Andorra residence + company

[freegeek]

Looking for some insights. I read all the requirements and this could possible be a good fit for me. Looking to move out of my high tax country in 2022 - 2023 timeframe. I've been running a 1 person IT consultancy firm for 10+ years (150k euro turnover with low costs). Plan is to close down my company, move my tax residency and start a new company. My mind was first set on a Romanian micro company but Andorra would probably be a better fit when it comes to lifestyle (even when taxes and living costs are higher. I plan to visit both Romania and Andorra before I decide. I read some stuff that is not clear to me:

• Maintain a salary sufficiently high to cover your living expenses

Can't you just use dividends to cover your living expenses? You have to pay a salary to yourself?

• Pay social security contributions of a minimum of 450 EUR per month

Are these paid by the company as a deductable expense or you need to pay this as private person?

Also looking for a reliable service company to guide me through the proces and a rough estimate what they charge for their services

 

[Pepe]

Andorra is definitely a great option. They is active and passive residency. In your case, it should be Active, min 6 months to get tax certificate. Dividends are not taxed but income (personal and corporate) yes at 10%. I used local company called IDEAND. Very professional. Fully set up in 3.5 months.

 

[freegeek]

Andorra is definitely a great option. They is active and passive residency. In your case, it should be Active, min 6 months to get tax certificate. Dividends are not taxed but income (personal and corporate) yes at 10%. I used local company called IDEAND. Very professional. Fully set up in 3.5 months.

Hi, was not expecting any kind of reply anymore so thanks! Regarding my original questions, can you give feedback?

• Maintain a salary sufficiently high to cover your living expenses

Can't you just use dividends to cover your living expenses? You have to pay a salary to yourself?

• Pay social security contributions of a minimum of 450 EUR per month

Are these paid by the company as a deductable expense or you need to pay this as private person?

 

[Pepe]

You have to have a salary. Amount up to you. You can use dividends indeed but it doesn't really matter, corporate income is taxed same way as personal tax at 10%. If you pay yourself salary it will be a deductible cost of the company.
Social security has to be paid from the company. First year you get 50% discount. This covers all medical costs although you have a 25% deductible that you can get coverage for with an additional private insurance thats costs around 50€ a month.

 

[freegeek]

You have to have a salary. Amount up to you. You can use dividends indeed but it doesn't really matter, corporate income is taxed same way as personal tax at 10%. If you pay yourself salary it will be a deductible cost of the company.
Social security has to be paid from the company. First year you get 50% discount. This covers all medical costs although you have a 25% deductible that you can get coverage for with an additional private insurance thats costs around 50€ a month.

ok clear thx. Last question for now, what was the ballpark figure you paid IDEAND to set everything up?

 

[uplana]

ok clear thx. Last question for now, what was the ballpark figure you paid IDEAND to set everything up?

This is an interesting question.

 

[Pepe]

ok clear thx. Last question for now, what was the ballpark figure you paid IDEAND to set everything up?

Apparently it depends on the nationality and type of residence. You should ask for a quote yourself but personally I thought it was a no brainer.

 

[freegeek]

Apparently it depends on the nationality and type of residence. You should ask for a quote yourself but personally I thought it was a no brainer.

Do you know if ETF based on stock are excempt form capital gains tax? I read that there is no capital gains tax if you own less then 25% of a company and I wonder if this applies to ETF also, can not find an answer for that.

 

[Indealex1]

You can use dividends indeed but it doesn't really matter, corporate income is taxed same way as personal tax at 10%. If you pay yourself salary it will be a deductible cost of the company.

Thank you for this info, valuable for me as well. So if one runs a one-man company, he gets his salary as director and then pays 10% PIT while the profits are distributed to himself as dividends after 10% corporate tax on EBIT; but these dividends are not taxed with PIT. Is this correct?

 

[ilpablo]

Thank you for this info, valuable for me as well. So if one runs a one-man company, he gets his salary as director and then pays 10% PIT while the profits are distributed to himself as dividends after 10% corporate tax on EBIT; but these dividends are not taxed with PIT. Is this correct?

This is an interesting option. Can someone clarify these points? I'm also interested. So the major fixed costs of the Andorra setup is the cost of living and 450€ a month of social security? Then you just pay 10% in total for the company profit and your personal income, or is 10% + 10%?

 

[chaltron]

If you have an Andorran company you're only liable to corporate income tax, however dividends from local companies are exempt from taxation when distributed to a local resident. So in the end you only will pay 10% of CIT.

 

[FlipnShip]

Looking for some insights. I read all the requirements and this could possible be a good fit for me. Looking to move out of my high tax country in 2022 - 2023 timeframe. I've been running a 1 person IT consultancy firm for 10+ years (150k euro turnover with low costs). Plan is to close down my company, move my tax residency and start a new company. My mind was first set on a Romanian micro company but Andorra would probably be a better fit when it comes to lifestyle (even when taxes and living costs are higher. I plan to visit both Romania and Andorra before I decide. I read some stuff that is not clear to me:

• Maintain a salary sufficiently high to cover your living expenses

Can't you just use dividends to cover your living expenses? You have to pay a salary to yourself?

• Pay social security contributions of a minimum of 450 EUR per month

Are these paid by the company as a deductable expense or you need to pay this as private person?

Also looking for a reliable service company to guide me through the proces and a rough estimate what they charge for their services

Hello freegeek,

Did you end up checking out Andorra? I am also considering it as a option at the moment.

 

[uplana]

Hello freegeek,

Did you end up checking out Andorra? I am also considering it as a option at the moment.

I would really like to know the same, also details about who you have been using to help you and how you did it would be nice details.

 

[AMD]

If you have an Andorran company you're only liable to corporate income tax, however dividends from local companies are exempt from taxation when distributed to a local resident. So in the end you only will pay 10% of CIT.

you are sure this apply for 2022 - I read different, it has changed!

 

[FlipnShip]

you are sure this apply for 2022 - I read different, it has changed!

Would you be so kind sharing the supposed changes?