Living in Andorra
Three Reasons to Live in the Principality
Despite having an area of just 468 square kilometers and a population of just over 71,000 inhabitants, Andorra has traditionally positioned itself as a multicultural and open country where more than 100 different nationalities coexist in complete integration. This fact, along with its excellent location in the heart of the Pyrenees between Spain and France, has made Andorra a highly attractive country to reside in, whether permanently by purchasing a house or apartment, or temporarily by renting a property.
Living in a Favorable Tax Environment
Low taxation is one of the main distinguishing features that inherently comes with residency in Andorra. Thus, whether for individuals or companies, residents of Andorra benefit from very advantageous direct and indirect taxation (general IGI of 4.5%) compared to neighboring countries. This level of taxation allows, among other advantages, companies to be taxed at a nominal rate of 10% on business profits, with deductions on certain activities that can reduce the tax rate to as low as 2%.
Regarding income tax (IRPF), which came into effect in Andorra on January 1, 2015, it also imposes a 10% levy on salaries and savings income. However, the first €24,000 of labor income and the first €3,000 of capital income are exempt from taxation. Additionally, in terms of incentives, there are deductions for job creation, as well as an exemption, provided certain requirements are met, from the indirect tax on property transfers (ITP).
Residency in Andorra: A Synonym for Living in a Natural Environment
Another reason to reside in Andorra lies in the country’s location. The valleys of Andorra, nestled in the heart of the Pyrenees, make the Principality a territory with an unparalleled natural environment, which can be enjoyed thanks to the numerous activities offered by all the parishes in the country, almost year-round.
With over 2,000 hours of sunshine per year, one of the major attractions for living in Andorra during the summer is the wide array of hiking trails and routes that allow you to discover, among other sights, iconic locations in the Principality such as the Tristaina Lakes, the Vall d’Incles, Lake Engolasters, and the Madriu-Perafita-Claror Valley. Furthermore, it goes without saying that with the first snowfall, the Andorran landscape transforms completely, offering up to 300 kilometers of skiable terrain across the country’s two ski resorts: Grandvalira, Pal Arinsal (formerly Vallnord), and Ordino-Arcalís.
Living in Andorra with a Higher Quality of Life
With a GDP per capita exceeding €46,400 per year— a figure significantly higher than Spain’s €29,800 and France’s €42,500—and a minimum wage set at €991, Andorra boasts a quality of life that surpasses many neighboring countries. This is complemented by public safety and a low crime rate, as well as a unique, high-quality, and free education system that encompasses three teaching systems: Andorran, Spanish, and French.
The quality of life is further enhanced by a quality healthcare system and various complementary services (retirement homes, home care, socio-health centers, etc.) aimed at the elderly population. Undoubtedly, this is another factor that can influence the decision to reside in Andorra.