The Principality of Andorra is a European micro-state located in the Central Pyrenees between Spain and France, members of the European Union.
Andorra’s economic model to date has been mainly based on tourism (skiing and commerce), the financial sector and, to a lesser extent, construction and real estate in recent years.
The Andorran banking sector comprises a total of five banking groups and has more than 80 years’ experience in this activity. The banking entities in Andorra render banking services (retail and private banking), asset management, brokering and insurance services.
|Population (2013)||76 098 (0.00%)|
|EU Status||not a member|
|National Currency||EUR (Euro)|
|Nominal GDP (2013)||2.4 bln EUR (0.00%)|
|CPI, Year Average (2013)||0.0 % (2012: 1.1 %)|
|Credit Ratings (as of Sep 2016)|
|Fitch||BBB||good credit quality, outlook stable|
|S&P||BBB-||lower medium grade|
|Withholding Tax||0.0 - 10.0%|
|Exchange on Request||22 signed agreements|
|Automatic Exchange||starts in September 2018|
|Deposit Guarantee Scheme|
|Maximum Protected Amount||100 000 EUR|
|Country Ceiling for Deposits|
|Local Currency (Euro)||A3||upper medium grade|
|Foreign Currency||A3||upper medium grade|
|Banking Sector Structure|
|Number of Banks||6|
|Recent Changes (2015)||new banks: 1, closed banks: 1|
|Consolidated Assets (2014)||14 046.56 mln EUR (-11.49%)|
|Andorra Banc Agrícol Reig, SA (Andbank)||Mora Banc Grup, SA|
|Credit Andorra Group||Banc Sabadell d’Andorra, SA|
|List of Banks in Andorra|
According to Department of Statistics (Andorra), nominal GDP of Andorra in 2013 was 2.4 bln EUR.
According to Department of Statistics (Andorra), inflation rate in Andorra in 2013 expressed as annual percentages of average consumer prices was 0.0% which was below the Euro Area average (1.4%) and below the European Union average (1.5%).
Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.
Withholding tax rates applied on payments of interest and dividends in Andorra are shown in Table 1.
|Natural person, resident||0.0||0.0|
|Natural person, non-resident||10.0||10.0|
There are 3 ways for jusrisdictions to exchange information on tax matters:
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
Andorra signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Andorra and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 01 January 2013 of signing the agreement is given in brackets):
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
Andorra didn't sign the automatic information exchange agreement but made a commitment to start the automatic information exchange in September 2018.
Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
Although there is no IGA between Andorra and the United States, banking and financial entities operating in Andorra have reached the agreement with the IRS to participate in FATCA on an individual basis.
FATCA and European countries
Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.
From a depositor's point of view it is important to know:
All these details about deposit guarantee scheme in Andorra are summarised in Table 2.
|Scheme Participants||all credit institutions operating in Andorra, branches of Andorran banks abroad|
|Eligible Depositors||natural persons, legal entities|
|Covered Accounts||cash demand deposits, term deposits, deposit certicifates and other similar debt securities|
|Maximum Protected Amount||100 000 EUR|
|Paid In Currency||EUR|
Table 2. Deposit guarantee scheme in Andorra.
Deposit Guarantee Schemes in Europe
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
Local currency (Euro) deposit ceiling for Andorra is set to A3 (upper medium grade), foreign currency deposit ceiling is A3 (upper medium grade).
Currently there are 6 credit institutions operating in Andorra.
Recent structural changes (2013 - 2015) of the banking sector of Andorra are summarised in Table 3.
|Number of Opened Banks||0||0||1|
|Number of Closed Banks||0||0||1|
Table 3. Recent structural changes in the banking sector of Andorra.
The list of the most recently opened banks in Andorra is provided in Table 4.
|Vall Banc, SAU (new)||June 2015|
Table 4. The most recently opened banks in Andorra.