Tax Haven Andorra Opens Up for 2012

Andorra has been a sought after tax haven since the early eighties, and welcomed those who were selling their businesses or retiring and wanted to take what is termed 'passive' residency.

Getting passive residency in Andorra is a relatively straightforward affair for those who want it - a police certificate of good conduct from the country they live in and buying Andorra real estate are the two main qualifications for residency.

Also needed is health insurance, if the applicant already has an international health policy often this will suffice, and a bank account with one of the banks in Andorra.

For those looking for active residency up to now they would need to produce an employment contract from an Andorra company, as well as provide evidence of a rental contract or title deed for a property, along with a health insurance policy.

But for those in business who want to continue, but from a low tax jurisdiction instead of their home country, Andorra is opening up in 2012 - and will be open for business with less red tape and no need to have an Andorra partner to be able to do so.

Already a number of day traders - who can operate anywhere in the world where there is fast internet access - have expressed interest in moving to Andorra. Their gains would be tax free if the stocks, bonds and shares they bought were from outside of Andorra.

The leading bank in Andorra should be offering trading platforms for clients next year for those who want it, but the alternative is for new residents to carry on with the current trading platform they use if they are comfortable with it.

To set up a company and have it registered with all fees, along with a business account with one of the banks costs between 5,000 and 6,000 Euros depending upon the company formation complexity or lack of it. Broadband is good in Andorra, with internet speeds beating the UK's for example in several international surveys.

Other companies who have low number of staff and operate on the internet also exploring the possibility of moving and taking Andorra residency. With modern communications there's nothing to stop an increasing number of entrepreneurs moving to low tax jurisdictions, which ultimately leaves them more money to invest in their businesses - or keep for themselves.

For those who choose Andorra, office space can be rented in the capital la Vella or towns like La Massana, while for those who operate businesses by themselves can buy an apartment or house that includes a home office, and sometimes with a house an annexe which is useful if there are likely to be business people visiting.

One example of an Andorra property for sale that could be good for businessmen and women who just need a home office is a three bedroom two bathroom apartment which has 130m2 plus a terrace in the popular town of La Massana. Located close to the shops, banks, restaurants and other amenities it comes with a garage and is in a quiet area, conducive to work.

With government taxes on the rise, and businesses expected to bear the brunt of the increased taxes, it could make sense for many in the business community to evaluate whether a move to Andorra might make financial sense.