It is important to know and take into account all the existing banks in the country where you have an interest in invest, setting up a company o go to so that Andorra whether their residence is passive or non-profit.
It is important to open a bank account in Andorra to carry out any type of activity in the country. If you want to pay the usual expenses as a resident, to run a business and transfer capital, or to make the investment required to obtain passive or non-profit residence.
Andorra is a safe and solvent country thanks to its banking system. The financial sector symbolises the 20% of the GDP of the country.
In the following, we will explain in simplified form the functioning of Andorran banksThe bank accounts and the payments that can be made in the Principality of Andorra.
1. Andorran banks:
Five banking groups operate in the country:
ANDBANK:
It is a merger that took place in 2001 of two Andorran banks (Banc Agrícol and Banca Reig). It specialises in private banking services. It has been present in Spain since 2011 and is an entity with more than 85 years of experience in the management of large assets (they have around 22 billion euros under management internationally).
BANK SABADELL D'ANDORRA:
It was formed as an alliance with the Spanish bank Sabadell and a consortium of Andorran entrepreneurs in 2000. It offers retail and corporate banking, private banking and brokerage services. It is considered the smallest bank in Andorra, half owned by Banco Sabadell.
MORABANK:
Formed by several corporations and they develop various activities from wealth management to insurance services. They operate internationally (e.g. in Switzerland). Their CET1 solvency ratio in 2020 was 25.5%.
CRÈDIT ANDORRÀ:
It is the largest in Andorra and operates a universal banking model. It specialises in commercial and private banking, insurance, financial advice and asset and wealth management. It was founded more than 70 years ago.
VALLBANC:
Specialised in private banking. Formerly BPA (Banca Privada de Andorra). In 2016 it was acquired by the US company JC Flowers & Co, since then it has changed its image, focusing on transparency and clarity for its clients.
All Andorran banks currently carry out an automatic exchange of information and CRS data (tax information between member countries). This means that Andorra is a solvent financial centre and meets all international requirements. Financial management is conservative and prudent, offering higher ratios than 20% and greater stability.
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2. Andorran Banking and the AFA (Andorran Financial Authority)
Andorran Banking is the Association of Andorran Banking Institutions and represents their interests. Its mission is to safeguard the prestige, competitiveness and development of banks both in Andorra and internationally. It is also a member of the CCIS (Andorran Chamber of Commerce, Industry and Services), the CEA (Andorran Business Confederation) and the EBF (European Banking Federation).
The AFA (Andorran Financial Authority) is the institution in charge of supervising the Andorran financial system, both banks and insurance companies. Its purpose is to ensure the smooth functioning, transparency, competitiveness and reputation of the system, to reduce systemic risk and to act accordingly.
Another important function is to manage "deposits and bonds" for non-profit resident persons and individuals applying for residence and self-employment immigration authorisation.
4. Other Taxes and Fees in Andorra:
3. Andorra and SEPA
SEPA (Single Euro Payments Area) is the area in which citizens and businesses can make payments and receipts in euro within and across national borders on equal terms, with the same rights and obligations.
SEPA has three instruments for national and international payments in any country that is in the SEPA area:
- SEPA credit transfers (for payroll, bulk and one-off payments).
- SEPA direct debits (one-off or recurring direct debits).
- SEPA instant credit transfers.
The SEPA payment area currently comprises 36 countries.:
- Andorra, San Marino, Monaco and Vatican City.
- 4 members of the European Free Trade Association (Iceland, Switzerland, Liechtenstein and Norway).
- 28 states of the European Union.
Andorra joins SEPA in March 2019This means that any individual or company can receive and send payments from an Andorran bank to any other account (one of these 36 countries).
Although Andorran banks are very solvent, in reality they are less competitive for international transfers due to their high commissions, nor do all payment gateways such as PayPal, among others, work.
Still, most international transfers go smoothly. Some may be slower or have higher fees, a solution may be to open a foreign bank account.
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4. Foreign accounts of Andorran companies or individuals
As mentioned above, the fees for international transfers from an Andorran bank are quite high compared to, for example, a bank in France or Spain. One option would be to open a Spanish bank account with a fiscal representative with a Spanish identification number.
For example, between the Sabadell d'Andorra bank and the Sabadell bank in Spain, there are no commissions for transfers between their accounts. Cash can also be withdrawn from ATMs without commissions.
5. Open a bank account
Any company or individual can open a bank account, whether resident in Andorra or not. But you must comply with anti-money laundering and anti-money laundering legislation. It is important to comply with FATCA protocol and to indicate the origin of incoming funds.
6. Is there money laundering in Andorra?
As is well known, in 2016 Andorra signed an agreement with the European Union for the automatic exchange of tax information and in 2017 any banking secrecy was definitively abolished.
Since the summer of 2018, it has been a serious tax offence for a bank not to provide all tax and financial information requested.
So Andorra is definitely not a tax haven. All income and assets must be supported by official documentation.
7. Advantages of having a bank account in Andorra
Knowing that the fees for international transfers are higher than in other EU countries, you may wonder why it makes sense for a non-resident company or individual to have a bank account in Andorra... Here are some of the advantages:
- Saving: thanks to excellent tax planning, lowering the tax burden on savings or income, will allow you to save unlike a Spanish account, for example.
- Security: As mentioned above, Andorran banking is considered one of the safest in Europe.
- Possibility to open a bank account ONLINE in Andorra (remotely): you can open the bank account online from wherever you are. It is important to present all the documentation and KYC (they verify your identity according to the legal requirements, rules and regulations in force), Andorran banks are very demanding and it is best to prepare everything in advance.
- Access to bank assets: possibility to buy assets, real estate, etc.
8. Documentation for opening a bank account in Andorra:
The documentation requested by Andorran banks may vary on a case-by-case basis as it may vary depending on the holder, his/her residence, the amounts of future transactions, his/her assets, among other aspects.
The minimum and compulsory documentation:
- DNI, ID and/or Passport: it is important that it is valid. They may also ask for a receipt in your name.
- Bank or tax statement: they ask for a bank statement and the tax declaration of the place of residence.
- Documentation proving the origin of the money: in order to avoid money laundering, it must be shown that the money is not laundered.
Likewise, before starting the process, it is essential to have a good knowledge of all the related issues. Only Andorra works with tax professionals, economists, real estate agents and lawyers with extensive experience in the sector.
We are at your complete disposal to help you, guide you and advise you whether it is to become a resident, to acquire a property or to set up a company in Andorra.
Please contact us with any questions you may have.
