Andorra or Dubai: which base suits your international project?

Dubai and Andorra both attract international entrepreneurs, but they suit very different types of projects.

Dubai offers privileged access to the Middle East, Asia and Africa. Andorra is more integrated into the European economic environment and often suits people wanting to stay close to France and Spain.

A tax comparison needs to distinguish between personal taxation, corporate tax, the free zone regime, and the real cost of local substance. To compare personal and corporate taxation in Andorra, our dedicated guide covers the whole system.

The United Arab Emirates doesn't apply a general federal tax on personal income. VAT is set at 5%.

Corporate tax is 0% up to AED 375,000 of taxable profit and 9% above that. To compare presence and investment conditions, see our passive residency guide.

A company set up in a free zone doesn't automatically benefit from a full exemption.

The 0% rate is reserved for the Qualifying Income of a Qualifying Free Zone Person meeting the regulatory conditions. Compliance with substance requirements, documentation, transfer pricing, and the nature of the income is decisive.

Non-qualifying income and certain profits attributable to an establishment located outside the zone can be taxed at 9%.

It's therefore worth avoiding claims like "a Dubai company = zero tax".

An Emirati visa alone doesn't prove that someone has stopped being a tax resident of another country.

Obtaining a tax residency certificate depends on domestic rules and, where the certificate is intended for applying a treaty, on treaty criteria. Presence of 183 days is an important factor, but other conditions may come into play depending on the situation.

Someone whose home, family, main activity, and economic interests remain in France or Spain could still be considered a resident of that country despite holding an Emirati visa.

Which base makes the most sense?

Dubai can be particularly relevant for:

• trade with the Middle East or Asia;
• international logistics;
• activities requiring a major international airport;
• certain technology businesses;
• directors with a non-European client base;
• projects needing the ecosystem of a major metropolis.

Andorra may suit people who:

• want to live close to France and Spain;
• mainly work with Europe;
• are looking for a smaller-scale, mountain environment;
• want to personally manage a local structure;
• don't need the infrastructure of an international metropolis.

The tax rate is only part of the budget.

In Dubai, you need to factor in:

• the licence;
• the choice between mainland and free zone;
• an office or flexi-desk;
• visas;
• health insurance;
• banking fees;
• annual renewals;
• accounting and corporate tax;
• accommodation and presence costs.

In Andorra, the budget typically includes the company, registered office, authorisations, any residency permit, accounting, social security contributions, and accommodation.

The right choice therefore rests on overall cost, not a tax slogan.

A tax treaty is in force between the United Arab Emirates and Andorra. It can be relevant for certain cross-border income and for determining treaty residency.

Its application nonetheless requires the person to be able to demonstrate their tax residency in the relevant state.

ProGestió looks at where your clients are based, your current residency, your travel needs, and your organisation before recommending a base. Would you like a personalised comparison?

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