7 steps to relocate in Andorra
During these difficult times, many families are attracted by the benefits of relocating in the Principality of Andorra. In particular due to its environment, the presence of nature, its low rate of criminality, its management of the sanitary crisis and, of course, its tax advantages. However, far from being an easy and spontaneous decision, a relocation generates several obstacles: changing country, the language barrier, sometimes being far from loved ones, children’s school, the administrative paperwork and the research of a place to live, among others. Such an adventure must be planned in advance and properly arranged. That is why it is fundamental to be well advised.
Augé Legal & Fiscal presents 7 steps to be followed to efficiently relocate in Andorra.
1. Secure my economic activity
If you are a business man, it is necessary to create or invest in an Andorran company. Whether through the incorporation of a commercial company, a company of asset management or the incorporation of a Holding company, it is fundamental to secure the necessary revenue and manage your economic activity, whether located in Andorra, in your country of origin or abroad. The process to incorporate a company takes between 1 and 3 months and requires an important amount of information and documentation to be filed with the competent authorities. This process may seem long and « annoying » but it is the key to successfully relocate from an economic standpoint. With proper guidance on a legal and fiscal level, a company structure can be contemplated in an optimal manner seeking net profits.
If you have been employed by an Andorran company, it is the employer’s task to formalize your request of residency to work in Andorra, bearing in mind the quotas established by the immigration department.
2. Obtaining a residency permit for the family
In view of the Immigration department bureaucracy, one often is puzzled by the types of residence that suit each situation. There are several types of administrative residencies that correspond to a specific profile. Each one of these residence types has been the subject-matter of an article published by our group and that we recommend reading in order to determine the residency type that corresponds to one’s circumstances. If you are contemplating investing or incorporating your company in Andorra, a residence “per compte propi” (which is the entrepreneur type of residency) is the modality that corresponds to your profile. If you or a member of your family is contemplating become an employee, the “work” residency is the type that applies. On the other hand, if you wish to retire in Andorra or live without generating any profit from an economic activity, the non-lucrative residency seems to adapt best to your profile. Each one of these modalities presents conditions and different advantages that adapt best to one’s project.
Depending on the cases, under the condition that there is a family link (marriage, minor children, relation of dependance), one’s spouse and children can obtain their residency permit via the “regroupment” mechanism.
3. Choosing the scholarity of one’s children
You have decided to become an Andorran resident but you are concerned for the scholarity of your children? In Andorra, children are « Kings » and school is fundamental. In the public system, there are three different educational systems, all three provide general knowledge and formation: the Andorran school, which is modern and based on the Scandinavian education ; the French school, which is traditional and rigorous but guaranties a republican education; the Spanish school, which program is based on the educational program and formations approved by the Spanish Ministry of Education. In order to ensure a full integration in the country by foreign pupils and to form them to a new culture, classes of Catalan, Andorran history and geography are compulsorily provided in each one of the educational systems. Following the public system, the pupils will be able to go through their Higher Education either in Andorra, in France or in Spain.
If your wish is that your child goes through an international education system with classes in English, the Agora International School or the British College are also an option in Andorra.
4. Purchase/rental of one’s Home in Andorra
One of the crucial steps of your relocation/expatriation will be to find your new Home, the one that best meets your needs and requirements. There is no shortage of real estate agencies in Andorra! On the other hand, the real estate market is quite small and limited which means that there is more demand than offer and the latter leave the market very quickly. Here too, good guidance is essential. Our real estate branch Augé Real Estate can assist you in your search and, even more, you will be able to benefit from advantages depending on the operation concluded. It also takes care of the contracting of insurance, as well as the subscription to electricity and telecommunication providers.
5. Recordal at the Parish and registry at the Consulate
Once settled in Andorra, one must still inform the competent institutions of its new address. This will involve registering with the “Comú” of the Parish in which the domicile is established. This service is included in the firms work seeking the obtention of the residency permit. On the other hand, as regards the register for “expatriate” citizens, it is a personal step to be carried out with the consulate of the country of origin to inform of the change of address and to transmit it to the corresponding public administration.
6. Homologation of one’s driving license and recordal of vehicles
The homologation of one’s driving license must be done within the first year of relocation in Andorra. If this is not taken care of, the driver will have to take a driving license test in order to be able to drive in Andorra. Said homologation procedure requires to be registered with the Comú and to hand down your initial driver’s license. The Andorran administration will grant a homologated Andorran driver’s license and the original driver’s license will no longer be valid.
Regarding the registration of a vehicle, there also is a time limit of one year to do so, as of the obtention of the residence permit. In addition, if said registration of the vehicle is done within the year following the obtention of the residence card, there is an exemption regarding the payment of Andorran indirect tax (4.5%) on the estimated value of the vehicle upon importation. Only vehicles that meet the conditions imposed by the standard Euro 5 or Euro 6 can be imported into Andorra.
7. Andorran tax residence certificate
After 6 months of effective residence in the Principality of Andorra, one can apply to the competent Andorran authorities for a certificate attesting one’s tax residency in the country. This official document can constitute the proof of your Andorran tax residency vis à vis the tax authorities of your country of origin or of previous countries of residence, in order to provide evidence that you are paying your taxes in Andorra.
It goes without saying that a relocation also implies administrative procedures with the country of origin, as for example the withdrawal from the original social security system (making sure that there are Agreements between the country of origin and Andorra in order to maintain the contributions for retirement and unemployment rights), putting an end to insurance contracts, informing the tax authorities of the country of origin of the change of address, etc.
Augé Legal & Fiscal