A medieval principality, secluded from the rest of the world, Andorra is still only a reasonably short drive (as distances are measured in North America) from the sparkling beaches of the French Riviera and that bustling European economic powerhouse, Barcelona. Andorra lies in a hidden valley in the picturesque Pyrenees - and is one of the few alpine paradises in the world that is also a tax haven. What makes Andorra the ultimate personal tax haven in all of Europe is a splendid combination of features.
Andorra is picturesque, unregulated and relatively inexpensive. And best of all there are no taxes. You can probably live there for much less that what it's costing you to live in your present home. A green valley in an alpine region where all the modern amenities for a comfortable life exist and where there are over 300 days of sunshine a year. Andorra is located in the North East portion of the Pyrenean mountain range, which separates France and Spain. It is a small place with over 13 million visitors a year and there is an established and growing expat community.
Andorra is not an island or a rural backwater but a country which is a full member of the United Nations. It has political stability; in fact it hardly has any government at all. Of the 60,000 people who call Andorra home, less than 100 work for the government. There is no Andorran currency, both the French and the Spanish currencies were considered legal tender - and of course the Euro. For such a small population, there is a robust economy. It's a duty free area with no consumption taxes whatsoever. The postal system is free; stamp collectors round the world buying Andorran stamps support it. Labour unions are strictly forbidden and there's little evidence of a "socialist mentality" among the natives.
The unregulated banking system is among the safest in the world. It is sound, prosperous, computerized, streamlined, discreet and very customer oriented. Some of the wealthiest people in the world prefer Andorra's low-profile banks to those of secretive Switzerland. You can obtain an account in Andorra and access world markets in total privacy - and you can receive interest rates several percent higher than you would receive in the United Kingdom and the United States.
There is very little crime, what there is could be classified as of the petty variety. Andorra has no sales tax and alcohol and tobacco products are probably the cheapest in Europe. There is free health care for everyone, including old age pensions, (note however that Non-Citizen Residents are required to have a Private Medical Plan as they are now no longer permitted to join the Andorran Government Health Plan.) Most doctors speak English.
Schools are free for everyone and the adult literacy rate is 100%. Dining out in a first class restaurant is cheap compared to most other European metropolitan areas. Andorra has 250 restaurants, some of Europe's best skiing at its five ski resorts and the largest number of Mercedes limousines per capita in the world. Its people are affluent. More than two thirds of all residents are wealthy, self-made foreigners, most of who moved to Andorra because they were fed up with government red tape and destructive bureaucracy. Here - it bears repeating - they do not pay any taxes at all. Establishing residency is a process but not excessively demanding compared with most other countries.
To sum up, the key attraction of Andorra for foreigners is its tax haven status. It is one of the premier tax havens of Europe and comparable with other tax havens worldwide. This combined with its excellent climate, winter skiing and close proximity to the French Riviera and Spanish North East coast make it an ideal base for ex-pats or for those who simply wish to visit their money from time to time.
Michael Russell Your Independent guide to Relocation