Andorra Residency Saving Crores in Taxes | Business | Sarthak Ahuja

The Wealthy have found a new country to register their company in so that they can avoid taxes on their investments... and it’s as beautiful as Switzerland...

But high chance you wouldn’t have heard of it’s name.

There’s a country in Europe, super tiny, sandwiched between Spain and France, a three hour drive from Barcelona - called Andorra.

The tax in this country used to be zero, but now, is around 10% on any and every income - much lower than what the developed countries charge, or even what SE Asian countries charge.

Oh, and there’s no tax up to an annual individual income of EUR 40k or close to Rs 40 lakhs.

So imagine if someone earns Rs 2 crores of passive income while sitting in India, they would pay close to Rs 70 lakhs in India while paying ~Rs 20 lakhs in Andorra.

Even the VAT here is 4.5% while in most of Europe, the lowest rate is 15%.

Now, Andorra is very niche in its appeal to specific kind of investors - a lot of crypto investors, and passive investors who are happy to earn interest on their bank deposits or other digital assets, or establish holding companies of their international operations here.

Such investors need to fulfill a few conditions:

1/ Invest EUR 550k into Andorran Assets
2/ Add EUR 50k into an Andorran Bank Account
3/ Be a tax resident of Andorra (i.e. stay in the country for 90 days in a year... and don’t be a tax resident of any other country)

Now, to be honest, I don’t see a lot of value in someone moving to Andorra to save on taxes on a passive income, unless it’s a really unique case - pretty much because by itself I don’t know what one would do in Andorra for 90 days in a year...

And to set up a holding company, UAE may be better.

And to avoid the tax residency of any other country while traveling the remaining 270ish days is not as easy as it may sound on paper.

Regardless, super fun to know... and I bet your network would have at least one person for whom this would still make sense. Someone with a lot of money, and loves living around Spain.
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A Chartered Accountant with about 10 years of experience in areas of Tax Advisory, Startup Consulting, Fundraising, Audits, Deal Advisory, Business Modelling and contract CFO services.
Winner of the ISB Young Leader Award 2017 and the Best All Rounder, PGP Class of '17, Sarthak has also been published about in the leading financial newspapers such as The Financial Express as possibly the youngest Indian to have completed the courses of CA, CS and CMA along with a graduate degree in Financial & Investment Analysis from University of Delhi, all by the age of 23 years

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