sustainable tax system.

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8. Conclusion: anticipate, protect, pass on

Moving to Andorra for tax purposes isn't just about changing countries: it's about changing your perspective.

It means leaving uncertainty behind pour un modèle lisible.

It means transforming taxation into a management tool rather than a permanent constraint.

It means placing one's income, assets, and family in a stable, balanced environment that complies with international standards.

Throughout this guide, one thing becomes clear: Andorran tax residency is not a "tax measure," but a life project.

A project that requires method, rigor, foresight, and support.

A project that requires aligning your cash flow, structures, physical presence, home, and wealth strategy.

ENGAGE operates precisely at this intersection: where legal, tax, asset management, and human issues converge.

The firm develops tailor-made solutions that are flawless from an administrative standpoint, but above all consistent with the client's personal trajectory.

Because true success is not just about reducing taxes.

True success isfinding a setting that suits you.

A setting that sets you free.

A framework that allows you to create, share, invest, travel, and live —with complete peace of mind.

Andorra is not a refuge.

Andorra is a choice.

A choice of clarity, moderation, balance, and freedom.

And a choice that, when accompanied by rigor, can transform an entire financial life.

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9. Premium call to action ENGAGE

Are you considering moving to Andorra?

Would you like to secure your tax residence, optimize your cash flow, and structure your assets in a compliant and sustainable manner?

ENGAGE supports you with cross-disciplinary expertise—legal, tax, wealth management, and international—to transform your project into a solid, tailor-made strategy.

Discuss your project with a Franco-Andorran tax expert.

A preliminary discussion allows us to identify your challenges, your objectives, and the levers available to you.

Click here to book a strategic consultation with an ENGAGE advisor.

A confidential meeting dedicated to analyzing your situation and building your roadmap.

Contact ENGAGE for a comprehensive asset audit.

Your tax peace of mind always starts with a conversation.

ENGAGE makes it a method.

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