During a phase of economic opening to promote foreign investment and facilitate the internationalization of its economy, over the last 10 years the Principality of Andorra has experienced substantial changes in its financial and fiscal issues, from the inclusion of direct taxes to the signing of agreements to prevent double taxation.
In this sense, the first step consisted of creating a conforming tax system, and in 2011 the corporation tax law came into effect with a general rate of 10%, creating very attractive special regimes such as international trade taxable at the reduced rate of 2% and tax exemptions for the share holding of foreign corporations.
fiscal information exchange
At the same time, fiscal information exchange agreements were signed with Spain and France among other countries, which enabled the Principality of Andorra to be removed from the list of tax havens and earn the reputation and image of an attractive place for financial investment.
Another key element was the promotion of the economic opening of the Principality by means of the approval of the foreign investment law, which enables unlimited capital investment for foreign citizens. This new law promotes the attraction of capital and makes Andorra's economy solid, competitive and diversified. This can be seen in the opportunities for foreign investors to access the Principality, which present very favorable social and financial advantages for residing and carrying out international activities in Andorra.
The personal income tax law which came into effect in 2015 provides a general rate of 10% and attractive deductions, thus complementing Andorra's fiscal framework and making it a competitive system in relation to tax.
To this we can add the signing of agreements preventing double taxation with other countries, like those already including France, Spain and Luxembourg, which enables the Principality of Andorra to position itself as a very competitive jurisdiction for residence and investment, and providing opportunities for fiscal and asset planning.