INVEST AND LIVE IN ANDORRA

ANDORRA A PLACE TO LIVE

IntroducciónTAX FRAMEWORK

RESIDENCIES

PRACTICAL APPROACH

QUI SOMMES-OUS?

Andorra

• High Quality of Life

• Sound Public Finances

• A Competitive Business Environment

• Culturally Open to International Companies

• A Year-Round Destination

• A Complete Tourist Offer

• Dynamic Economy

• A Small Country with a Large Tourist Sector

SYSTÈME FISCAL

GDP per capita 2015 [$ PPPS]

A prosperous and diverse country

• 50% of the population are foreign nationals• High quality of life

• More than 100 different nationalities

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).

51,3%

25%

17,8%

6%

Top investors per country 2012-2016(Value of formalized investments)

34,9%

23,7%

22,5%

14,2%

1,4%1,8%

1,6%

Investment per sectors 2012-2016(Value of formalized investments)

Direct foreign investment in Andorra

51,3%

25%

17,8%

6% 34,9%

23,7%

22,5%

14,2%

Foreign Direct Investment

Real Estate Promotion

Who are we?

51,3%

25%

17,8%

6% 34,9%

23,7%

22,5%

14,2%

• International investment solutions

• Corporate services

• Trust, Foundations, wills and other fiduciary services

• Integral services for the Principality of Andorra in

collaboration with Badia Advocats

SERVICES

• Team of economists and legal professionals in the

Principality of Andorra

• Partnership with Badia Advocats

• Local collaborators in more than 40 jurisdictions

OUR STRENGTHS

Tax Framework

51,3%

25%

17,8%

6% 34,9%

23,7%

22,5%

14,2%

• Corporation Tax (IS)

• Tax on Personal Income (IRPF)

• Tax on Revenue of Non Residents (IRNR)

• Tax on Capital Gains

• Tax on Savings

DIRECT TAXES

• Property Transfer Tax (ITP)

• Indirect General Tax (IGI)

• Special Taxes (tobacco, alcohol, oil)

• Taxes on Indirect Services– Assurances

• Taxes on Gambling

INDIRECT TAXES

OTHER TAXES AND EXPENSES

Corporation Tax

51,3%

25%

17,8%

6% 34,9%

23,7%

22,5%

14,2% Excluded Regime

Holding (for dividends received from

the subsidiary and capital gains in

subsidiary sales.

Special Regimes

• International Trading

• Intellectual Property

• Intragroup Management

• If the subsidiary is taxed at a higher rate than 10%

• Application of DTT

RESIDENCY

• Domiciliation of the Company in Andorra

• Effective Management Control in Andorra

• Worldwide Income

RANGE

GENERAL RATE

• General Rate of 10%

• Possible Deductions

DEDUCTIONS INT. DOUBLE TAXATION

Tax on Personal Income

51,3%

25%

17,8%

6%

23,7%

22,5%

14,2%

RESIDENCY

• Domiciliation in Andorra• Center of economical interests in Andorra

RANGE

Worldwide Income tax for the individuals having their fiscal residency in Andorra:

PRINCIPAL ASPECTS

• Income from work

• Income from Economic Activities

• Income from du transferable and real estate capital

• Capital gains and losses

• General rate of 10%

• Tax reductions:

�Personal minimum: 24.000€ - 40.000€ (jointly without means)

�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

51,3%

25%

17,8%

6%

23,7%

22,5%

14,2%

• 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%

• Some operations are exempt from the Tax, as importations or

exportation of services

PRINCIPAL ASPECTS

RESIDENCES

RESIDENCY AND WORK NON-WORKING RESIDENCY PERMIT

PERMANENT

This type of permit allows living and

working in Andorra.

NON-WORKING RESIDENCY PERMIT

Individuals residing in the country without economic

activity

TEMPORARY

Permit to work and reside temporarily in

the Principality during the period of

validity of the authorization

RESIDENCY FOR PROFESSIONALS WITH AN

INTERNATIONAL PRESENCE

Persons residing in the country and having a professional

activity that they exercise at least 85% outside of

Andorra

BORDER

Authorization to work in the country

without residency

RESIDENCY FOR REASONS OF SCIENTIFIC, CULTURAL OR

SPORTS INTEREST

Persons residing in the country and having a recognized

international talent in the world of sport, culture and

science

Residencies

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

OBLIGATIONS

• Substance in Andorra

• Bank account opening

• Residency

• Accountancy

• Tax Declarations

RESIDENCES

Practical Approach

CREATION OF AN ACTIVITY IN ANDORRA

• New activity

• Complementary activity

ACTIVE RESIDENCY

TAX RATES

• Residency permit

• Active residency on own account

• Consideration equivalent to an Andorran National

• 10% on general regime

• 0% IRPF on dividends

Holding

Holding (for dividends received from

the subsidiary and capital gains on

subsidiary sales)

• Exclusive object

• Foreign Wealth

• Tax Optimization

RESIDENCES

Practical Approach

ANDORRAN COMPANIES TRUST / FOUNDATION

WILL

INDIVIDUAL

ANDORRAN COMPANY

FOREIGN COMPANY

BENEFICARIES

TRUST / FOUNDATIONS

UNDERLYING COMPANY