13 reasons to invest in Andorra
11/09/2020
1. Stable political framework and economy
The Principality of Andorra is characterized by strong socioeconomic dynamism and by the stability of the political and institutional system. Thus, it is an ideal place to invest, since its economic activity is mainly oriented towards services: tourism and commerce. A third strategic sector for the Principality is the financial sector, due to its important contribution to Andorran GDP (the financial and insurance sector represents approximately 20%), its core being the banking system.
2. A market with more than 8 million visitors
The main source of economic resources for the country is tourism. Thanks to the mountainous relief of the country, Andorra has a wide tourist offer specialized in skiing and other winter sports and activities. The many hiking trails offered by the Principality (Madriu-Perafita-Claror Valley, Sorteny Valley Natural Park, Comapedrosa Natural Park…) mean that the country also receives a large influx of visitors during the summer. Other compelling reasons to visit the Principality are shopping or thermoludism, the latter mainly due to Caldea, one of the largest thermoludic centers in Europe. During 2018, 8.33 million people visited Andorra.
3. Negotiations with the EU to access the European internal market with more than 500 million consumers
Currently, Andorra and the European Union are in negotiations for greater participation in the EU internal market. This process of international harmonization is leading the Principality towards a new socioeconomic cycle in which foreign investment and the internationalization of the country’s companies will constitute new pillars for a modern and constantly developing economy.
4. Agreements to avoid double taxation (CDI) with various countries
The Principality of Andorra has signed, in recent years, eight agreements –with France, Luxembourg, Spain, the United Arab Emirates, Portugal, Liechtenstein, Malta and Cyprus– to avoid double taxation and prevent tax evasion with regard to income taxes, in accordance with the model agreement established by the OECD. To this day, negotiations continue with different countries to expand this network of agreements.
5. One of the most competitive tax frameworks in Europe
Andorra is a very good option to invest because it has one of the most competitive tax frameworks in all of Europe. Thus, the Andorran VAT (IGI) stands at only 4.5%, while other direct taxes are at a maximum of 10%, such as corporate tax, personal income tax, income tax for non-residents prosecutors, etc.
6. Solid public financial system that guarantees stability
The main source of income for the Andorran State is indirect taxes (66.7%), although income from direct taxes has grown significantly in recent years (up to 19.5% in 2018) as a result of the new figures taxes that began to be applied in 2012. In relation to expenses, the Administration allocates around 90% of non-financial resources to current expenses (personnel, consumption of goods and services, transfers, etc.).
7. One of the healthiest countries
Andorra is the fourth healthiest country in the world, according to the latest report by the prestigious medical journal The Lancet, surpassed only by Iceland, Singapore and Sweden. This report analyzes concepts such as the crime rate, air quality, the proliferation of diseases, water quality or the rate of overweight of its population.
8. Last generation Internet connection
Andorra is the first country with total fiber optic coverage, with 100% of homes connected at 300 Mbps and 94.5% of homes with Internet access (the 7th country in Europe in proportion). On the other hand, 75% of minors between the ages of 10 and 15 have a mobile phone, 40.4% of the population has carried out some electronic procedure with the administration and 53% of the population has made an online purchase. The Principality is also the 3rd country in Europe where the most people, in percentage, connect to the Internet daily (95.8%).
9. A truly alive laboratory for companies and researchers
Public-private entities support the Andorran business sector and also promote economic openness to foreign companies to facilitate investment and economic diversification in Andorra, in addition to promoting the development of innovation and big data projects between the different sectors.
10. Access to an excellent and quality education
The level of schooling in the Principality is 100% of children and adolescents from 4 to 16 years old, and education is free until high school. In addition, there are three free educational systems in Andorra: the Andorran, which depends entirely on the Government of Andorra; the Spanish, secular and congregational, dependent on the Spanish Administration; and the French, directly dependent on the French State. These systems coexist with others of international prestige, such as the British one.
11. Safe country with one of the lowest crime rates in the world
Thanks to its location in the Pyrenees, Andorra has a very high police and customs control, thus guaranteeing the tranquility of its citizens and visitors. The police force is so effective that the Principality’s security index is around 90%. Living in Andorra translates to a low pickpocket risk, a low risk of sexual abuse, a low risk of mugging and kidnapping, high nighttime security, a low risk of scams, and a low risk of terrorism.
12. Open and cosmopolitan society that brings together more than 100 nationalities
The average age of the Andorran population is 41 years old, below the European average. This is explained by the birth, fertility and mortality rates well below European levels, with a low youth population (up to 14 years old) and a low elderly population (over 65 years old). On the other hand, Andorra has more than 100 nationalities, although the majority of the population is Andorran (48.8%), Spanish (25.1%), Portuguese (12%) or French (4.4%).
13. One of the lowest electricity rates in Europe
Andorra has one of the lowest home electricity rates in Europe, according to the most recent Eurostat data. Specifically, in the Principality 0.133 kW/h is paid, when the European average is 0.206 euros per kW/h. In Spain it costs 0.219 euros and in France 0.169 euros per kW/h. With a lower price are only Romania, Lithuania, Estonia, Bulgaria and Malta.
