INVEST AND LIVE IN ANDORRA
ANDORRA A PLACE TO LIVE TAX FRAMEWORK Introducción RESIDENCIES PRACTICAL APPROACH
Andorra • High Quality of Life • A Year-Round Destination • Sound Public Finances • A Complete Tourist Offer A Competitive Business Environment Dynamic Economy • • Culturally Open to International Companies A Small Country with a Large Tourist Sector • • QUI SOMMES-OUS?
A prosperous and diverse country • High quality of life • 50% of the population are foreign nationals • More than 100 different nationalities GDP per capita 2015 [$ PPPS] SYSTÈME FISCAL
High Quality of Life Low crime rate [0 crimes in 2016] • • Three choices of free public education systems First ranked country in terms of healthcare access and quality index • Oceanic climate with over 2.000 hours of sun per year • • Protected national Parks represent 36% of the territory SYSTÈME FISCAL
A competitive business environment SYSTÈME FISCAL
An economy centered on services SYSTÈME FISCAL
Public Finance Lux. SYSTÈME FISCAL
Other indicators Unemployment rate [4th Quarter of 2016] SYSTÈME FISCAL
Other indicators Number of passive residences in Andorra 2010-2016 SYSTÈME FISCAL
Direct foreign investment in Andorra • Formalized foreign investment by country of origin from 2012 to December 2016 represents 277 million €, 97 million of which were in 2016. Initial formalized foreign investment in 2015 represented 3,8% of that year ´ s GDP. • • Creation of 1.041 jobs (2012-2015). 956 new businesses or acquisitions (2012-2015). 1,6% 1,4% 1,8% 17,8% 14,2% 6% 34,9% 51,3% 22,5% 25% 23,7% Investment per sectors 2012-2016 Top investors per country 2012-2016 SYSTÈME FISCAL (Value of formalized investments) (Value of formalized investments)
Direct foreign investment in Andorra Foreign Direct Investment Real Estate Promotion 17,8% 14,2% 6% 34,9% 51,3% 22,5% 25% 23,7%
Who are we? SERVICES International investment solutions • Corporate services • Trust, Foundations, wills and other fiduciary services • Integral services for the Principality of Andorra in • collaboration with Badia Advocats OUR STRENGTHS 17,8% 14,2% Team of economists and legal professionals in the • 6% 34,9% 51,3% Principality of Andorra 22,5% Partnership with Badia Advocats • 25% Local collaborators in more than 40 jurisdictions • 23,7%
Tax Framework DIRECT TAXES • Corporation Tax (IS) • Tax on Personal Income (IRPF) • Tax on Revenue of Non Residents (IRNR) • Tax on Capital Gains • Tax on Savings INDIRECT TAXES • Property Transfer Tax (ITP) 17,8% • Indirect General Tax (IGI) 14,2% • Special Taxes (tobacco, alcohol, oil) 6% 34,9% 51,3% • Taxes on Indirect Services– Assurances • Taxes on Gambling 22,5% 25% 23,7% OTHER TAXES AND EXPENSES
Corporation Tax RESIDENCY Special Regimes Domiciliation of the Company in Andorra • • International Trading Effective Management Control in Andorra • Intellectual Property • RANGE • Intragroup Management • Worldwide Income GENERAL RATE General Rate of 10% • • Possible Deductions 17,8% Excluded Regime 14,2% 6% 34,9% 51,3% Holding (for dividends received from DEDUCTIONS INT. DOUBLE TAXATION the subsidiary and capital gains in 22,5% If the subsidiary is taxed at a higher 25% • subsidiary sales. rate than 10% 23,7% Application of DTT •
Tax on Personal Income RESIDENCY • Domiciliation in Andorra • Center of economical interests in Andorra RANGE Worldwide Income tax for the individuals having their fiscal residency in Andorra: • Income from work • Income from Economic Activities • Income from du transferable and real estate capital • Capital gains and losses 17,8% 14,2% PRINCIPAL ASPECTS 6% 51,3% • General rate of 10% 22,5% • Tax reductions: 25% � Personal minimum: 24.000€ - 40.000€ (jointly without means) 23,7% � Family charges: 750€ per descendant or ascendant � Investment in principal accommodation: Maximum of 1.000€ par an � On general basis of Savings: 3.000€
Indirect General Tax PRINCIPAL ASPECTS Tax equivalent of International VAT • • General rate of 4,5% Reduced rate of 1% • • Super reduced rate of 0% • Increased rate for banking services of 9,5% 17,8% 14,2% Some operations are exempt from the Tax, as importations or • 6% exportation of services 51,3% 22,5% 25% 23,7%
Residencies RESIDENCY AND WORK NON-WORKING RESIDENCY PERMIT PERMANENT NON-WORKING RESIDENCY PERMIT This type of permit allows living and Individuals residing in the country without economic working in Andorra. activity TEMPORARY RESIDENCY FOR PROFESSIONALS WITH AN Permit to work and reside temporarily in INTERNATIONAL PRESENCE the Principality during the period of Persons residing in the country and having a professional validity of the authorization activity that they exercise at least 85% outside of Andorra BORDER RESIDENCY FOR REASONS OF SCIENTIFIC, CULTURAL OR Authorization to work in the country SPORTS INTEREST without residency Persons residing in the country and having a recognized international talent in the world of sport, culture and science RESIDENCES
Practical Approach ACCESS TO THE ANDORRAN MARKET • Foreign Investment Law in 2012 • Shareholding of 100% of the capital Government Approval • Creation of company or investment in • existing company REQUIREMENTS • Substance in Andorra • Bank account opening • Residency OBLIGATIONS • Accountancy RESIDENCES • Tax Declarations
Practical Approach CREATION OF AN ACTIVITY IN ANDORRA • New activity • Complementary activity ACTIVE RESIDENCY Holding • Residency permit • Active residency on own account Holding (for dividends received from • Consideration equivalent to an Andorran National the subsidiary and capital gains on subsidiary sales) • Exclusive object TAX RATES • Foreign Wealth • 10% on general regime Tax Optimization • • 0% IRPF on dividends RESIDENCES
Practical Approach ANDORRAN COMPANIES TRUST / FOUNDATION WILL BENEFICARIES INDIVIDUAL TRUST / FOUNDATIONS ANDORRAN COMPANY UNDERLYING COMPANY FOREIGN COMPANY RESIDENCES
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